State in Focus: After five years, reforms tabled in WA Parliament

What are some of the main changes?

• New disclosure requirements. This includes a community arrangement statement, that must be available on the operator’s website and provide some summary information about the village. A prospective resident information statement is also required.
• A requirement for operators to pay a resident their exit entitlement within 12 months of a resident leaving and providing vacant possession. This requirement applies to lease for life, strata title and purple title village arrangements. Operators may apply to the Commissioner of Consumer Protection for an extension to the 12 month period in some instances.  Operators will not be required to pay stamp duty on a buy back of a strata title or purple title, because there are also amendments being made to the Duties Act 2008 (WA).
• Where a retirement village resident moves into a residential aged care facility and before payment of the exit entitlement, the resident has a right to request the retirement village operator to contribute towards the costs of aged care as an advance payment of their exit entitlement.
• Changes to the refurbishment process and new concepts of reinstatement and renovation including a requirement for a property condition report at the start and end of occupation.  An operator is restricted to only requiring a resident to pay for a proportion of renovation costs where the resident is entitled to at least the same proportion of any capital gain.
• Operators must prepare capital works plans and establish a capital maintenance fund which can only be used for maintenance and cannot be used for capital replacements.
• A prescriptive process to be followed when an operator wishes to wind down a village or make other significant modifications to the village, including requirements for resident consultation, a special resolution of residents and in some instances the approval of the State Administrative Tribunal.
• The State Administrative Tribunal will have increased powers to deal with changes to village memorials.

When do the changes start?

The effective date of the new law is not yet known because once the legislation passes through Parliament, the accompanying regulations will also need to be drafted.  The regulator indicated that the regulations will be subject to consultation with the sector.

There will be a transition period, so that after the law commences, those sections of the legislation regarding exit entitlements will not start for a further 12 months.

For more information

We encourage Western Australian operators to familiarise themselves with the changes and assess the potential impacts. The Bill itself can be viewed here.

If you require further we recommend speaking with DCM Institute’s sector partners in the West, Bianca McGoldrick or Matthew Reid from Jackson McDonald.