The retirement village industry plays an important role in providing for the housing needs of seniors and retirement villages are becoming increasingly popular for their low maintenance lifestyle and ability to provide a safe secure environment and a sense of community for their residents.
The operation of retirement villages is a heavily regulated industry and is tightly governed by two principal pieces of legislation, the Retirement Villages Act (NSW) 1999 (as amended) and the Retirement Villages Regulation (NSW) 2017 (as amended). Since their inception there have been numerous changes, most notably, the increase of statutory obligations on Operators of Retirement Villages.
The legislative framework is designed to increase transparency in particular for residents with regard to costs and to ensure residents understand their rights and financial obligations upon entering into a village contract.
These regulatory requirements impose duties and obligations of disclosure on Operators by prescribing the information that must be provided to prospective residents and the timing of its provision. Operators must understand and fulfil their legal obligations to avoid harsh penalties.
By law, Operators must provide the following documents to prospective residents.
General Enquiry Document
A general enquiry document must be provided to all prospective residents or person acting on their behalf, within 14 days of their making an initial enquiry about becoming a resident.
The general enquiry document must be in the form set out in Schedule 1 of the Regulations and include a copy of the village rules and a copy of the document "Moving into a retirement village" published by NSW Fair Trading. This document provides general information about the retirement village and its associated costs.
Disclosure Statement
The disclosure statement must be provided to the prospective resident or person acting on their behalf within 14 days of the resident expressing an interest in a residence or upon request.
Contracts cannot be entered into until 14 days after the provision of a disclosure statement.
The disclosure statement must also be in the form prescribed by the Regulations and must also include the village rules and specific financial information including but not limited to a standard table of fees and an "average resident comparison figure".
Where there is any inconsistency between the village contract and the disclosure statement and that inconsistency is to the detriment of the resident, the disclosure statement will generally prevail. Therefore, particular consideration and care must be given when drafting the relevant documents.
Standard Village Contract
Operators need to be aware that there is a standard form of contract which is prescribed by the Regulations and must form part of all village contracts (subject to a few exceptions). Additional conditions can be included however they must not be inconsistent with the standard terms.
Documents required to be made available
Operators must also make certain documents available for inspection by prospective residents or persons acting on their behalf. These documents include but are not limited to; budgets, annual accounts, village contracts, site plans, asset management plans, capital maintenance reports, the waiting list policy, safety inspection reports, insurance policy documents and certificates of insurance. These documents must also be provided within 7 days upon request.
This is but a small snapshot of the obligations an Operator is required to fulfil. Given the complexity of the legislative framework surrounding Retirement Villages, we recommend seeking professional advice.
Coleman Greig Lawyers can provide specific and tailored advice to retirement village operators in the development and operational stages to ensure they fully comply with the Retirement Village Laws.
Coleman Greig Lawyers can also provide professional advice to prospective residents to ensure they fully understand their rights, financial commitments and other obligations under the retirement village contract and its governing legislation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.