Mandated buybacks in Victoria on the cards as Minister releases options paper for reforming Retirement Villages Act

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Village operators now have just a month to respond to the latest options paper from the state’s Department of Consumer Affairs, Gaming and Liquor Regulation on the proposed reforms to the Victorian Retirement Villages Act 1986 (Act).

You can read the paper here.

The paper follows the Victorian Government’s commitment to review the ACT back in 2017 and the release of an issues paper in October 2019.

The 88-page paper lists 19 potential reforms for consideration, including:

  • Mandated buybacks for retirement village units not re-sold within a specified timeframe.
  • Amending the RV Act to clarify the definition of a retirement village.
  • Improving disclosure obligations, including requiring all fees to be disclosed in advertising materials.
  • Improving understanding of retirement village payment models by defining ‘deferred management fee’ and introducing yearly contract check-ups on request
  • Reforming the contract process by requiring contracts to be in plain English and introducing a requirement that residents must get legal advice before signing contracts.
  • Amending the Act to clarify all maintenance and repair requirements.
  • Extend the cooling-off period for retirement villages and/or introduce a settling-in period.
  • Amending the timeframe for charging fees to departing village residents for personal services and maintenance charges.
  • Clarifying reinstatement and renovation requirements for RV residents and operators.
  • Regulating the share of capital losses and gains.
  • Enhancing internal dispute resolution procedures, including removing the role of residents’ committees in resident disputes and/or mandating a Code of Conduct.
  • A new mandatory Code of Conduct to spell out the rights and responsibilities of RV operators and residents.
  • Clarifying the arrangements for residents’ committees.
  • Improving staff qualifications with mandatory qualifications for retirement village managers and staff.
  • Developing a compulsory village accreditation scheme.
  • Reforming the external dispute resolution process with mandatory conciliation and the establishment of an Industry Ombudsman.

It is worth reading the paper in full.

The key reform however has to be the issue of mandated buybacks, which already exist in NSW, QLD and SA, while WA is currently reviewing its legislation.

The paper notes concern from operators that mandated buybacks “would present significant financial challenges for operators, particularly for those operating in regional areas.”

Unsurprisingly, residents and advocacy organisations supported their introduction, but the report states there were “mixed views”  about the length of time that should pass before a residence is bought back.

The Minister does indicate that the Government would follow the example of the other States if they take up buybacks.

“Timeframes of six, 12 or 18 months would provide a starting point to further develop this option,” the paper says.

Operators have two options to respond – by responding to the paper or completing a survey.

Find out more here.

Be quick though – submissions close 11.59pm Friday 14 May 2021.

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