Are Victorian Operators Ready for a Financial and Operational Overhaul?
The Victorian Government’s proposed Retirement Villages Amendment Bill 2024 introduces significant changes that will impact retirement village operators, requiring them to reconsider their financial and operating models. Minister for Consumer Affairs Gabrielle Williams introduced the Bill to Parliament prior to Christmas, claiming it will provide some of the strongest protections in Australia for residents.
Industry Considerations and Uncertainties
Speaking to The Weekly Source, Rosemary Southgate, Principal at Russell Kennedy, the full impact of the reforms remains uncertain, particularly regarding the forthcoming Code of Practice and detailed Regulations, which are expected to be developed by 2026.
“Changes to the pre-contract disclosure requirements, the commitment to create simpler, transparent contract templates, and increased resources for dispute resolution are welcome,” she said.
Rosemary emphasised that the Bill introduces significant financial implications for operators. The government is seeking to regulate deferred fees, capital gain sharing, exit entitlement payments and calculations, capital replacement and maintenance, and village operating deficits.
“These reforms will require operators to reassess their financial and operating models moving forward,” Southgate added.
“While some of the changes bring Victoria in line with other states, some elements of the Bill indicate a shift towards a more restrictive financial framework that could limit contract flexibility for consumers.”
With the next Victorian Parliamentary sitting this week, operators will need to closely monitor developments and prepare for potential adjustments to their business models as further details emerge.
For more information on the Victorian reforms, join the DCM Institute at our upcoming Professional Development Day where Rosemary will present on the reforms in more detail.
