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 included amendments to the Retirement Villages Act 1999 which implement the intent of recommendations made by the review panel’s Interim Report from the Independent Review of timeframes for exit payments in Queensland retirement villages.

These changes create a framework to exempt resident-operated freehold retirement villages from their requirements to buyback a freehold retirement village unit 18 months after the resident permanently leaves the retirement village.

A retirement village may be granted an exemption from the mandatory buyback requirements in the Act where the relevant Minister is satisfied:

• that the residence contracts in the village are based on a freehold interest
• about the extent to which residents can control or influence the affairs of the operator
• the operator’s assets and ability to generate income are likely to be insufficient to purchase a departed resident’s accommodation unit.

Other matters may be taken into consideration when determining whether an exemption is appropriate. This may include but is not limited to:

• whether retirement village land is included in a community titles scheme
• the extent to which the operator is involved in the refurbishment, reinstatement, renovation or sale of former residents’ accommodation units
• the extent to which the operator makes any profit from fees or charges payable by residents, and whether any amounts are payable to the operator on the sale of an accommodation unit.

A retirement village becomes exempt from the requirement to purchase an unsold freehold unit once it has been named as exempt in a regulation. The process is not automatic, and retirement villages that apply to become exempt will be assessed for eligibility.

Buyback requirements will continue to apply until a regulation is made granting the exemption. Operators may apply to the Queensland Civil and Administrative Tribunal (QCAT) for an extension of time in cases of financial hardship caused by any imminent buybacks, prior to being granted an exemption.

Further actions

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

Recommendations of the review panel Final Report is being considered by the Queensland Government, with a response to be released in due course.

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

This legislation contains amendments to the Retirement Villages Act 1999.

These amendments:

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

What has changed?

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

In February 2019, we introduced:

• an improved two-stage 21 day pre-contractual disclosure process that makes it easier for prospective residents to obtain information earlier and seek financial and legal advice
• a new Village Comparison Document and Prospective Costs Document (replacing the Public Information Document (PID)) that make it easier for prospective residents to 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 reinstatement or renovation of a unit, supported by entry and exit condition reports
• an improved process for a resident and operator to agree 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.

Amendments to the Retirement Villages Regulation to implement these changes to the law will occur in stages through to 2023.

In 2019, regulation amendments set out 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 protections for retirement village residents who hold a freehold interest of their unit
• give residents in freehold units certainty about the maximum time they’ll have to wait to receive their funds after they terminate their right to reside.
• require the village operator to purchase the unsold freehold unit, within a specified time frame, by entering into a contract with the former resident.

What has 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 particular time frame.

The Retirement Villages Act states how a resident can terminate their right to reside. This includes giving one month’s written notice to the village operator, by their death.

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 to units 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 of these dates at the latest:

• 23 May 2019—which is 6 weeks after proclamation of the Health and Other Legislation Amendment Act
• the date that’s 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 may continue to market the unit for sale to an incoming resident during any approved extension.

Read more exit entitlement information for residents and for operators.