Page 1736 - Week 06 - Tuesday, 7 June 2016
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The bill is intended to provide clarity around a number of issues identified in the review process as causing concern and misinterpretation. It is fair to say that the changes in large measure improve the rights of residents in retirement villages. I do not propose to go through all that the legislation is intended to address. It does cover a wide number of issues arising from the original act that needed clarification.
As I said, to a large extent, this bill does address, prescribe and interpret a number of activities associated with the orderly conduct, operation and management of retirement villages. To highlight some issues, this legislation addresses a requirement that a retirement village’s prospectus include details about operational arrangements such as exit fees, deferred management fees and departure fees; and the difference between a retirement village and an aged care facility.
However, there is one inclusion that has caused consternation. That is regulation 24A, designed to clarify what is and what is not capital maintenance, and it has caused some concern. Regulation 24A and clauses 30 and 31 were intended to provide clarity around definitions of capital maintenance and capital items. The definition of capital maintenance is important because it is funded from recurrent charges. It also clarifies operational activities and responsibilities for both residents and operators.
Regulation 24A prescribes as capital maintenance a number of item categories which involve the replacement of capital items. Capital items are everything used in a retirement village that is not owned by a resident. The operator must generally fund from his own resources the cost of replacing a capital item, and the operator can also generally fund the maintenance and repair of capital items from funds supplied by residents through the recurrent account and capital works fund.
Let me just say that we are very fortunate that in the territory we have a number of very well-educated and very well-informed citizens who take a great interest and a great pride in how the territory works. They take the time and trouble to not take at face value what governments choose to put to them. Such concern is seen every week in groups like the numerous community councils, residents groups and business associations and, indeed, the Retirement Villages Residents Association. So it was that a group of retirement village residents provided such scrutiny of this piece of legislation. A number of retirement village residents, and then later the Retirement Villages Residents Association, started to express concern that the changes to the definition outlined in regulation 24A could impose unfair financial burdens on them and move the financial onus for certain items from the operator to residents as part of their maintenance obligations.
It is true that most of the amendments in this bill reflect the outcomes of the review process I mentioned earlier and are of benefit to the residents. It is also true that there initially was consensus amongst all the stakeholders. However, subsequent discussion within the Retirement Villages Residents Association has seen some differing views, and it is obvious that the minister is unable to resolve them amicably. I cannot say whether it is because the consultation and review process was not thorough enough or because insufficient time was given to examination of the various clauses and impacts it had on the original legislation. What we do know is that there are now differing views as to the intent of regulation 24A.
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