NSW Retirement Villages – Government commits to reform

30 July 2018

In June 2018 the NSW Government responded to the Inquiry into the NSW Retirement Village Sector by Kathryn Greiner (Greiner Report) by supporting the recommendations for reform in the Report.

The following key areas for improvement of the retirement village sector were raised in the Greiner Report:

  • Increased transparency of exit fees and contracts;
  • Greater clarity to residents on the ongoing maintenance costs shared with the operator; and
  • Improved support for residents when disputes arise with the operators.

More specifically, the Greiner Report had 17 recommendations to change the NSW retirement village sector. The recommendations included the following:

  • Changes to the Retirement Villages Act 1999 (NSW) to strengthen consumer protections and transparency around marketing practices;
  • Improve upfront disclosure requirements to make it simpler to understand critical terms;
  • Introducing a plain English legally binding  ‘Exit Fees and Charges Statement’ that sets out the costs payable by a resident on exiting a village, how they are calculated and an explanation of the resident’s rights under the legislation;
  • A regular contract “check up” for residents with family members present;
  • Require the operator to buy back the unit after a maximum timeframe from a resident leaving the village;
  • Simplify the  funding arrangements for maintenance of a retirement village;
  • Preparation of an asset register for each retirement village to increase transparency around maintenance;
  • Introduce a mandatory dispute resolution procedure before disputes reach NCAT, such as independent mediation with a mediator familiar with retirement villages;
  • Require operators to share information regarding dispute resolutions in the village including reporting to Fair Trading;
  • Improve the level of awareness of safety and security measures including regular fire drills;
  • Consider opportunities to advocate for age appropriateness in village design;
  • Increase Fair Trading’s oversight of retirement villages by targeted compliance activities;
  • Increase the sector data collated by Fair Trading including reports from village operators on key village information;
  • Overhaul and enhance the public register of retirement villages so that the information is publicly accessible;
  • Increase the awareness to prospective residents through improved accessibility to Fair Trading website, requiring operators to make a Retirement Villages Living Guide (published by Fair Trading)  available to residents, and community information sessions;
  • Require retirement villages managers to undertake appropriate training; and
  • Consider implementing a Code of Conduct and a reporting scheme for breaches of the Code on a public register.

The Government has confirmed in their response that the reforms will have the following five aims of improving:

  • Fair trading oversight, by reviewing current powers and penalties under the Act to enforce compliance;
  • Transparency through developing disclosure documents and consumer information;
  • Consumer certainty around costs;
  • Accountability of operators and the sector; and
  • Dispute resolution processes.

Whilst the suite of exact reforms have yet to be confirmed by the Government, the Government has confirmed that they are taking immediate action on some measures, examining others further and will be consulting on any significant reform proposals.

Retirement Living Code of Conduct

Separately, an industry Code of Conduct has been proposed to apply throughout Australia.  This voluntary Code of Conduct is supported by the three peak bodies representing retirement village owners and operators: the Property Council of Australia, Leading Aged Care Services and Aged and Community Services Australia.

The Code has been prepared to set standards above statutory obligations to provide village operators with a clear framework for meeting the expectations of current and prospective retirement village residents. Once finalised, all operators will be strongly encouraged to sign up to this Code of Conduct as part of their commitment to the retirement village sector and its standards.

There is currently a public consultation on the draft version of a new national Retirement Living Code of Conduct (accessible via http://www.retirementliving.org.au/news/provide-feedback-code-conduct/) which closes on 6 August  2018.

This article was written by Christopher Conolly, Partner and Alicia Yurka, Solicitor.

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