Update on NSW Retirement Villages – Reforms to the Retirement Villages Act 1999 (NSW)

26 February 2019

In June 2018 the NSW Government responded to the Inquiry into the NSW Retirement Village Sector by Kathryn Greiner (Greiner Report) indicating support for the 17 recommendations to reform the NSW Retirement Village Sector set out in the Report.

We set out the recommendations of the Greiner Report in our article ‘NSW Retirement Villages – Government commits to reform’ dated 30 July 2018.

Whilst the full suite of reforms have yet to be confirmed by the Government, this article covers the following:

  • Reforms to the Retirement Villages Act 1999 (NSW) starting 1 July 2019; and
  • Recent comments by the Minister for Better Regulation, Matt Kean on further reforms.
Reforms to the Retirement Villages Act 1999 (NSW) starting 1 July 2019

The Retirement Villages Amendment Act 2018 No 77 (NSW) amends the Retirement Villages Act 1999 (NSW) and the Retirement Villages Regulation 2017 (NSW) with most of the amendments to commence on 1 July 2019.

The amendments are designed to give effect to the following recommendations of the Greiner Report:

  • Operators of retirement villages to ensure an emergency plan is prepared, maintained and that both residents and staff are familiar with the plan. Operators must also undertake a safety inspection at least once each year;
  • Operators must ensure there is an annual emergency evacuation exercise at least one every year and key safety information is displayed in communal areas and provided to residents;
  • Operators of retirement villages, if requested in writing, must meet the resident once a year to explain certain village contract information;
  • Rules of conduct for operators of retirement villages in relation to professionalism, training, competencies, performance and behaviour apply;
  • Operators will have to maintain an asset management plan for retirement villages capital items;
  • Operators must seek consent from residents of retirement villages to the appointment of auditors of accounts;
  • Operators of a retirement village must make certain documents concerning the village available for inspection; and
  • New powers regarding the mediation of disputes.

The Amendment Act also provides for various penalties to apply to the Act where these changes are not complied with, ranging from $2,200 to $22,000 for each offence.

Minister for Better Regulation comments on further reforms

The Minister for Better Regulation, Matt Kean recently stated that the Liberal National Party would adopt all the recommendations from the Greiner Inquiry into retirement villages (Media Release 14 February 2019).

More specifically, the Minister has given us a glimpse that additional reforms will include the following:

  • A 42 day limit on the length of time villages can charge for general services, after someone leaves.

Currently under section 152 of the Retirement Villages Act 1999 (NSW) a former occupant of residential premises in a retirement village who is a registered interest holder is liable to pay recurrent charges for general services typically until a new resident moves in.

  • Require the village operator to buy back the retirement village unit after the following periods from the date the resident permanently vacates:
  • 6 months in metropolitan areas NSW; and
  • 12 months in rural areas NSW.

Currently there is no requirement for the operator to buy-back the premises for registered interest holders, whereas non registered interest holders must receive their refund in NSW after 6 months.

There were no further hints as to the mechanisms which would support these changes, such as the delineation of rural and urban areas (especially for regional areas), whether the reforms will apply to existing retirement village contracts and how the market value to buy back a unit would be determined.

Retirement Village operators must now start planning for the reforms due to commence on 1 July 2019 and take into account the effect of the further reforms proposed by the Minister.

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

Christopher Conolly

P: +61 2 9334 8729

E: cconolly@hwle.com.au

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