NSW Retirement Villages Regulation Changes 2017 - increased transparency given to current and future residents
The Retirement Villages Act 1999 (NSW) (Act) together with the supporting regulations govern the rights and obligations of residents and village operators in New South Wales covering approximately 55,000 residents living in over 600 villages.
On 1 September 2017 the Retirement Villages Regulation 2009 (NSW) (2009 Regulation) was replaced by the Retirement Villages Regulation 2017 (NSW) (New Regulation).
The New Regulation retains the majority of existing provisions under the 2009 Regulation, while making amendments to improve the protection for current and future residents.
The main changes under the New Regulation, with reasons for the change provided in the Regulatory Impact Statement, are summarised as follows:
- Requiring copies of a village’s insurance policy documents and the most recent safety inspection report to be available to residents – further transparency affords better protection to residents, current and future when considering retirement villages;
- A new ‘average resident comparison figure’ in the Disclosure Statement to facilitate more effective comparison between villages from 1 March 2018 – further transparency when future residents are considering retirement villages;
- Reducing the maximum amount payable for an operator’s legal and other expenses in preparing a village contract to $50 – reducing the costs payable by a future resident;
- Adding new matter for which village rules can be created, including smoking in communal areas – broadening the powers of the operators so that they can ensure a safer and better quality of living for residents;
- Requiring clearer information in annual budgets on head office expenses – providing further transparency around financial matters of villages;
- Lowering the maximum amount allocated for contingencies to $1 – reducing the financial burden on villages under contingencies;
- Extending the list of items that cannot be financed by recurrent charges – providing further financial protection to current and future residents of villages;
- Simplifying the process allowing residents to hold office on a residents committee for longer than three years – giving residents more power to be involved in the management of the residents committee;
- Allowing service of documents by electronic means;
- Putting an obligation on the retirement village operator to serve the prescribed form Condition Report on the prospective resident at least 14 days before entering into the contract, or if the premises are still being constructed, 14 days before the resident occupies the premises;
- Giving clarification to process for disputes between operators and residents and nominated representatives of residents for the purposes of disputes;
- The New Regulation contains updated prescribed form documents for use by retirement village operators including:
- Disclosure Statement;
- Condition Report; and
- Standard form of village contract.
- The New Regulation requires that the following additional prescribed documents be made available for residents:
- If the operator and a residents committee were parties to any court or tribunal proceedings in the previous 5 years;
- Waiting list and waiting list fee exist – operator’s written waiting list policy;
- If a company title scheme, the constitution and the replaceable rules as set out under the Commonwealth Corporations Act 2001;
- If a community land scheme, the management statement, any management agreement relating to the village and minutes of the most recent Annual General Meeting;
- If a strata scheme, the by-laws, any management agreement and minutes of the most recent annual general meeting;
- Certificates of currency and policy documents for the village;
- Most recent safety inspection reports; and
- Detailed list of currently available premises in the retirement village.
It is important that retirement village operators are familiar with the new statutory precedent documents and required disclosure. In particular village operators should:
- Update the Disclosure Statement, Condition Report and Resident Contract;
- Add the required documents to the material available to residents;
- Revise the procedure for Condition Reports to ensure they are issued with the Disclosure Statement;
- In preparing the budget review the changes in the New Regulations; and
- Develop an average resident comparison figure for inclusion in the Disclosure Statement by 1 March 2018.
If you require advice in relation to the New Regulations or the updating of the disclosure documents or contracts in relation to a retirement village in NSW, please contact our Property Partner, Christopher Conolly.
Christopher Conolly, Partner
Peter Liogas, Associate