Retirement Living Alert: Changes to the Retirement Villages Act 1999 (NSW) from 1 July 2019

28 February 2019


The Retirement Villages Amendment Act 2018 (NSW) (Amendment Act) introduced a number of changes to the Retirement Villages Act 1999 (NSW) (Act). On 15 February, a number of sections of the reforms were proclaimed to commence on 1 July 2019. This follows an earlier proclamation made on 11 February in relation to the other sections in the Amendment Act. Sections relating to an asset management plan in villages still remain to be proclaimed.

Our summary of the sections proclaimed to commence on 11 February 2019 is available here.

On 1 July 2019, the remaining sections of the Amendment Act will commence.

The only sections of the Amendment Act remaining to be proclaimed relate to the requirements to prepare and maintain an asset management plan and the respective penalty notice offence.

We have summarised the changes to the Act coming into effect from 1 July 2019 below.

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 will also be 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 must be provided with a written summary of that explanation at the meeting. Operators will have 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.

Consent for appointment of auditors

New Subdivision 1 (Auditing of accounts) will be added to 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.

From 1 July 2019, 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 outlines 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, unless the residents agree to appoint the auditor for a longer period (up to three years).

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, they must notify the operator in writing and nominate an alternative auditor. 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.

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 commencing from 1 July 2019. Further, the Tribunal may take into account these guidelines to decide whether or not the operator has complied with the new provisions.

New penalty notice offences

New penalty notice offences for non-compliance with certain new provisions being introduced by the Amendment Act, will commence from 1 July 2019.

Further information will follow on material developments.

For more information, please contact:

Arthur Koumoukelis | Partner | +61 2 8248 3437 |

Lucinda Smith | Partner | +61 2 9020 5748 |

Maryna Roganova | Senior Associate | +61 2 8248 5881 |