Page 1381 - Week 05 - Tuesday, 3 May 2016
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video
The bill proposes a new internal disputes committee to resolve disputes between residents and operators, similar to the process from the former Fair Trading (Retirement Villages Industry) Code of Practice 1999. The act currently provides for resolution of disputes by the ACT Civil and Administrative Tribunal. Submissions received during public consultation indicated a need for a less formal alternative to the ACAT process to resolve relatively minor issues. The disputes committee will consist of a member appointed by residents, a member appointed by the operator and an independent chair. This would be an optional process to provide another option to operators and residents. They would still be able to apply to ACAT for dispute resolution in the first instance or to arrange external mediation of the dispute.
The financial management of retirement villages was a significant issue in the review. In particular, a number of submissions raised issues of consent to village budget spending and the amendment of recurrent charges. While the act contains separate provisions for resident consent to proposed budget spending and increases in the recurrent charges that residents pay under their village contracts, there is some overlap in these provisions. Resident consent is not required for proposed budget spending or increases in recurrent charges if the charges are varied according to a fixed formula. If recurrent charges are not varied according to a fixed formula, resident consent is still not required if the increase does not exceed the consumer price index.
Public consultation on the review indicated a need to clarify the difference between consent to changes to recurrent charges and consent to proposed budget spending. Feedback from stakeholders representing residents and operators indicated that the use of CPI to measure increases in recurrent charges has been problematic.
The bill proposes amendments to the act to remove the CPI provisions. Resident consent will be required for all increases that are not made by fixed formula. The bill also requires residents to consent separately to proposed budget spending. These amendments give residents greater opportunity to provide input to amendments in their recurrent charges and to participate in the financial management of their village.
During the review, stakeholders raised practical concerns about the requirement for operators to provide residents with a copy of the proposed annual budget at least 60 days before the beginning of the financial year to which the budget relates. The bill proposes amendments to allow an operator and residents to agree to change the time frame for the village budget. The time frame cannot be shorter than 30 days.
The act provides that in the event of a surplus in the annual accounts of a village, the residents may consent to the operator distributing all or part of the surplus to the existing residents in equal shares. Consultation during the review suggested that this provision be amended for reasons of fairness, as residents often do not pay equal amounts of recurrent charges and sometimes recurrent charges may be paid by the operator. The bill proposes amendments to the act to provide that distribution is made to existing residents and the operator in the same proportion as their actual contribution to the surplus.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video