Why will proposed changes to the Retirement Villages Act, for new occupation right agreements, not apply until 12 months after the legislation receives royal assent: does this apply to all proposed provisions in the new legislation, such as the proposed updated retirement villages complaints and disputes resolution scheme?

Answer

Some of the key exit repayment provisions in the Retirement Villages Amendment Bill are intended to commence a year after the Bill receives Royal assent and will apply to occupation right agreements (ORAs) signed after that date. These are: the application scheme for early payment of a resident’s funds; the interest payment requirement after six months following ORA termination; and a 12-month maximum repayment timeframe for residents’ capital sums. Transition periods for the key exit repayment provisions are intended to ensure the ongoing viability of the retirement village sector by giving operators sufficient time to make financial arrangements or restructure their businesses in order to comply with the new requirements. This approach to commencement does not apply to all proposed changes. Other provisions will commence after Royal assent according to different timeframes, depending on whether and how much implementation time is needed by the sector and government. Some provisions will come into effect on the day after Royal assent, including minor and technical amendments and changes to the offences, penalties, civil liabilities, and pecuniary penalties regime. Other changes which are expected to commence on the day after Royal assent include changes to address fairness, such as prohibiting terms under which operators: pass on insurance excesses to residents who are not at fault for the damage; make a resident liable for a capital loss on resale of their unit but prevents them from being paid a share of any capital gains; and allow fixed deductions to continue accruing after ORA termination. Several changes will commence on Royal assent but will have a transition period for current ORAs, including stopping weekly fees on exit and new chattels and fixtures rules (including clarification of the scope of fair wear and tear, assignment of responsibility for costs, and gifting of chattels). To allow sufficient time for implementation, other changes are expected to commence 6, 12, or 24 months after Royal assent. These include: the new Registrar and statutory supervisor powers; rules for standardising legal documents; and provisions relating to the new, independent dispute resolution scheme. Some of these changes require regulations and code of practice changes to be operative, and it will take time to develop these regulations. A provider will need to be contracted to operate the new dispute resolution scheme and develop the rules of the scheme.