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