Governance of retirement villages

Retirement village accreditation

Voluntary accreditation schemes have been in place for some time. An example is the Lifemark Village Scheme.

The retirement village sector recently launched the:

  • Australian Retirement Village Accreditation Scheme (ARVAS), and
  • Retirement Living Code of Conduct (RLCC).

ARVAS includes seven standards and is voluntary. It replaces the Lifemark Village Scheme and other earlier voluntary schemes. To gain ARVAS accreditation, the operator must also subscribe to the RLCC.

In 2017, a Parliamentary Inquiry made recommendations about the retirement housing sector. These included consideration of mandatory accreditation for all retirement housing operators.

Administering and enforcing a mandatory scheme would be expensive. It may lead to increased running costs for village operators. These may be passed on to residents. We should also consider the effects on residents if their village fails to achieve or maintain accreditation.

We would like your views on developing a model for mandatory accreditation for the retirement village sector.

Questions for consideration

  1. What do you consider to be the benefits and costs of introducing a form of mandatory accreditation for retirement villages?
  2. What do you consider to be the necessary elements of any mandatory accreditation scheme?
  3. What do you consider to be the benefits and costs of voluntary accreditation schemes?
  4. By what alternative means could the standard and quality of services provided by retirement villages be improved?

Manager qualifications and training

The Retirement Villages Act 1986 (RV Act) imposes two restrictions on who can be involved in retirement villages.

It says you cannot be involved in the promotion or sale of residential rights in a retirement village if you:

  • are insolvent under administration, and
  • were convicted of a fraud or dishonesty offence within the last five years.

There is no minimum training or mandatory ongoing professional development for managers or employees.

We would like your views on whether retirement village managers and employees should have to:

  • undertake certain training, and
  • meet ongoing professional development obligations.

Questions for consideration

  1. Should there be any additional limitations or requirements on persons who can be involved in promoting or operating retirement villages?
  2. What do you consider to be the benefits and costs of mandating training and professional development requirements for retirement village managers and employees?
  3. How should any requisite professional development requirements and training be determined?
  4. Are there other ways to ensure that retirement village managers and employees have the requisite skills and professionalism to undertake their responsibilities?

Residents’ committees

The RV Act allows retirement village residents to elect a residents’ committee to represent their interests.

A residents’ committee can also:

  • call meetings of residents
  • help resolve disputes between residents, and
  • approve above-CPI increases in maintenance charges.

We would like your views on whether the RV Act allows for resident participation well enough.

Questions for consideration

  1. Is the current role of the residents committee appropriate and are its powers adequate?
  2. Should residents committees have a role in dispute resolution involving resident-to-resident disputes?
  3. Should residents committees have the power to approve above-CPI increases in maintenance charges? If not, why not?
  4. Should retirement village owners and managers involvement in meetings of the residents committee be prohibited unless invited by the committee?

Annual meetings/reporting

The RV Act says managers must hold annual resident meetings and report on certain matters, including:

  • the payment or non-payment of in-going contributions in the previous year
  • details of any matter preventing the owner from meeting their debts in the following year
  • the amount of maintenance charges received in the previous year
  • details of proposed increases in maintenance charges for the following year
  • details of expenditure on the provision of goods and services for the village in the previous year
  • anticipated expenditure for the following year
  • provision for any extra-ordinary or major works in the village, and
  • details of proposed special levies.

These requirements aim to ensure residents are informed about how their maintenance charges are being spent and whether they should agree to maintenance charge increases or special levies.

The RV Act does not say operators must give this information in a particular format or before the meeting.

We would like your views on whether the annual reporting requirements are strong enough.

Questions for consideration

  1. Is the level of detail about the financial activity involving the retirement village required to be included in the financial statements adequate for residents? If not, why not?
  2. Should residents be provided with copies of the financial statements before the annual meeting? If so, what period is reasonable?
  3. Are there any other matters that should be addressed in the reporting requirements?

Retirement villages with an owners corporation

Some retirement villages have owner-residents who own the strata title for their unit. Those residents will be members of an owners corporation. That means both the RV Act and the Owners Corporations Act 2006 (OC Act) apply to those villages.

If there is an owners corporation, the RV Act says the annual owners corporation meeting can replace the annual resident meeting. This creates issues in villages that have a mix of owner-residents and non-owner residents. Non-owner residents include loan-lease and licence residents.

The issues include:

  • Should an annual owners corporation meeting consider matters that affect all the residents? (That would affect the non-owner residents.)
  • Can non-owner residents attend or vote at owners corporation meetings? (They are not members of the owners corporation.)
  • If there is more than one owners corporation, which one should replace the annual resident meeting?

