The Retirement Villages Act 2016 (SA) was introduced in November 2016 as the first part of the reform of retirement village laws in South Australia. The final piece of that reform, the Retirement Villages Regulations 2017, were released on 8 August 2017. The new Regulations and the new Act will commence from 1 January 2018.
South Australian operators will be aware of the significant changes introduced under the Act, in particular, new disclosure requirements, new requirements with respect to matters to be included in residence contracts, the 18 month maximum time limit for payment of exit entitlements, greater rights for residents upon resales and greater transparency in accounting to and consulting with residents in relation to the budgeting, financial reporting and future development at the village.
The Regulations provide the detail for many of these new requirements from the Act. In particular the Regulations:
- Include the form of disclosure statement in Schedule 2 to the Regulations. The disclosure statement is required to be provided to a prospective resident, together with the residence contract, residence rules, financial statements presented at the last annual meeting of residents, a copy of the minutes of the last two annual meetings of residents, the prescribed code of conduct and the village remarketing policy at least 10 business days before the resident enters into the residence contract.
- Set out additional matters which must be included in the residence contract. In addition to the usual basic information in relation to the resident, the operator and the village, and the financial obligations of the resident, the Regulations require the contract to include, among other things, a description of the features of the dwelling and a plan of the dwelling showing significant dimensions, details of the facilities available in the village including communal facilities for all residents and separate facilities allocated to the resident, details of services available to residents in the village including services available to all residents which are funded by the recurrent charges and optional personal services available to residents. Where the village has an established fund which the resident contributes to, the purpose of the fund, the amount and time for contribution by the resident must be included in the residence contract. For a village under development details as to the number of dwellings to be constructed, communal facilities to be constructed and their estimated completion dates must be included as well as details of any development approvals for the village. A copy of the village surplus and deficit policy and dispute resolution procedures must also be included in the contract.
- Include detailed obligations on the part of the operator in relation to the resale of the dwelling, including the remarketing policy to be adopted by and complied with by the operator. If the resident has the right to be involved in remarketing the dwelling (currently if the dwelling has not been resold within 9 months), the resident has the right to appoint an agent of the resident's choice to undertake the sale of the residence right, must notify the operator of the details of the agent and any offers made to purchase the residence right and the resident is liable to pay the agent's costs and commission on the sale.
- Require that the financial information to be presented to residents at the annual meeting must be in a form that separates out the financial information by retirement village site and is prepared in accordance with generally accepted accounting standards. The audited statement of accounts to be presented at the annual meeting must include details of any moneys collected from residents which are held in reserve for the establishment, maintenance, refurbishment or replacement of facilities at the village and must set out payments made from those reserves during the previous financial year.
- Include new requirements in relation to the operation of the resident committee, including meetings to be convened by the committee, voting procedures and minuting requirements.
- Provide that in addition to the condition report to be prepared prior to the resident moving into the dwelling, a vacated premises report must be completed by the operator not more than 10 business days after a resident ceases to reside in the residence.
- Set out basic requirements for the village dispute resolution policy.
The introduction of the Act and the Regulations mean that all operators will need to update their residence contracts, prepare a disclosure statement and ensure that they have policies to address these new requirements, including, among other things, a surplus and deficit policy, a remarketing policy and a dispute resolution procedure. Staff should be trained as to the new requirements and how to implement these new policies.