- The Health and Other Legislation Amendment Act 2019 (Qld) was given assent on 11 April 2019.
- The Act amends the Retirement Villages Act 1999 (Qld) to confirm that mandatory buy-back provisions extend to residents living in freehold retirement village units.
- The amendments will apply retrospectively from November 2017 and where a former resident’s right to reside has not yet been resold, scheme operators may be required to settle buy-back transactions as early as 23 May 2019.
The Health and Other Legislation Amendment Act 2019 (Qld) (Amendment Act) was given assent on 11 April 2019.
You may recall from our article late last year that the Amendment Act amends the Retirement Villages Act 1999 (Qld) (Act) to confirm that the mandatory ‘buy-back’ provisions extend to residents with a freehold interest in a retirement village unit.
The buy-back provisions require scheme operators to enter into a contract to purchase a former resident’s freehold interest and complete the purchase within a certain time. The time for completion is the later of 18 months after the termination date, or if a resident has died, 14 days after the operator is shown the probate of the former resident’s will or letters of administration of the former resident’s estate.
The amendments apply retrospectively from November 2017, with the first 18-month buy-back period having expired on 10 May 2019. However, the Amendment Act provides a ‘grace period’ so that the earliest a buy-back transaction will be required to be settled is 23 May 2019. Scheme operators should carefully check their records to confirm when former residents terminated their rights to reside to ensure that this deadline is met in the event a former resident’s freehold interest has not been resold.
Scheme operators should also be aware of the following:
- Scheme operators may apply to the Queensland Civil and Administrative Tribunal for an order extending the 18-month period if the operator will likely suffer financial hardship.
- If the purchase price cannot be agreed, new section 63D states how the purchase price for the former resident’s freehold property is to be decided.
- A scheme operator can seek a reimbursement from the former resident for legal fees incurred when entering into a contract under the buy-back provisions. However, scheme operators cannot charge a sales commission.
- Any exit fee is not payable by the former resident until the mandatory buy-back is completed.
- The Amendment Act adjusts the commencement date of the 18-month period to maintain protections for relatives of a former resident who continue to reside in the unit.
- The Amendment Act amends the Duties Act 2001 (Qld) to provide a transfer duty exemption for buy-back transactions.