On 16 November 2011, Mary Porter, the member for Gininderra, tabled the Retirement Villages Bill 2011 for the Australian Capital Territory.

You can access the Bill here.

The release of the Bill, which had been expected earlier this year, follows on from much discussion which arose from the tabling of the exposure draft of the Bill in May 2010.

The exposure draft had been criticised as bringing 'over regulation' to the industry. The Bill carries this forward, drawing on the Queensland and New South Wales legislative regime and creating a highly regulated framework for a relatively smaller industry.

The Bill contains many variations from the exposure draft and contains some inconsistencies and ambiguities in its drafting.

Key Proposals

Of the eight key proposals which were considered at the time of the exposure draft, seven of those proposals have been retained in the Bill, that is:

  • the requirement for a Public Information Document as prescribed (division 5.1);
  • the extension of the 'cooling off' period to 21 days (section 30);
  • requiring the operator to share liability for recurrent charges for general services with a former resident 90 days after they vacate (section 142);
  • 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 or particular items of expenditure are incurred (section 146);
  • the introduction of the statutory charge on all retirement village land in the ACT (division 9.2), noting however there may be exceptions to the registration process for certain operators;
  • introducing a prescribed method for resolving retirement village disputes (part 11);

In respect of the eighth proposal, which required operators to 'buy back' residents' premises within 30 days of the resident leaving, this clause has been amended to limit its operations however the drafting of section 58 contains incorrect references and is unclear as to its operation.

For further information in respect of the key proposals, click here to read our update about the exposure draft.

Other Proposed Reforms

Other proposed reforms which are important to operators include:

  • a statutory definition of 'capital improvement' that draws upon income tax principles and a mechanism for residents to meet the cost of such improvements (division 8.1);
  • an obligation on operators to establish capital replacement and capital maintenance reserve funds and most relevantly the obligation to fund those accounts (divisions 8.2 - 8.3);
  • the use of quantity surveyor reports (divisions 8.2 - 8.3).

It had appeared for a while that the Bill had lost some momentum however now that it has been tabled it must be dealt with and presumably unless defeated, will take effect in time.

Operators working in the jurisdiction will need to become familiar with the legislation as will operators considering moving into the ACT. Other jurisdictions may look to the Bill and draw suggestions for further reform.

Contact Gadens if you require assistance to assess the impact of the Bill on your village operations.

For more information, please contact:

Sydney



Arthur Koumoukelis

t (02) 9931 4873

e msant@nsw.gadens.com.au

Jessica Smythe

t (02) 9931 4949

e jsmythe@nsw.gadens.com.au

Brisbane



Judd Last

t (07) 3231 1606

e jlast@qld.gadens.com.au

Stafford Hopewell

t (07) 3114 0232

e shopewell@qld.gadens.com.au

Melbourne



Malcolm Watson

t (03) 9612 8218

e mwatson@vic.gadens.com.au

Perth



Martin Matthews

t (08) 9323 0950

e mmatthews@wa.gadens.com.au

Adelaide



Julia Sweeney

t (08) 8233 0630

e jsweeney@sa.gadens.com.au

This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.