Page 1738 - Week 06 - Tuesday, 7 June 2016
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The bill proposes amendments to require the general inquiry document and disclosure statement for a retirement village to include information about the difference between retirement villages and aged-care facilities. The general inquiry document and disclosure statement will also need to include additional information for residents and prospective residents about any departure fees provided for in the village contract and information about the operator’s policy, if any, on access by residents to home care services. This will give prospective residents and their families access to more comprehensive information about the village.
The bill amends the act to allow operators to enter into more binding deposit arrangements with prospective residents to ameliorate financial loss to operators and make the retirement village industry more consistent with other property industries.
As I said during introduction of the bill, the act presently requires a holding deposit to be held in trust until either the prospective resident enters into a residence contract with the operator or the operator receives written notice that the prospective resident does not intend to enter into a residence contract or has died. If the prospective resident enters into a residence contract with the operator, both parties may agree that the amount paid as a holding deposit may form part of the deposit under the contract.
The bill proposes amendments to the act so that if contracts have been entered into but the prospective resident does not move into the premises the operator is allowed to retain some of the holding deposit to cover reasonable costs incurred in leaving the premises empty, such as legal fees, marketing costs and recurrent charges. Reasonable costs cannot exceed an amount specified by regulation or $10,000. The operator would only be able to retain funds from the holding deposit if contracts have been entered into and the contract is rescinded after the seven-day cooling-off period.
This is similar to the exchange of contracts in the sale of residential property. However, it is important to note that under the proposed amendments the operator cannot retain funds if the prospective resident has died or is entering into residential aged care.
The bill proposes additional measures to assist residents and operators to resolve disputes. The bill proposes a new internal disputes committee for villages similar to the process from the former Fair Trading (Retirement Villages Industry) Code of Practice 1999. The disputes committee will consist of a member appointed by residents, a member appointed by the operator, and an independent chair. This is an optional process. Residents and operators would still be able to apply to the ACT Civil and Administrative Tribunal 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 presently makes separate provision for resident consent to proposed budget spending and increases in the recurrent charges that residents pay under their village contracts, there is some significant overlap.
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