On 14 August 2012, Simon O’Brien, the Minister for Commerce, tabled the Retirement Villages Amendment Bill 2012 for Western Australia.

You can access the Bill here.

The Minister said the Retirement Villages Amendment Bill 2012 signalled the beginning of the State Government’s program of major reform of retirement village laws.

Key proposals

The key proposals contained in the Bill include the following:

• Residence contracts may be required to contain or to not contain provisions concerning certain matters, if prescribed under the Regulations (new section 14A).

• If a dispute arises as to a residence contract’s compliance with the new section 14A requirements, section 55 of the Bill allows either party, or the Commissioner, to make an application in relation to the matter to the State Administrative Tribunal. 

• If an order is made in respect of the application, and the Tribunal is of the opinion that order is relevant to other residence contracts (in that village or any other), it may request documents from other administering bodies or order that other administrative body to be joined to the proceedings (section 55(2)).  A similar provision has been inserted in respect of service contracts (section 56(3)).

• The liability of a former resident to pay recurrent charges following permanent vacation from a retirement village will be limited under the Regulations if that resident did not co-own land in the village or own a strata lot (section 23).  While the Regulations have not been promulgated, it is anticipated that the liability will be limited to a period of six months for current contracts and six months for future contracts.  This may be contrasted with NSW where the period is 42 days for particular classes of resident.

• A new Part 5A has been inserted which allows the State Administrative Tribunal to appoint a ‘statutory manager’ on application by the Commissioner, to perform some or all of the functions of an administrative body.  Such a manager may only be appointed where the financial wellbeing of residents is at risk, or the administrative body has contravened an order of the Tribunal or the Retirement Villages Act.

• Certain persons are no longer allowed to be involved in the administration of retirement villages, including people who are or have been bankrupt, insolvent or convicted of certain offences within a period of five years following that conviction or insolvency event (section 76). 

Additional proposals

• The period which a resident is required to be provided with certain documents prior to entering into a residence contract is to be increased from five to ten working days (section 13(2)).

• An administrative body cannot charge for providing documents required to be given to residents under section 13(2) (section 13(4A)).

• The cooling off period under section 14 is to be extended:

- from 5 to 7 working days, where prescribed documents are provided within the stipulated timeframe; and

- from 10 to 17 working days where prescribed documents are not provided within the stipulated timeframe.

• It will be an offence if a premium held by an administering body is not held in trust or invested as required, unless that administering body holds an exemption from this requirement (section 18).

• Where a resident is liable to pay recurrent charges following their departure from a village, the resident may elect for that amount to be deducted from the premium repayable to that former resident.  If the resident elects to do this and the effect is to defer payment of those charges, the administering body may charge interest on that deferred amount (section 24).

• Residents have been given power to apply to the State Administrative Tribunal in respect of a dispute with an administering body regarding an increase in recurrent charges or the imposition of a levy, provided that the residents authorise the application by special resolution (section 57A).

• The limitation period for bringing proceedings for offences committed against the Retirement Villages Act is increased from two to three years (section 80).

• Please contact Gadens if you require assistance to assess the impact of the Bill on your village operations.