December 2024
Welcome to the second issue of Consumer Protection’s bulletin for retirement village residents.
Retirement Village Amendment Act 2024 is assented to!
On 13 November 2024, the Honourable Chris Dawson AC APM, Governor of Western Australia, assented to the Retirement Villages Act Amendment Act 2024 (the Amendment Act). The Amendment Act makes a range of important changes to the Retirement Villages Act 1992 (WA) (the Act) intended to improve the experience of residents living in retirement villages.
What's next?
The changes made to the Act will come into operation in about 12 months’ time when new regulations to support implementation of the changes are ready.
This bulletin provides an update about the development of regulations applying to capital items, modification, and termination of retirement village schemes.
1. Proposed regulations applying to management of capital items in a retirement village
To reduce disputes among residents and operators about the management of capital items, the Amendment Act will introduce definitions of the following terms into the Act:
- Capital item will mean any building or structure in a retirement village and any plant, machinery or equipment used in the administration of the retirement village.
- Capital maintenance will include works carried out for the purpose of repairing or maintaining a capital item.
- Capital replacement will mean works carried out for the purpose of replacing a capital item.
Requirement in the Act to prepare a plan for capital maintenance and capital replacement
Operators of retirement villages will be required to prepare and keep up to date plans for capital maintenance and replacement.
Regulations are proposed to:
- specify the period that the plan for capital maintenance and replacement must cover (proposed to be 5 years);
- set out the information operators must include in plans for capital maintenance and capital replacement;
- specify that plans for capital maintenance and capital replacement do not need to cover maintenance of a routine nature that is carried out on a regular basis (for example lawn mowing, pool cleaning or window cleaning)
- require operators to review the plans in each financial year and at least 1 month before the annual general meeting with residents; and
- require the plan for capital maintenance and capital replacement, with any amendments, to be provided to residents at each annual general meeting.
Proposed regulations will require the plan for capital maintenance and capital replacement, with any amendments, to be provided to residents with other financial and budget information before each annual general meeting.
Proposed regulations will require each retirement village to have a plan for capital maintenance and replacement within 3 months of the requirement in the Act coming into operation.
Requirement in the Act for operators to keep a capital maintenance fund
The Act will require operators of retirement villages to maintain a fund for capital maintenance. The proposed new rules will require:
- the capital maintenance fund to be held in an account with an authorised deposit taking institution
- for all monies paid by residents in connection with capital maintenance, including from recurrent charges, to be held in a capital maintenance fund, and
- operators not to use the money in the capital maintenance fund for other purposes other than to pay for capital maintenance.
The Act will also enable residents and the Commissioner for Consumer Protection to apply to the State Administrative Tribunal (the Tribunal) to compel an operator to maintain a capital maintenance fund in accordance with the requirements in the Act and regulations.
Proposed regulations will require operators to set up a capital maintenance fund within 3 months of the requirement to establish this fund coming into operation.
2. Proposed regulations applying to modification of retirement villages
Changes to buildings, facilities, amenities or services in retirement villages also lead to disputes between residents and operators. The Act has been amended to reduce these disputes by providing a clearer framework under which a retirement village can be modified.
The amended Act will define modification of a retirement village to include:
- redevelopment of the land used for the retirement village;
- construction, demolition or change of use of a building or structure (including residential premises), and
- change to services or amenities that are provided or made available to residents.
Operators will be able to make modifications to a retirement village pursuant to a modification plan approved by a special resolution passed at the residents’ meeting or by an order of the Tribunal. These safeguards will ensure that residents have a say on modifications that impact their lifestyle, services and financial position when living in a retirement village.
Regulations will set out the information which operators must include in a modification plan. This information must be sufficient to ensure that residents are able to consider the impact of the proposed modification and make an informed choice about whether the proposal is in the interests of residents.
To provide residents with enough time to consider the modification plan, proposed regulations will require a special resolution to be passed 1 month after residents have been given the plan.
Regulations will also provide that if a modification plan has not been considered or approved within 3 months after the plan is given to residents, an operator can apply to the Tribunal to approve the plan.
The proposed regulations balance the interests of residents to be consulted about changes that impact their life in a village and the interests of operators to maintain a village that is commercially viable.
3. New arrangements for termination of retirement village schemes
The Tribunal, instead of the Supreme Court, will now be responsible for approving terminations of retirement village schemes, if residents are still living in the village.
An operator seeking to close a retirement village will be required to provide each resident with a termination plan before the Tribunal approves a termination of a retirement village scheme.
The Tribunal will not approve a termination plan unless the operator:
- holds a meeting of residents after 1 month of giving each resident the termination plan, and
- obtains, or takes reasonable steps to assist each resident in obtaining alternative accommodation of reasonably the same standard or reasonably acceptable to the resident.
Would you like to participate in the consultation?
Consumer Protection is interested in your views on proposed regulations applying to capital items and modification of retirement village.
If you would like a copy of a consultation paper which provides more detailed information on the current consultation topics, please email consultations@demirs.wa.gov.au.
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Want to know more about retirement village living?
More information on retirement village living can be found on the Consumer Protection website.
Enquiries can be directed to 1300 30 40 54 or by email.