Australia: Exposure Draft of the ACT Retirement Villages Bill 2010

Last Updated: 8 September 2010
Article by Arthur Koumoukelis and Matthew Mallos

On 5 May 2010, Labor MP Mary Porter tabled an exposure draft of the proposed Retirement Villages Bill 2010 for the Australian Capital Territory.

The Bill is open for consultation until 22 September 2010, after which time a revised version of the Bill is intended to be tabled - sometime after the February 2011 parliamentary sittings.

The Bill heavily borrows from the language and concepts of other jurisdictions especially Queensland. However, Queensland's retirement village industry is significantly more mature and larger than the ACT's. There are more than 250 registered retirement village schemes in Queensland as compared to the ACT's 28 retirement villages, and it must be asked whether such a comprehensive regime, which suits an industry the size of Queensland's, is suitable for the much smaller ACT.

The Bill seeks to introduce a 'one size fits all' approach, which in the circumstances could be said to give rise to an unnecessary, excessive, even stifling, 'over regulation' of the industry in the ACT.

Some key proposals in the Bill which can be criticised as being 'over regulation' are:

  • forcing operators to 'buy back' residents' premises within 30 days of the resident leaving
  • the requirement for a Public Information Document as prescribed
  • the extension of the 'cooling off' period to 21 days
  • requiring the operator to share liability for recurrent charges for general services with a former resident 90 days after they vacate
  • limiting increases in recurrent charges for general services to changes in the Consumer Price Index unless residents have passed a special resolution for a larger increase
  • the introduction of the statutory charge on all retirement village land in the ACT
  • the introduction of detailed rules for the conduct of residents' committee meetings
  • introducing a prescribed method for resolving retirement village disputes.

Any submissions from operators and other stakeholders on the proposed Bill are due by 22 September 2010. Any operators who would like a copy the proposed Bill and Consultation Outline or who need assistance with preparing submissions to MP Mary Porter on the Bill, please contact us using the details above.

Forcing operators to 'buy back' premises within 30 days

Section 46 of the proposed Bill requires operators to 'buy back' residents' premises by refunding their ingoing contribution within 30 days. It applies where a resident terminates their residence contract by giving the operator one month's notice.

Forced 'buy backs' are not uncommon and exist in other jurisdictions. For example, in New South Wales, an operator must refund ingoing contributions paid by residents who are 'non registered interest holders' within six months. However, the 30 day 'buy back' requirements in section 46 of the proposed Bill are more onerous for operators and are unmatched in any other state or territory.

Such a requirement is likely to cause increased pressure on operators' cashflows. Financiers to the ACT retirement village industry are also likely to have difficulty working with such strict 'buy back' obligations.

The Pubic Information Document

The Bill says that operators must provide prospective residents with a Public Information Document (PID) which is borrowed directly from Queensland's PID. The content of the PID is prescribed in the Bill and the Bill adopts similar terms to those used in section 74 of the Retirement Villages Act 1999 (QLD).

When complete with all of the information an operator is required to incorporate in it, the PID will be close to 30 pages long and contain a large amount of generic and general information. Prospective residents are likely to be given this information numerous times if they make enquiries at more than one village. Anecdotal evidence in Queensland is that prospective residents are put off reading the whole PID when deciding whether to move into a particular retirement village.

A PID is said to be necessary in the ACT to address concerns that existing information about retirement villages provided by operators is 'excessive and difficult to understand'. One should question the usefulness of a document as large as the PID if the policy intention is to make information about retirement villages more accessible and understandable for prospective residents.

Extending the 'cooling off' period to 21 days

Under the Retirement Villages Industry Code of Practice (1999) prospective residents currently have a five business day 'cooling off' period.

Under the Bill, a 21 day 'cooling off' period is proposed from the date the residence contract is signed or, if the contract is contingent upon a later event, the date the later event occurs. More importantly, the operator is not entitled to receive the ingoing contribution until the end of the 21 day period. During this time, the resident may terminate their residence contract, without penalty and the operator must immediately refund to the resident any money they paid under their residence contract including their ingoing contribution. The 'cooling off' period is not ended by the resident moving into premises in the retirement village.

