Retirement Villages Amendment Bill 2018 (NSW)

1 November 2018

Publications

Following the Greiner Review Report into the retirement village sector, the Retirement Villages Amendment Bill 2018 (Bill) was introduced into NSW Parliament on 24 October 2018 to give effect to some of the Greiner Review recommendations. The Bill is expected to deliver the first legislative response to the recommendations in the Greiner Review Report.

We have summarised the main amendments proposed by the Bill to the Retirement Villages Act 1999 (NSW) (Act) below.  The Bill does introduce the concept of binding ‘Guidelines’ that operators must comply with, which supplements the provisions in the Act and the Regulations.

Emergency plans for the village

Village operators will need to prepare and maintain an emergency plan for the village and ensure that all residents and staff are familiar with the plan. All emergency plans will need to include certain prescribed matters (amended section 58A). The provisions relating to the annual safety inspection and reporting to residents have also been tightened.

Annual emergency evacuation exercises and key safety information

Village operators will need to undertake an evacuation exercise for residents at least once each calendar year, to display key safety information in the village and to provide each resident with key safety information in relation to their residential premises (new section 58B).

Meetings to explain village contract information to residents

Residents will be able to request a village contract information meeting with the operator at least once each calendar year to explain the resident’s current village contract information, and provision of a written summary of that explanation at the meeting. Operators will be required to hold such a meeting with a resident within 30 days of receiving the request for a meeting (new section 69A).

The matters that must be covered at the meeting will include the requirements for terminating a village contract, the estimated departure fee, the estimated sale price for the premises, the estimated amount that would be payable by the operator to the resident following the sale of the premises, estimates of any other amounts payable by the resident under their village contract (including any capital gain shared with the operator).

Any estimates provided at the meeting must be reasonable and calculated as if the resident’s right to occupy the premises was terminated on the day of the meeting or no later than 30 days after the meeting.

Rules of conduct for operators of retirement villages

The Bill introduces new Division 5A (Rules of conduct for operators) into Part 6 of the Act.

Regulations will be able to prescribe rules of conduct for village operators with respect to professionalism, training, competencies, performance and behaviour in connection with the management or operation of retirement villages. This will include standards of training of staff, honesty and fairness, conduct in relation to the marketing of retirement villages and the use of terminology, internal dispute resolution measures (new section 83B).

Asset management plans

Village operators will need to prepare and keep up to date an asset management plan for items of capital at the village for which the operator is responsible. The form and content of the asset management plan may be prescribed by the regulations (new section 101A) which may extend the reporting to include information on all costs associated with maintenance and replacement of capital items.

Consent for appointment of auditors

The Bill introduces new Subdivision 1 (Auditing of accounts) into Division 6 (Annual accounts) of Part 7 of the Act.

Currently, operators are only required to seek the residents’ consent to appointment of an auditor of the village’s accounts if the audit fees are to be paid by the residents and the auditor did not audit the accounts for the previous financial year.

Under the amendments proposed by the Bill, only a qualified auditor whose appointment as the auditor has received the residents’ consent may audit the village’s accounts (new section 118B).

New section 118C will outline the information to be provided, the proposed tenure and process that must be followed by an operator each calendar year to seek the residents’ consent before appointing the village auditor. This period of appointment of the auditor may be up to three years if the residents agree.

Following notification by the operator of the details of the proposed auditor of the village, the residents must meet, consider and vote on the appointment within 30 days. If the residents do not consent to the auditor proposed by the operator, they must notify the operator in writing and nominate an alternative auditor for the operator’s consideration. The residents will have the option of a further 30 days in which to advise the operator of their nominated alternative auditor.

If an operator does not accept the alternative auditor proposed by the residents, it will be able to apply to the NSW Civil and Administrative Tribunal (Tribunal) for resolution of the dispute. However, the Tribunal may consent to the appointment of the auditor proposed by the operator only if the Tribunal considers that there are exceptional circumstances for doing so.

Provision, sharing and publication of information about retirement villages

New section 197B will enable the regulations to make provision with respect to:

  • the provision of relevant village information to Fair Trading;
  • the publication of relevant village information; and
  • the exchange and sharing of relevant village information by government agencies.

According to the second reading speech for the Bill, it is intended that the final mandatory data, the form of notice and the frequency of reporting will be prescribed in the regulations following further consultation with industry and residents’ groups.

Mediation of disputes

Amended section 203 will enable the regulations to make provision for the mediation of disputes arising under the Act, including the circumstances where mediation will be mandatory.

Fair Trading guidelines

New section 189B will enable Fair Trading to issue guidelines to assist operators of retirement villages in complying with their obligations under certain provisions being introduced by the Bill. Further, the Tribunal may take into account these guidelines.

For more information, please contact:

Arthur Koumoukelis | Partner | +61 2 8248 3437   | akoumoukelis@tglaw.com.au

Lucinda Smith | Partner | +61 2 9020 5748 | lsmith@tglaw.com.au

Maryna Roganova | Senior Associate | +61 2 8248 5881 | mroganova@tglaw.com.au