The Minister for Consumer Affairs has recently published an Issues Paper (“Paper”) on the review of the Retirement Villages Act 1986 (“RV Act”). The Paper marks the beginning of the Victorian Government’s public consultation process.
The Paper identifies key issues facing the retirement village sector.Some of these issues are based on recommendations made by the Legislative Council’s Inquiry into the operation and regulation of the retirement housing sector in Victoria in 2017. Responses to the Paper must be submitted by Friday, 6 December 2019.
Key issues identified in the Paper are set out below.
Entering a retirement village
The Paper considers and seeks views on how prospective residents engage with retirement villages, including:
- the adequacy of current disclosure obligations and what further improvements can be made to improve prospective residents’ understanding of the financial and contractual arrangements of living in a retirement village;
- the form and complexity of retirement village contracts, and what improvements can be made to make it easier for prospective residents to compare villages, assess their suitability and understand their rights and obligations; and
- whether retirement village operators should be required to provide more information to prospective residents about deferred management fees and departure entitlements.
Living in a retirement village
The Paper examines and seeks views on the governance of retirement villages, including:
- whether annual reporting requirements are adequate for residents;
- whether in mixed tenure retirement villages the obligations to hold resident meetings under both the Owners Corporations Act 2006 and the RV Act are appropriate;
- who should be liable for maintenance and capital items and to what extent this should be regulated;
- whether all retirement villages should be required to have a maintenance and capital replacement plan and/or fund; and
- whether the regulatory framework for providing privately funded care services to retirement village residents provides high enough standards of care to protect the welfare of residents.
Leaving a retirement village
The Paper considers and seeks views on what happens when a resident leaves a village, including:
- whether the unit sale and re-leasing process adequately balances the interests of the residents and the operator;
- how reinstatement and refurbishment costs should be dealt with to ensure that an appropriate balance between the interests of the departing resident and the operator is achieved;
- whether ongoing liability for fees and charges is equitably distributed between the departing resident, the operator and the remaining residents; and
- what the arrangement should be for sharing capital gains (or losses) and to what extent this should be regulated.
The Paper considers and seeks views on:
- whether the internal dispute resolution procedure works effectively to ensure that complaints are heard and dealt with fairly;
- whether mediation of a dispute through an external mediation service (such as the Dispute Resolution Centre of Victoria) should be a pre-condition to access to VCAT; and
- the best process to achieve low cost, timely and binding resolution of disputes.
The Paper examines and seeks views on whether the Director of Consumer Affairs Victoria should be given additional powers and enforcement options to regulate the offence provisions of the RV Act.