Minister for Consumer Affairs Gabrielle Williams (pictured) last Wednesday introduced the Retirement Villages Amendment Bill into Victorian Parliament, claiming it gives residents in retirement villages some of the strongest protections in Australia.
It is the first state to force retirement village operators to sign up to a mandatory Code of Practice in a strong crackdown on operators.
The Retirement Living Council (RLC) and ACCPA jointly have a voluntary Code of Conduct, but just 30% of all operators have signed up to it. The RLC has announced a significant cut in the code's annual subscription price to try to motivate operators to sign up.
Also significant, VIC is the first state government to stipulate a retirement village operator cannot remove a resident for health reasons if the resident can be cared for in their home and received care services.
The Retirement Villages Amendment Bill states, in part:
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Retirement village contracts will be standardised and clearer about entry and exit processes so prospective residents are better informed before signing.
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Implement stronger controls on how exit fees are calculated and a requirement for annual contract checks, so residents always understand their obligations.
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For all new contracts, entitlements will need to be paid within 12 months of a resident leaving.
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In 2025, a mandatory Retirement Villages Code of Practice will be developed in consultation with the community and retirement village sector.
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Dispute resolution processes will be strengthened with new consistent procedures set up in all villages and a new alternative dispute resolution service set up within the Department of Government Services.
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Restrictions on sharing any capital gain and capital loss with the resident – they must be shared in the same proportion; as well as new definitions of what comprises a capital gain and capital loss;
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Restrictions upon a resident’s obligations to repair, reinstate or refurbish the premises upon departure – the resident is not responsible for fair wear and tear, the resident is responsible for reinstatement but is not responsible for renovation or upgrade works.
The legislation does not cap exit fees, also known as deferred management fees.,
"This new service will help resolve less complex disputes between operators and residents, or between residents. More serious disputes, particularly around termination of contracts, and disputes over significant financial matters can be referred to VCAT. The Commissioner for Residential Tenancies’s role will be expanded to support research, advocacy and advice to government on the retirement villages sector,” said the Minister.
The impact of the resident being responsible for reinstatement but not responsible for renovation or upgrade works is likely to eliminate capital gain share contracts going forward; perhaps not a win for future private operator residents.
RLC Executive Director Daniel Gannon said "many of the proposed changes in Victoria appear sensible and reasonable, especially as they relate to the provision of more information to prospective residents and higher standards.
"Given historic criticism about contract complexity, we’ve worked with State Governments across the country to inject more transparency, clarity and certainty into this part of the process, including in Victoria.
"Some of the proposed changes in Victoria – based on what we have seen to date – speak to our desire to achieve these changes," he added.
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