Following a five year review, the Government has announced its intention to modernise the Retirement Villages Act 2003 and create a fairer balance between residents and village operators. The review was first called for by the Retirement Commission in 2020 after it published a white paper on retirement villages for which it received submissions.
The review addresses the three phases of village life – moving in, living in and moving out of retirement villages.
With regard to the moving in phase, villages will be required to:
- Improve transparency and disclosure by making legal documents more user-friendly and accessible, by publishing disclosure documents online and ensuring information is not misleading or deceptive
- Abstain from unfair contractual practices
While in residence,
- Operators will be responsible for the repair, maintenance and replacement of chattels they own
- A new, user friendly and independent dispute resolution service will be put in place to simplify and stream line dispute processes
On moving out, there will be much fairer processes:
- Operators will be required to pay residents the money they are owed for the sale of their unit (less deductions) within a 12 month statutory timeframe, with interest payable after 6 months. On application, residents with specific needs, such as those moving into aged care, will be allowed an early release of funds.
- Weekly fees and deductions will stop accruing immediately after a resident vacates their unit.
These are welcome changes that have come about through active lobbying by residents’ associations and the Retirement Commission. There is ever increasing demand for retirement village units which has contributed to the imbalance of power between residents and village operators. The amended bill is expected to be introduced to Parliament in mid-2026.
However, the new rules will not apply in their entirety to residents already living in retirement villages. The new repayment rules will only apply to contracts entered into one year after the law has changed. This means that people living in the same retirement village will have different rules applying to them depending on when they first moved in.
