Amendments to the Queensland Retirement Villages Act passed
06 Nov 2017
On 25 October 2017, the Housing Legislation (Building Better Futures) Amendment Bill 2017 was passed in the Queensland Parliament.
The new legislation significantly amends the Retirement Villages Act 1999 (RV Act) with major changes affecting the Retirement Village Industry and operators. We will notify you of the date of commencement of the Amended Act (Commencement) as soon as it is announced.
This is a brief summary of those changes.
1. Village Comparison Document (VCD) – replaces the Public Information Document (PID)
- All operators of registered villages prior to the Commencement must prepare a VCD
- The VCD is to be published on the Scheme’s website (every operator must maintain a website) and be included in any promotional material
The VCD provides information about the Scheme to potential residents including:
- types of accommodation, facilities and services; and
- amounts payable by or to residents or the operator.
PIDs in effect before the Commencement will continue in effect for residence contracts in force before the Commencement.
2. New Prospective Costs Document for the Residence Contract – provides a summary to prospective residents of the estimated costs of moving in, living in and leaving the Village.
3. New Unit Condition Reports: Start of Residency/End of Residency - a new process for operators and residents to complete condition reports on units at both commencement and termination of residence contracts.
4. Residence Contract – operators must not enter into a residence contract until 21 days after the operator has given the prospective resident the residence contract, VCD and Prospective Costs Document.
However, there is an exception. A prospective resident may sign a residence contract less than 21 days after receiving the documents if they have signed a waiver stating they have received legal advice from a lawyer about entering into the contract.
It is imperative that operators comply with this 21 day waiting period rule, otherwise a resident may apply for a QCAT order to set aside their residence contract. The resident has to show they have been materially prejudiced.
Despite the above amendments, the cooling-off provisions in their current form remain available to residents to rescind residence contracts.
5. Exit Entitlement – operators are required to pay residents their exit entitlement 18 months after the residence contract is terminated, unless to do so would cause the operator undue hardship. This change will apply to new and existing residence contracts ie where a resident has already left the village the 18 month period for payment of the exit entitlement will start from the date of commencement of the Amended Act.
An operator must pay the exit entitlement at the end of the 18 month period and if the parties do not agree on the resale value, the operator must obtain a valuation not more than 14 days before the payment date.
An operator may obtain an order fixing a later date to pay the exit entitlement (or to pay by instalments), if QCAT is satisfied:
- operator is unlikely to sell the unit prior to the end of the 18 month period;
- operator is likely to suffer financial hardship; and
- order would not be unfair to the former resident (QCAT may have regard to submissions from the former resident)
6. New unit reinstatement and unit renovation processes
If the resident does not leave the unit in the same condition (except for fair wear and tear and agreed renovations) as when they entered the unit, the operator may carry out reinstatement work and claim the cost from the resident. A new definition of “reinstatement work” in the amended Act establishes the “same condition” test.
There appears to be no restriction on the operator and resident agreeing on entry that any reinstatement costs will be deducted from the exit entitlement.
The operator and former resident must agree on the date when renovation work to the unit will be completed. The cost of the work is paid by the parties in the same proportion they share in any capital gain on the sale of the unit. The definition of “renovation work” is replacement and repairs other than reinstatement work.
If the operator fails to complete the renovation work by the agreed date, the former resident may obtain a QCAT order that the operator pay the exit entitlement. The former resident has to show they were materially prejudiced by the failure.
These new processes do not apply for residence contracts in force before the Commencement.
7. New unit valuation requirements
The operator and resident can now make submissions (and respond to each other’s submissions) about the valuation of the resale value of the unit to the valuer. It also sets out other matters the valuer must have regard to in conducting the valuation and gives the valuer the power to request information from the operator about the Village, the unit or the residence contract.
8. Requirements on operators for redevelopment/closure of a Village
Before an operator commences the redevelopment or closure of a Village, the operator must obtain approval for their redevelopment/closure plan:
- by special resolution at a residents meeting (the meeting notice must contain certain disclosure requirements); or
- if approval is not obtained at the residents meeting, by application to the Department of Housing and Public Works (the Department).
The Department must give the residents notice of the application and have regard to any submissions from residents.
The Department may approve a plan only if it is satisfied the plan provides for a clear, orderly and fair process for redevelopment/closure. The Department must within 90 days of receipt of the application approve the plan or give the operator a direction to take action to revise the plan, but before doing so:
- the Department must give the operator the reasons for the proposed action to revise the plan; and
- the operator has an opportunity to make submissions about the Department’s proposed action.
After the plan is approved, the Department on application of the operator or its own initiative may give the operator a direction to take action to revise the approved plan, but once again before doing so must give the operator reasons to which the operator has an opportunity to respond.
The redevelopment requirements set out above do not apply if all residents were given notice of the proposal to redevelop before they became a resident.
9. Requirements on operators for transfer/sale of a Village
An operator must give the Department notice of a proposed transfer of control of a Village’s operation and obtain the approval of a transition plan.
The Department may approve a plan only if it is satisfied the plan provides for a clear, orderly and fair process for transitioning control of the Village’s operation. A similar process for a transfer/sale plan as the redevelopment/closure process set out below applies, ie:
- the Department must within 90 days of receipt approve the plan or direct the operator to revise the plan, but before doing so must give the operator reasons and the operator has a chance to respond.
- the Department can give a copy of the plan to a person whom it considers has an interest in the transfer/sale and consider submissions from that person.
As with redevelopment/closure, once the plan is approved, the Department may still direct the operator to revise the approved plan and this can be at the operator’s request or on the Department’s own initiative.
10. New behaviour standards for operators and residents - the Amended Act contains a new Part which prescribes behaviour standards for residents and operators (and their staff), including:
- an operator must take reasonable steps to ensure a resident does not interfere with the reasonable privacy of another resident.
- an operator must give a written response within 21 days of receiving a written complaint, proposal or question from a resident or former resident (or their representative).
11. New Approved Forms – the Amended Act proposes that the Department will issue approved forms for use by operators for the following documents:
- Village Comparison Document
- Prospective Costs Document
- Unit Condition Reports
- Residence Contract
- Waiver - for the 21 day waiting period before entering the residence contract
- Residents Meeting Notices for redevelopment/closure of a Village
- Redevelopment Plan
- Proposed Village Closure Notice
- Closure Plan
- Proposed Transfer of Village’s Operation Notice
- Transition Plan – for transfer of village’s operation
- Notices of Discontinuation of Village Redevelopment/Closure/Transfer
- Maintenance Reserve Fund Budget
- Capital Replacement Fund Budget
- General Services Charges Budget
- Quarterly/Annual Financial Statements
If you have any queries related to the content of this article, please contact us.
This article is for information purposes only and should not be taken as legal advice.