How long has this been going on?
The current reform process commenced with the release of the first of four Consultation Regulatory Impact Statements (“CRIS”) in August 2019.
Subsequent CRISs were released in December 2019, March 2020 and June 2021.
These CRISs (as with any State Government CRIS) set out key details and potential impacts of proposed regulatory changes, and sought stakeholder feedback.
What is the DRIS?
The DRIS is the product of feedback collected in response to the CRISs and by other means (including surveys, industry meetings and discussions, and engagement between government agencies).
The DRIS makes 35 recommendations for reform of WA’s retirement village laws, under five categories:
- Information disclosure – improving pre-contractual disclosure requirements, including the way operators provide information to consumers.
- Exit entitlements – making the payment of exit entitlements ‘fairer’ for exiting residents, with the introduction of a 12-month statutory time limit for exit entitlement payments.
- Life in the village – improving consumer protections around village management, financial management, and capital maintenance.
- Village land – changes to Retirement Villages Act ‘memorial’ requirements.
- Village changes – new processes to deal with a range of significant changes to retirement villages, and resolution of associated disputes.
The DRIS is available here
Does this mean the law is changing?
The Retirement Villages Act 1992 (WA), Retirement Villages Regulations 1992 (WA), and the Code of Fair Practice for Retirement Villages prescribed under the Fair Trading Act 2010 (WA) will change.
However, those changes are yet to be drafted. The DRIS contains recommendations, but is not itself draft legislation.
The Department of Mines, Industry Regulation and Safety illustrates the remaining process as follows:
Publication of DRIS >> Consultation >> Drafting of Bill >> Consultation >> Introduction to Parliament >> Commencement of laws >>
(Source: https://www.commerce.wa.gov.au/consumer-protection/retirement-village-law-reforms)
If this is Stage Two of the reforms, what was Stage One?
Significant changes were made to WA’s retirement village laws between 2012 and 2016, following the Statutory Review of Retirement Villages Legislation Final Report, November 2010.
Those changes are what are referred to as the ‘Stage One’ reforms.
What do retirement village owners and operators need to do?
We recommend that you familiarise yourself with the recommendations contained in the DRIS, and start factoring the more significant recommendations into your medium to long term planning.
For example, the proposed 12-month statutory time limit for exit entitlement payments (ie mandatory ‘buy back’ requirement) would apply to all residents, regardless of tenure type. Whereas some village operators already offer guaranteed buy backs, in our experience such arrangements will usually apply only after 2-3 years. And at present, many operators offer no buy backs at all.
The retirement villages legislation is deliberately consumer-centric. But what is good for the consumer can sometimes be a burden for the provider.
Panetta McGrath will closely follow the drafting of the new legislation.
If you have any queries about the legislative changes, or retirement villages generally, please contact David McMullen.