We would like your views on the best way to manage annual meetings when there are owner-residents and non-owner residents.

Questions for consideration

  1. In mixed tenure retirement villages, should there be separate meetings for the village, according to the provisions of the RV Act, and for the owners corporation, according to the provisions of the OC Act? If not, how should issues identified for mixed tenure retirement villages be addressed?

Operators obligations

Responsibility and timeframe for repairs and maintenance

The RV Act says the contract must set out who is responsible for repairs and maintenance.

The Government considers that the RV Act should:

  • ensure that it is clear who should to pay for repairs and maintenance. This should cover both inside units and in the communal areas and facilities
  • say that repairs and maintenance works must be done within a reasonable timeframe that is acceptable to all parties, and
  • say that retirement villages must report to residents on compliance with maintenance plans. Residents’ maintenance fees fund these plans.

What is the difference between ‘maintenance’ and ‘capital’ items?

The RV Act does not define ‘maintenance items’ and ‘capital items’. Residents and operators sometimes disagree about which category a problem item is in. This affects who must pay for its repair or replacement.

This can create problems. It is especially an issue if residents must also contribute to a capital replacement fund. For example, the contract may not be clear about whether items are:

  • covered by the capital replacement fund, or
  • the operator’s responsibility.

We would like your views on the extent the RV Act should:

  • regulate responsibility for repairs and maintenance, and
  • address all the related recommendations of the Parliamentary Inquiry.

Questions for consideration

  1. To what extent should the RV Act further address issues of ‘responsibility’ and ‘timeliness’ for repairs and maintenance in retirement villages?
  2. What are the problems in more prescriptive requirements applying to all types of retirement villages and in all types of circumstances?
  3. To what extent can or should the RV Act regulate what constitutes maintenance and capital items and to what extent should these issues be left to voluntary codes or guidelines?

Maintenance and capital replacement plans and funds

The RV Act does not say retirement villages must have maintenance plans or capital replacement plans. If they do have such plans, they do not have to report on them.

In contrast, the OC Act says owners corporations with many strata-title units must:

  • prepare and approve a maintenance plan
  • establish a maintenance fund, and
  • report on implementation of the maintenance plan. This is in addition to general reporting obligations.

We would like your views on whether the RV Act should say all retirement villages must have a maintenance and capital replacement plan and fund.

Questions for consideration

  1. Should all retirement villages be required to have maintenance and/or capital replacement plans and/or funds?
  2. If so, what, if any, minimum requirements should apply to the establishment and operation of such plans and funds (for example, reporting obligations and restrictions on how monies are held)?

The regulation of privately funded care services in retirement villages

A key feature of retirement villages is that they can provide residents with a range of services. Some services form part of the operation of the village and are subject to a monthly service or maintenance charge. These may include gardening, repair and maintenance and recreation services.

Operators may also provide personal services to residents. Personal services can include laundry and cleaning services, meals and ‘care services’. Care services may include nursing or medical services. Residents pay for personal services and can choose whether to buy these services or not.

The RV Act does not regulate the services provided to residents. They are regulated by general consumer protection laws, such as the Australian Consumer Law.

If health professionals provide a service, other regulatory frameworks apply. An example is the Health Practitioner National Health Law. This is in addition to contractual and consumer law protections. Health professionals include doctors, nurses, physiotherapists and others.

Some health providers do not have to be registered. These include massage therapists, naturopaths and ancillary service providers. They must comply with a General Code of Conduct under the Health Complaints Act 2016.

Aged Care Services and retirement villages

The Aged Care Act 1997 and the Aged Care Quality and Safety Commission (ACQSC) regulate some aged care services. These services are subject to significant monitoring, investigative and enforcement powers. This is to address any concerns with the level and standard of care provided.

This regulatory framework applies to retirement villages that are approved aged care service providers and only applies to the delivery of Government funded care services. It does not apply to the delivery of privately funded care services.

If a retirement village can no longer meet a resident’s care needs

The RV Act allows operators to say a resident must leave the village if their care needs cannot be met there. Two medical professionals must first certify this. The resident nominates one of the professionals.

We would like your views on the:

  • regulation of retirement villages providing privately funded care services, and
  • role of operators ensuring the welfare of residents.

Questions for consideration

  1. If you are a current or former resident of a retirement village, what are your experiences with receiving privately funded care services through a retirement village?
  2. Do you think retirement villages should provide privately funded care services?
  3. Is the current regulatory framework for the delivery of privately funded care services sufficient to ensure that potentially vulnerable and frail residents receive safe and high quality standards of care?
  4. What role, if any, should retirement village operators have in ensuring the safety and welfare of their residents, taking into account a resident’s right to autonomy and privacy?