A revamp of laws regulating retirement villages in Western Australia is planned with the McGowan Government aiming to make the process of entering, living in and leaving a village fairer and easier for seniors, while supporting the industry’s longer term viability.
Major amendments to the Retirement Villages Act 1992 being proposed address issues that have arisen between operators and future, current and past residents and their families.
From the start of the retirement villa advertising and sales process, operators will be required to clearly and accurately describe the product, including detailing the amenities, services and type of tenure.
Key details of village contracts will be provided earlier so prospective residents can make accurate comparisons and understand the commitments they are making. Supporting this will be the establishment of a publicly available database managed by Consumer Protection that will provide basic information about retirement villages in WA.
Major disputes can arise between residents, their families and the retirement village operator when the resident wants, or needs to leave the village. A maximum time limit of 12 months will be placed on the operator to pay exit entitlements to the resident after they leave. Currently, in some cases, former retirement village residents can wait several years before receiving exit entitlements, often causing distress and financial hardship.
To assess the financial impact the exit entitlement reform will have on the industry, the Western Australian Treasury Corporation was commissioned to conduct extensive industry consultation, analysis and modelling. The results were taken into consideration when setting the 12-month time limit, and in also recommending a transition period to assist operators to manage the impact on their cash flow.
Reform recommendations arising from the consultation process are contained in a Decision Regulatory Impact Statement (D-RIS) now available for viewing on the . The WATC financial modelling has also been published with the D-RIS.
Further consultation will occur on the implementation with key stakeholders before the new legislation is introduced into State Parliament.
Operators will essentially have 24 months to adapt to the new laws once they pass through Parliament. Operators will then be provided with a 12-month transition period to prepare for the new exit entitlement requirements. After which, the resident will wait a maximum of 12 months from departing a village to receive their exit entitlements.
For residents who are moving to aged care before they receive their exit entitlement, if a resident requests, the operator will pay their daily accommodation payment under the proposed rules. These payments will then be deducted from the balance of the resident’s exit entitlement.
The new laws will also clarify obligations around operator and resident behaviour, dispute resolution processes and capital works plans and reserve fund levels that ensure adequate money is set aside for village upkeep.
A new, clearer process will be introduced to manage significant changes which need to occur in a village, providing a fair consultation and management process for both village residents and operators. This will allow operators to make changes necessary to upgrade village amenities and ensure ongoing viability, while protecting residents’ contractual rights.
A four-stage wide-ranging public and industry consultation period began in December 2019 with a total of 156 submissions and 283 survey responses received by Consumer Protection. A survey and several workshops were also conducted to get community and industry feedback.
A community education campaign focusing on retirement villages, residents, industry peak bodies and independent operators will occur when the new laws come into effect.
The campaign will highlight the rights and responsibilities of both operators and residents under the new laws. It will also focus on educating the stakeholders about the need to plan for key transitional dates, such as when the new laws for payment of exit entitlements come into effect.
As stated by Commerce Minister Roger Cook:
“With an estimated 25,500 residents living in about 300 retirement villages in WA, it was essential that we canvassed all issues related to retirement village living from start to finish.
“The extensive review of retirement village laws put a microscope over the process, from when seniors decide to enter into a retirement village contract, issues that arise while living in a village and some of the difficulties experienced by residents when it’s time to leave, or by families when the resident passes away.
“A crucial change will come with regard to the contentious issue of exit entitlements. We understand the stress that former retirement village residents have experienced by waiting for their exit entitlements for an extended period, especially when the payments are urgently needed to fund alternative independent living or aged care. We hope these proposed changes will avoid those unfortunate situations.
“We also hope that introducing time-limits gives residents greater certainty and confidence in buying into a retirement village, that they know they will be able to access their exit entitlements within a reasonable timeframe.
“It’s important that the industry remains financially viable. We believe that we have got the balance right by including a transition period.”
As stated by Seniors and Ageing Minister Don Punch:
“Retirement villages are a valued housing option for so many WA seniors, providing secure and independent accommodation in a community setting.
“The reforms follow extensive public and industry consultation, will make entering, living in and exiting a village fairer and simpler for seniors and provide greater transparency as to the financial and contractual implications of doing so.
“These reforms will protect the rights of seniors and ensure they can have confidence when making decisions about their present and future housing needs.”
