Retirement Villages Amendment Bill 2024 (Vic)
This article applies to operators of retirement villages.
On 28 May 2025, the Retirement Villages Amendment Bill 2024 (Vic) (the Bill) passed the Victorian Parliament and is currently awaiting Royal Assent. The Bill will commence on a day yet to be proclaimed. If it does not come into operation before 1 May 2026, it comes into operation on that day.
Operationally Significant Changes
The Bill inserts a range of amendments into the Retirement Villages Act 1986 (Vic) (the Act). The most significant changes (from an operational perspective), include:
- requirements for operators to provide residents with certain documentation prior to entering into a residence contract;
- requirements for operators to pay exit entitlements within a certain timeframe (being 12 months after vacant possession) and provide yearly contract checks to residents;
- the requirement for any surplus in the operator’s accounts to be carried over to the next financial year, and for a deficit to be borne by the operator;
- financial charges imposed on residents such as recurrent maintenance charges, personal services charges and any accrual of the deferred fee must cease upon the resident providing vacant possession;
- requirements for operators to record and report village disputes;
- the ability for a contracting party who has entered into a residence contract with a resident to terminate the contract if the resident has care needs which cannot be met in the retirement village, or the resident would pose a health and safety risk to any person or themselves if they were to remain in the retirement village; and
- restrictions on the proprietor or operator to charge maintenance charges or levy a charge for optional services against a resident on or after the time of their death, if the death occurs before they deliver vacant possession of their premises in the retirement village.
Further Information
The new sections 24(1) and 24(2) of the Act provide that, at least 21 days prior to a resident entering into a residence contract for premises in a retirement village or a management contract with the operator of the village, the operator must give a copy of the following documents to the resident which include:
- the residence contract (meaning a contract in the prescribed form in accordance with section 26B of the Act which creates or gives rise to a right to occupy premises);
- the management contract (meaning a contract between a resident and an operator which relates to the provision of services by the operator to the resident);
- a document under which a resident agrees to observe the by-laws, promises to pay an in-going contribution or a recurring charge for the provision of goods or services by the operator;
- an information statement which sets out information specified in section 18 of the Act (e.g. the name and address of the retirement village and its proprietor) and complies with section 19 of the Act (e.g. be in a form approved by the Director of Consumer Affairs Victoria and contain the prescribed information); and
- the by-laws.
The new section 24(4) of the Act provides that the operator must advise the resident of their right to inspect any residence documents (under subsection 23(1)) at least 21 days before a resident enters into any management contract with the operator.
The above sections are offence provisions with a penalty of 60 penalty units (currently $11,855.40) for a natural person or 300 penalty units (currently $59,277) for a body corporate.
Exit entitlement provisions
The new section 26F(1) of the Act provides that a residence contract must address the method for calculating an exit entitlement (defined in section 3D of the Act) that is repayable to a resident upon the resident’s vacation of the premises. The exit entitlement must be calculated in the prescribed manner (which does not apportion a higher proportion of capital loss to a resident than their proportion of capital gain).
Contract checks
The Act provides that an operator must provide a yearly contract check to owner residents (a resident who occupies a premises in the village under a right that is an estate in fee simple or because the resident holds shares in a company or units in a unit trust which provides residential premises and services for the retirement village) and to non-owner residents (a resident of the village who is not an owner resident of the village). A contract check consists of an operator providing the information set out in sections 26L (for owner residents) and 26M (for non-owner residents) as the case requires. Examples of the information that must be included in a contract check includes any requirements of the Act, the regulations and the retirement village contracts that the resident must comply with when terminating the residence contract or selling their premises; a resident’s exit entitlement; a reasonable estimated sale price for the premises; and the other matters set out in sections 26L(2) and 26M(2) of the Act.
The contract check must be calculated by reference to the date on which the check is given (or no later than 30 days after that date) and calculated as if the resident’s rights to occupy (or vacant possession of the premises the resident occupied in the village) has ceased on that date. In addition, if a resident requests a contract check, an operator must provide one (section 26O(1)).
These provisions are offence provisions with a penalty of 60 penalty units for a natural person (currently $11,855.40) or 300 penalty units for a body corporate (currently $59,277).
Recording and Reporting Requirements
The new section 38ZA(1) of the Act requires an operator to keep a record of all village disputes (meaning a management dispute or a resident dispute), under which notice has been given under section 38P of the Act. Notice is given under section 38P when a resident who is involved in a village dispute gives notice of the dispute to a primary contact person (or an alternative contact person if the dispute involves the primary contact person or if the primary person is not available or empowered to deal with the dispute). The record of the village dispute must include any outcome reached and the action, if any, taken in relation to each dispute.
The new section 38ZA(2) of the Act requires an operator to present a report on all village disputes at the annual meeting with residents. The operator must also provide this report to the Director of Consumer Affairs Victoria within 14 days of the annual meeting (as per section 38ZB of the Act).
These sections are offence provisions carrying a penalty of 60 penalty units (currently $11,855.40).
Please click here to access the full Bill.
