The Retirement Villages Amendment Bill 2008 was passed
by both Houses of Parliament last Thursday 4 December 2008 (the
last sitting day of Parliament this year).
The Act will commence on a date to be appointed by proclamation
which is expected to follow the release of the associated
regulations which should be finalised in the first quarter of
The changes listed below are generally good news for Operators
and should be taken into account in the preparation for the
introduction to the amendments. The next steps for Operators are
revise their standard Resident Agreement;
prepare a draft "general inquiry document"; and
consider budget and management procedures required by the
As the Act will affect all contracts and to that extent will act
retrospectively, it will be important to take into account the
reforms for all future resident agreements and transactions.
The Act differs from the original version introduced to
Parliament on 26 June 2008 in the following respects:
The original version limited operators who charged ingoing
contributions or departure fees to funding a maximum of 50% of the
costs of capital maintenance from the capital works fund and
recurrent charges. This limitation has been removed.
The original version required operators to obtain
residents' consent to capital maintenance works. This
requirement has been diluted to requiring operators to address
capital maintenance in the proposed annual budget.
The original version limited the proportion of the costs
payable by operators for capital maintenance within the residences
of registered interest holders, including registered proprietors,
shareholders in company title schemes, leases for a term of 50
years or leases for the life of the lessee under which the lessee
was entitled to a proportion of capital gains. The capital
maintenance costs were payable by the operator and the registered
interest holder in the same proportions as they would share any
capital gain. This apportionment has been removed.
The original version prohibited the funding of maintenance or
replacement of roads or footpaths within a retirement village from
the capital works fund or recurrent charges. This prohibition has
The original version allowed the residents of a retirement
village to pass a special resolution consenting not to receive
proposed annual budgets. Although residents may still give such
consent, it need not be obtained by special resolution, but may
only be given if the recurrent charges collected for the year do
not exceed $50,000. This mirrors the $50,000 limit, after which
operators must issue quarterly accounts and have their annual
The original version limited the period for which recurrent
charges payable by a registered interest holders after vacating
their residence to 42 days. Registered interest holders paying
recurrent charges after vacating their premises at the commencing
date of the amending Act, will only be required to pay recurrent
charges for 42 days after the commencing date.
The original version replaced the concept of "capital
replacement fund" with a "capital works fund". Any
capital replacement fund was to be dissolved on the commencement of
the relevant sections and the money to be held by the operator or
used to fund the operator's proportion of any capital
maintenance or replacement. The money from any dissolved capital
replacement fund is now simply to be paid to the operator.
Miscellaneous drafting and transitional amendments have also
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guide to the subject matter. Specialist advice should be sought
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