The 'cooling off' provisions in the Bill attempt to imitate the 'settling in period' which exists in other jurisdictions; however the Bill contains none of the protections for operators which other states have provided. The operator is not given any entitlement to rent while a resident occupies premises in their village and is not able to recover its costs or any other fees in relation to the resident's occupation of premises in the village. The requirements that the operators hold residents ingoing contributions in trust and immediately refund them if a resident terminates during the 'cooling off' period is likely to impact operator's cashflows.

Former resident and operator to share liability for recurrent charges

Operators will become liable for a proportion of recurrent charges for general services after 90 days from the date the resident vacates their premises if the premises are not re-leased or sold. The operator's liability will be in the same proportions in which it shares in capital gain with a resident. After nine months, the operator becomes solely responsible for paying recurrent charges in respect of a vacant unit irrespective of any capital gain share. This is a significant departure from other jurisdictions.

Under the Code, this issue has largely been left to be determined by the resident and the operator under the terms of their residence contract and the provisions of the Bill would override the terms of contracts operators have with existing residents.

The provisions in the Bill appear unnecessary given that operators and residents have been successfully working under the Code for sometime.

Increases in recurrent charges for general services limited to CPI

The Bill proposes to require operators to limit percentage increases in recurrent charges for general services to the change in the Consumer Price Index for Canberra. While residents will be able to approve an increase exceeding CPI, such approval requires a special resolution at a meeting of residents. This is unlike other jurisdictions where budgets are, in the main, passed by a majority vote.

While limiting increases in recurrent charges to CPI is clearly the approach preferred by residents, it fails to have regard to the actual cost increases faced by many operators from year to year, which in most cases exceed CPI.

The only expenditure to which the fixed increase regime will not apply are rates, taxes and levies charged by the Commonwealth or the ACT Government, increases in awards for salaries or wages of village staff, insurance and contributions to the long term maintenance fund or maintenance reserve fund. This mirrors other jurisdictions such as Queensland and New South Wales.

Statutory Charge over retirement village land

The Bill proposes that a statutory charge apply to land used for registered retirement village schemes. As all operators must register their villages as retirement village schemes prior to entering into a residence contract, the statutory charge is intended to apply to all villages in the ACT. This is similar to the statutory charge which applies to Queensland.

While the charge exists over all registered retirement village schemes, the security it provides appears to be limited to those residents who do not own or have a leasehold interest in their premises. The definition provided in the Bill as to which residents 'own' their premises lacks clarity and should be improved.

Religious and charitable organisations may apply to be exempt from the statutory charge, however this must be done prior to registration of a retirement village scheme.

Detailed rules for the conduct of residents' committee meetings

Under the Code, residents are largely free to determine their own procedures for the conduct of resident meetings. The Code requires only that an operator not restrict a resident from participating in a residents' committee.

This simple, streamlined approach to resident meetings is to be replaced under the Bill with an entirely new regime. The new rules detail how decisions at meetings of residents' committees

may be made, how votes are cast, how proxies are appointed by residents and the quorums required to transact business at residents' committee meetings.

Resolution of retirement village disputes

A detailed regime for resolving retirement village disputes is set out in the Bill. Importantly, it requires operators and residents to attempt to negotiate a resolution to the dispute prior to applying to the ACT Civil and Administrative Tribunal.

If the dispute cannot be resolved informally, the parties may apply to ACAT which will have powers to make a wide range of orders in relation to the dispute.

A process for resolving disputes informally through a Disputes Committee already exists under the Code. It is questionable whether the proposed provisions in the Bill will achieve a quicker resolution of disputes than the regime that exists under the Code.

One size does not fit all for the ACT

It is suggested that more work needs to be done before a revised version of the Bill is introduced to parliament in February 2011. Recently, discussions with parliamentary members have indicated that the introduction of a new bill may be deferred until late 2011, however operators should not rest on their laurels.

Operators and government must find a workable balance between the two key stated objects of the legislation, namely to provide protection for consumers in the retirement village industry and to encourage continued growth of the industry in the ACT.

Legislation in the form of the proposed Bill will operate contrary to the latter stated object and, as indicated in this article, arguably does so in an unnecessary and severely excessive way. It may have the unintended consequence of discouraging further development in the ACT.


Arthur Koumoukelis

t (02) 9931 4873


Matthew Mallos

t (02) 9931 4898


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions