This article is from the Australian Property Journal archive
THE Western Australian government is introducing reforms to retirement village laws to make the process fairer for seniors across the state.
The amendments to the Retirement Villages Act 1992 will aimed to make entering, living and leaving a village more straight forward, while also supporting the long term future of the industry.
“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,” said Roger Cook, minister of commerce.
“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.”
Village operators will now be required to clearly and accurately describe the product from beginning of the advertising and sales process, listing amenities, services and type of tenure.
Details of contracts will now be provided to prospective residents earlier on in the process, allowing for more accurate comparisons ahead of making a commitment, while also ensuring any commitments made are fully understood by customers.
A public data based managed by Consumer Protection will be established to provide customers and their families with basic information about the state’s villages.
The reforms have also identified an ongoing issue where village residents under current laws can be left waiting several years before receiving exit entitlements.
“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,” added Cook.
A maximum time limit of 12 months will now be enshrined for operators to pay these exit entitlements, with the Western Australian Treasury Corporation being commissioned to conduct consultation on the financial impact of this change on the industry.
“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,” said Cook.
The consultation arrived at the one year period and also recommend a transition period of a further 12 months to help operators manage the impact on their cash flow.
However residents who are moving into aged care prior to receiving their exit entitlement will, upon request, have their daily accommodation paid for by the operator and deducted from their remaining exit entitlement.
“It’s important that the industry remains financially viable. We believe that we have got the balance right by including a transition period,” added Cook.
A new consultation and management process between residents and operators will also be introduced to manage large changes occurring in a village, enabling necessary upgrades while also protecting resident contractual rights.
“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,” said Don Punch, minister for seniors and ageing.
Further consultation is also set to take place prior to the new legislation being introduced to parliament.
“These reforms will protect the rights of seniors and ensure they can have confidence when making decisions about their present and future housing needs,” concluded Punch.
