The Retirement Villages Act 2003 (“the Act") came into force in 2004. The purpose of the Act is to provide greater protection to residents of Retirement Villages and their property rights, by providing a clear legal framework for residents, intending residents and operators.
What is a Retirement Village?
The definition in the Act is broad and includes any property or building that contains 2 or more residential units providing residential accommodation together with services and/or facilities for persons predominantly in their retirement (and their spouses), and for which they pay a capital sum as consideration.
The Act requires the operators of all new and existing Villages to lodge an application for registration with the Registrar of Retirement Villages.
If a Village in not registered, it is unlawful for an operator to make any offer of occupation or permit the publication of any advertisement relating to the Village.
It is important to note that the fact that a Village is registered does not mean that it has the approval of the Registrar or the Crown.
The Act provides increased protection by requiring:
- That the industry complies with a Code of Practice that has been approved by the Senior Citizens’ Minister.
- That every Village has a Code of Resident’s Rights.
- That the Occupation Right Agreement contains a number of standard terms.
That an intending resident receives:
- A copy of the Code of Practice.
- A copy of the Code of Resident’s Rights.
- A comprehensive disclosure statement. The disclosure requirements go some way to ensuring that intending residents have the ability to make informed decisions before investing their money in a Village. The statement must outline all essential information, including:
- All entry, occupancy and exit costs and the terms of payment (exit costs apply when a resident moves out or passes away).
- The terms and conditions of residence.
- Sale and disposal arrangements.
- A suggestion that intending residents obtain independent legal advice.
- That an intending resident be given a 15 day ‘cooling off’ period to cancel the agreement.
- That each Village has a statutory supervisor and that the effect of the Act is monitored by a Retirement Commissioner.
- That an operator provides and makes known a facility for dealing with complaints along with a dispute resolution procedure.
- That intending residents obtain independent legal advice before signing the occupation agreement.
That new penalties for breaches of the legislation be provided including:
- Suspension of registration.
- Voiding the agreement.
- Being charged with a summary offence.
Although the increased need for protection arises due to a number of factors, the most obvious must be that Retirement Village operators are dealing with potentially vulnerable members of society — people who are acquiring the right to occupy a property in a Village while not necessarily acquiring a corresponding saleable interest in the property.
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