Background – This has been a long time coming
The Retirement Villages Amendment Bill 2024 (WA) passed through WA Parliament on on 5 November 2024. A significant reform to the retirement villages legislation in this state, the Bill (now Act) builds on past reforms such as those made between 2012 and 2016, following the Statutory Review of Retirement Villages Legislation Final Report, November 2010.
The full text of the Amendment Act is available here.
Key Changes under the Amendment Act
The Amendment Acs introduces significant changes to the Retirement Villages Act 1992 (WA), including:
- Disclosure Requirements:
- Earlier and clearer disclosure of the type of tenure offered, available facilities and services, and costs associated with entering, living in, and leaving a village.
- A new community arrangement statement, summarizing key information about the village.
- A new prospective resident information statement, providing detailed upfront disclosure.
- Payment of Exit Entitlements
- Operators will be required to pay exit entitlements within 12 months of a resident permanently vacating (where an earlier date doesn’t apply). Extensions of time may be sought from the Commissioner of Consumer Protection in certain circumstances.
- This applies to lease-for-life, strata title, and purple title village arrangements.
- These reforms are what are commonly referred to as ‘mandatory buy-backs’. Fortunately for operators, there will be a transition period of a further 12 months following commencement of the relevant Amendment Act provisions.
- Contributions to Aged Care Costs:
- Residents moving into aged care can request advanced payment of the exit entitlement, in the form of contribution towards their aged care fees.
- Refurbishment and Renovation
- Clear distinctions between reinstatement (restoring to original condition) and renovation (upgrades or improvements).
- Operators can only require residents to contribute to renovation costs to the extent they are also entitled to a proportionate share of any capital gain.
- Mandatory property condition reports at the start and end of occupation.
- Maintenance and Capital Works Plans:
- Operators must prepare capital works plans and establish a capital maintenance fund exclusively for maintenance, not capital replacements.
- Significant Village Modifications and Wind-Downs:
- Prescriptive processes requiring resident consultation, a special resolution of residents, and in some cases, approval by the State Administrative Tribunal for significant changes or winding down a village.
- Retirement Village Memorials:
- New processes and enhanced powers for the State Administrative Tribunal to deal with village memorial amendments.
- New Offences (Including Personal Liability for Officers):
- Additional offences, including provision for officers of owner/operators to potentially face personal criminal liability if they fail to take reasonable steps to prevent the offences.
- “Officers” include not only directors; but also secretaries, and other individuals with decision-making or financial influence.
So, are the reforms all complete now?
Not exactly.
Parts of the Amendment Act have now commenced – but these are only provisions of a preliminary or ancillary nature.[1] The main changes contained in the Amendment Act will commence on a date still to be proclaimed.
Accompanying regulations also still need to be drafted. Consumer Protection has indicated that these regulations will be subject to targeted consultation with key industry stakeholders. New disclosure documents and guidance materials are also being developed.
The reforms are therefore expected to commence in the second half of 2025, from which point there will be a transition period.
At Panetta McGrath, we have been following the reforms for some time:
- Update: WA Retirement Village Law Reforms (June 2020)
- Retirement Village Law Reforms: Getting There One Paper at a Time (August 2022)
We will continue to do so, as the Amendment Act is assented to; and the new Regulations, disclosure documents and other materials are released.
If you need assistance with the retirement village reforms, or any other aspects of the retirement villages legislation or the operations of a village, please contact David McMullen.
[1] Amendment Act Pt. 1: 13 Nov 2024 (see s. 2(a)); Pt. 2 (but only Div. 2) & Pt. 4: 14 Nov 2024 (see s. 2(b)).
