An important update to this story from two weeks ago.

We indicated new Victorian buyback regulations are for all villages.

Andrew Philip, the Managing Director of Retirement Communities Australia, who is on the industry subcommittee, pointed out to us that the Options Paper released by the Department of Consumer Affairs, Gaming and Liquor Regulation only raises the issue of potential buybacks for owner-residents i.e. those in strata title villages and not non-owner-residents i.e. those in loan-lease or loan-license villages.

However, this is not made particularly clear in the paper.

Andrew suggested that this could be a misunderstanding or a mistake by Department staff so we sought clarification with Consumer Affairs.

They have confirmed that six-month buybacks have been in place in Victoria (since 2003 out of interest regardless of whether the unit has been sold or not).

Lawrie Robertson, the President of the Residents of Retirement Villages Victoria (RRVV), tells us however that in 2006, operators were given a ‘get out clause’ so to speak.

If a village contract gives the resident the right to set their own selling price – and appoint their own selling agent – then the six-month buybacks do not apply.

So, it will be interesting to see if the State Government does choose to extend the buyback option to strata title owners.

We understand it would be difficult to put in place as it would be contrary to the current owners corporation legislation (applicable to strata title dwellings) in Victoria.

The option wasn’t even raised in the earlier Issues Paper released by the Department.

So, why was it introduced in the Options Paper?

The measure would however bring Victoria more into line with other states such as NSW and Queensland which have taken a tougher stance with their buybacks.

“Victoria has always had a more commercial approach to re-sales compared to other states, i.e., more akin to normal residential property sale processes,” Andrew states.

“In Victoria, the regulations have logically linked the right to set unit selling prices with the responsibility for the risk of delayed selling timeframes. Those wishing to set higher prices for their unit must (under Vic Regs) be prepared to wait the potentially longer time taken to achieve a sale at that higher price.”

“This is commercial and fair compared to other State regulatory regimes where an operator can be required to pay out a resident before their unit has resold and in circumstances where the resident has continuing full authority to set the selling price (reasonable or not). That approach is unfair, uncommercial and places a ridiculous financial burden on the operator.”

Either way, the lack of clarity in the paper suggests the Department itself is struggling with its own understanding of the issue.

Consultation on the Options Paper closes at 11:59pm on Friday, 14 May.