South Australia introduces new Retirement Villages Bill

The Retirement Villages Bill is set to replace the older Retirement Villages Act 1987 and it could mean substantial changes for the sector.

The key elements include:

• The introduction of a statutory repayment period of 18 months if a residence is not relicensed
• The ability to continue to live in the residence while it is being relicensed
• A disclosure template that clearly shows prospective residents the fees and charges payable in different villages
• Clarifies financial arrangements for transitioning into residential aged care

South Australian (SA) Minister for Ageing Zoe Bettison says the changes will give peace of mind to South Australians who make their homes in retirement villages.

“I also expect operators will also have certainty about their own obligations when it comes to contractual disclosure, compliance and regulation and dispute resolution,” she says.

South Australia’s peak organisation Council on the Ageing (COTA) SA has welcomed the changes, noting that while the much-awaited Bill did not address everything COTA SA had asked for, it was a significant improvement on the Act.

“These provisions replace an Act 30 years old and it is important to reflect on what provisions were in place,” says COTA SA chief executive Jane Mussared. “We are disappointed it wasn’t a 12 month payment period, but it does relieve some of the uncertainty around being able to access an estate.”

She highlights one member in her 90s had contacted the organisation to say that even though she and her husband had vacated their unit over two years ago, they had not been able to access their investment in it because it had not been relicensed.  

Ms Mussared also considers being able to occupy a unit whilst it’s been relicenced a great advantage.

“At the moment residents are required to move out even though the unit may be vacant, which is often highly disruptive and stressful,” she says. “This Bill will give people more confidence and protection in retirement villages and more certainty.”

However, SA executive director of the Property Council Daniel Gannon has condemned the statutory buy-back mechanism, saying South Australia cannot afford policies that damage job creation and investment.

“This decision, if supported by Parliament, will smash local operators with a compulsory buy-back and make residents’ units worth less, which is bad news for people living in retirement villages,” he says.

“We need investment and we need housing choices for older people,” he adds. “This isn’t just red-tape – it’s a straitjacket for the sector in an economic climate that sorely needs economic growth and job creation.”

Furthermore, Mr Gannon believes the Government has provided no evidence on the reasons why residents leave retirement villages.

“Firsthand knowledge from operators reveals that aged care entry or death of the resident are overwhelmingly the main reasons why residents leave retirement villages,” says Mr Gannon, and cites the 2013-2014 McCrindle Baynes Census which found 93% of residents surveyed felt that their decision to move into a village had been a good financial decision.

“Therefore, the Government’s 18 month buy-back provision would in most cases benefit the estate rather than residents themselves. Put simply, this is not good policy.”

Mr Gannon says that uncertainty around regulation of the industry makes it difficult for operators to prepare their budgets and frame their contractual arrangements, making South Australia a less attractive investment destination for retirement village operators.

This Bill follows a significant public consultation that attracted over 300 written submissions and also includes a 5-year review clause on the statutory repayment method to assess any impacts and ensure it has achieved the desired outcomes.

According to the Office for the Ageing, South Australia has over 500 registered retirement villages housing around 25,000 people over the age of 55.