State in Focus: Navigating the 2024 Changes to South Australia’s Retirement Villages Act

On 26 November 2024, the Retirement Villages Amendment Bill 2024 passed through both houses of the South Australian Parliament, amending the Retirement Villages Act 2016.

These changes mark a significant shift in the regulatory landscape, focusing on transparency, accountability, and consumer protection. Operators must prepare for the amendments, which will take effect upon assent or a later proclaimed date.

The scope of these amendments requires careful planning, as they affect legal, financial, and operational matters across all aspects of the retirement village business.

The key amendments include:

• Residence Contracts: Operators must include more detailed information about repair, maintenance, and reinstatement obligations.
• Disclosure Statements: These must now include a table estimating exit entitlements for residents who stay 2, 5, and 10 years.
• Waiver of Disclosure Period: Prospective residents can waive the 10-day disclosure period if they obtain legal advice.
• Premises Condition Reports: New requirements will govern the completion and submission of these reports, with regulations still to be released.
• Exit Entitlement Payment Date: Operators must pay exit entitlements within 12 months, starting 30 business days after vacant possession, with some exceptions. This obligation applies to existing and new contracts, subject to some limited exceptions (e.g. if the resident has moved out before commencement of the section).
• Deposits: New provisions cover the taking, holding, and refunding of deposits.

• Recurrent Charges: New provisions limit increases to a set amount or formula in the resident’s contract, with exceptions like increases in statutory charges and insurance, increases approved by the majority of residents or by SACAT order.
• Capital Contributions: Contributions are capped at 12.5% of market value for existing contracts or 1% per year of occupation for new contracts.

• Residence Rules: Operators face restrictions on changing residence rules, to be defined in regulations.
• Operator Duties: New duties include ensuring safety in common areas, insuring buildings, and providing staff training. Non-compliance will attract penalties.
• Termination of Schemes: Provisions detail how operators can terminate a village scheme, in whole or part.
• Codes of Conduct: Regulations may prescribe codes of conduct for residents, operators, and staff, with penalties for breaches.
• Staff Training: Operators must ensure staff undergo training on relevant codes of conduct before starting and every 3 years thereafter.

As some provisions refer to yet-to-be-released regulations, operators should stay engaged in the consultation process. With penalties for non-compliance, it is crucial for operators to seek legal advice and review contracts and operations. Early preparation will not only ensure compliance but also build trust with residents and stakeholders.

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