On 24 March 2015 the WA Government gazetted theRetirement Villages Amendment Regulations 2015 (New Regulations) and the Fair Trading (Retirement Villages Code) Regulations 2015 (New Code), effective 1 April 2015. Retirement village residence contracts require a significant amount of redrafting to comply with the New Regulations. The provisions in the New Code affect the management and operations of retirement villages and require changes to current practices.
In relation to residence contracts, the New Regulations provide:
- specifically worded provisions that must be included (e.g. a prescribed Notes section, statement about the Act, Regulations and Code, warranty as to the condition of premises and prescribed worded form relating to termination and the resident’s right of occupation);
- matters that must be detailed (e.g. memorial number, details of and charges and conditions relating to, personal and communal services and personal and communal amenities, that the administering body may not vary the provision or availability of a communal amenity or communal service or introduce a new communal service unless the residents consent to the variation by special resolution, right of a resident to carry out urgent repairs that are the responsibility of the administering body); and
- provisions that must not be included (e.g. provisions giving the administering body or close associate a power of attorney).
Although some of the New Regulations commence 1 April 2015, the New Regulations that apply to the content of residence contracts commence 1 October 2015. Therefore retirement village operators have some time to redraft their residence contracts to ensure compliance for all residence contracts entered on or after 1 October 2015. Section 14A of the Retirement Villages Act 1992 (Act) provides that a failure to comply with the New Regulations is subject to a fine of $20,000.
The New Code includes a number of new requirements regarding:
- auditing financial statements (unless residents by special resolution agree otherwise);
- extended consultation with residents’ committees; and
- more comprehensive reserve fund budgeting and reporting.
The New Code has some transitional provisions so that the reforms relating to budgets, quarterly and annual financial statements will not apply to existing retirement villages until the financial year that begins on 1 July 2016. Other provisions of the New Code will commence on 1 April 2015.
This article highlights only some, not all, of the changes in the New Regulations and New Code.
Special thanks should go to Joe Lenzo’s team at the Property Council and the PCA’s Retirement Living Committee for their hard work in ensuring the concerns of village owners and operators received due consideration.