Retirement villages legislation changes

The Housing Legislation Amendment Act 2021 was passed by Parliament on 14 October 2021 and assented on 20 October 2021.

This legislation includes changes to the Retirement Villages Act 1999, which implement the recommendations in the review panel’s Interim Report from the Independent Review of timeframes for exit payments in Queensland retirement villages.

These changes exempt resident-operated freehold retirement villages from buying back a freehold retirement village unit 18 months after the resident has permanently left the retirement village.

A retirement village may be exempt from the mandatory buyback requirements when:

• the village’s residence contracts are based on a freehold interest
• the residents have a certain level of control or influence over the operator’s affairs
• the operator’s assets and ability to earn income aren’t enough to buy a former resident’s accommodation unit.

Other matters considered in a retirement village exemption include:

• whether retirement village land is included in a community titles scheme
• the operator’s level of involvement in refurbishing, reinstating, renovating or selling former residents’ accommodation units
• how much profit the operator makes from fees or charges paid by residents, and whether the operator receives money when an accommodation unit is sold.

After a retirement village is considered exempt in a regulation, it’s also exempt from having to purchase an unsold freehold unit. However, this process isn’t automatic – retirement villages need to apply for exemption.

Buyback requirements continue to apply until the exemption is granted. However, operators can apply to the Queensland Civil and Administrative Tribunal (QCAT) for an extension if they’re experiencing financial hardship due to upcoming buybacks.

Next steps

The Queensland Housing and Homelessness Plan 2021–2025 includes commitments to implement the Queensland Government’s response to the panel’s review of timeframes for paying resident exit entitlements and buyback requirements.

The Housing Legislation (Building Better Futures) Amendment Act 2017 was passed by Parliament on 25 October 2017 and assented on 10 November 2017.

This legislation contains amendments to the Retirement Villages Act 1999 that:

• strengthen the regulatory framework for retirement villages
• improve consumer protections for prospective and current residents of retirement villages.

What’s changed?

Changes to the Retirement Village Act ensure that operators provide more information to prospective and current residents.

In February 2019, we introduced:

• an improved 2-stage, 21-day, pre-contractual disclosure process for prospective residents to easily obtain information earlier, and seek financial and legal advice
• a new Village Comparison Document and Prospective Costs Document – replacing the Public Information Document (PID) – for prospective residents to easily compare villages and know the costs of entering, living in and leaving a village
• increased access to village operational documents for residents and prospective residents
• a clearer and more predictable process for reinstating or renovating a unit, supported by entry and exit condition reports
• an improved process for a resident and operator to agree on the resale value of a unit.

From November 2019

Final amendments to the Retirement Villages Act commenced in November 2019. These changes introduced:

• a new process and plans for a village closure, redevelopment or transition to a new operator
• the power to initiate more standardised residence contracts
• the power to initiate standardised requirements for retirement village financial statements and budgets
• a requirement for operators to create a separate fund for general services charges
• tighter restrictions on increases to the total general services charge.

The Retirement Villages Regulation will be amended to implement these changes in stages through to 2024.

In 2019, regulation amendments outlined the content and types of information that operators must include in plans for village closure, redevelopment or transition to a new operator.

We are consulting with residents, seniors and industry groups to develop regulation amendments for standardised residence contracts and requirements for financial statements and budgets.

The Health and Other Legislation Amendment Act 2019 was passed by the Queensland Parliament on 3 April 2019. This legislation contains amendments to the Retirement Villages Act 1999, which commenced on 11 April 2019.

These amendments:

• improve consumer protection for retirement village residents who hold a freehold interest of their unit
• give residents in freehold units certainty about the maximum time they have to wait to receive their funds after they terminate their right to reside
• require the village operator to buy the unsold freehold unit, within a specific time frame, by entering into a contract with the former resident.

What’s changed?

The village operator must:

• enter into a contract to purchase the former resident’s freehold property in certain conditions
• complete the purchase within a specific time frame.

The Retirement Villages Act outlines how a resident can terminate their right to reside. This includes giving 1 month’s written notice to the village operator.

If the resident doesn’t terminate their right to reside in a freehold unit, the village operator isn’t required to purchase the unit.

The mandatory purchase provisions also apply where a former resident terminated their right to reside before the provisions started, but their freehold interest remains unsold. The village operator must complete the purchase of these units by either:

• 23 May 2019 (i.e. 6 weeks after proclamation of the Health and Other Legislation Amendment Act)
• the date that is 18 months after the termination date.

An operator may apply to the Queensland Civil and Administrative Tribunal for an extension of time to purchase the unit if the purchase will cause them financial hardship. They can continue to market the unit for sale to an incoming resident during an approved extension.

Read more exit entitlement information for residents and for operators.

The Housing Legislation Amendment Act 2023 was passed by the Queensland Parliament on 28 March 2023 and assented on 5 April 2023. This legislation contains amendments to the Retirement Villages Act 1999 (RV Act).

These amendments aim to maintain public confidence in Queensland’s retirement village industry by:

• increasing consumer protections
• requiring more transparent, accountable and consistent financial reporting in retirement villages.

The amendments:

• create a new regulation-making power for financial documents
• clarify and strengthen existing financial reporting provisions, including new penalties for non-compliance
• increase access to village financial documents for village residents, the department and the public register for retirement villages
• strengthen the RV Act’s purpose by adding a new objective: ‘to maintain public confidence in the retirement village industry by enhancing the financial transparency of village operations and the accountability of operators’.

What’s changed?

Better resident access to financial documents

Residents and resident committees can now request access to these financial documents before the beginning of a financial year:

• village capital replacement fund
• maintenance reserve fund
• general services charge draft budgets
• related independent quantity surveyor reports.

Public retirement village register

Operators must provide independent quantity surveyor reports and audit reports to the department.

These reports and the annual financial statements form part of the public register for retirement villages.

Capital replacement fund

Clearer obligations and penalties require operators to:

• consider the quantity surveyor’s written report for the capital replacement fund budget
• ensure the annual capital replacement fund contribution covers:
  • necessary and reasonable spending from the fund for the financial year
  • a reserve amount that meets expected major expenditure over at least the 9 years after the financial year
• pay the annual capital replacement fund contribution into the fund each year.

Quantity surveyors

A quantity surveyor is defined as a person who holds a member grade or fellow grade membership with the Australian Institute of Quantity Surveyors.

Future regulation for more detailed financial reporting requirements

This change allows for future regulation to prescribe approved forms and additional information for financial documents such as:

• budgets
• quarterly and annual financial statements
• audit reports
• independent quantity surveyor written reports.

Departmental guidelines

The Chief Executive can make guidelines that:

• inform how the chief executive administers the RV Act
• outline their attitude about a matter
• help people comply with obligations or responsibilities, or lawfully and appropriately exercise powers under the Act.

These guidelines must be published on the department’s website.

Next steps

Operators must meet the new requirements in the RV Act for village budgets and financial reporting for the 2023–24 financial year.

This includes allowing residents and resident committees to request access to the draft budgets and quantity surveyor reports for the capital replacement fund and maintenance reserve fund used for the 2023–24 budgets (see section 113AB).

The changes don’t introduce new forms or templates for presenting village budgets and financial statements.

Currently, operators don’t need to comply with section 113AA, as this refers to requirements under a future regulation. Section 113AA will apply only once the new regulation is in force. However, many operators already report or disclose the information that section 113AA may cover, and should continue to do so for transparency and best practice.

The Department of Housing will soon consult with resident, industry and legal groups on proposed amendments to the Retirement Villages Regulation 2018 and implementation timeframes.

Read more about these amendments for residents and for operators.