Stage two of proposed reforms to retirement villages legislation in Western Australia - Consultation Regulatory Impact Statement 1
Significant changes to the Retirement Villages 1992 Act (RV Act) were put in place prior to 2016 as a result of the stage one review. Many of these changes focused on providing the consumer with more information when deciding whether to enter into a retirement village agreement in Western Australia.
Despite the reforms, some problems have persisted including consumers continuing to enter into contacts without fully understanding their legal rights and obligations. Since stage one of the review further matters have arisen, and these issues are now being considered as part of the second-stage review.
As there are a large number of issues to be consulted on, the outstanding matters have been grouped in categories to deal with common issues and themes. A Consultation Regulatory Impact Statement (CRIS) paper will be released for each category for stakeholders to comment on any issues of interest to them.
This first CRIS 1 paper of the second stage of review of the RV Act will focus on improving:
- the definition of a retirement village product;
- how it is advertised and promoted; and
- and how consumers understand the pricing structure.
The aim of reform in this area is to further increase transparency, enabling consumers to better understand their rights and obligations before signing up for residency in a retirement village.
The CRIS 1 paper reviews key definitions in the RV Act, such as ‘retirement village’, ‘residence contract’ and ‘retirement village scheme’. Proposals are made to amend the legislation to provide a unified statement of the retirement village product that includes the right to occupy and the provision of amenities and services in a managed community.
The CRIS 1 paper will also focus on advertising and promotion of the retirement village product. Consumer Protection considers there is sufficient evidence showing that residentsssentially understand the retirement village product to be like a residential housing purchase. Proposals made include amendments to the retirement village legislation to provide more specific information about tenure and accommodation that is provided in a managed community.
Despite stage one reforms requiring pre-contract disclosure of all retirement village fees and changes, complaints received by Consumer Protection indicate consumers continue to misunderstand the retirement village product price. Consumers misunderstand both the upfront payment, or the upfront payment and recurrent charges alone as the price, and have difficulty in working out what the total price will be from the deferred management fee pricing structure. Further proposals are to amend the legislation to assist consumers in more fully understanding the price structure of the retirement village product. This also includes requirements for comparative tables to allow residents to compare retirement village products.
Consumer Protection is seeking submissions from stakeholders on the proposed changes to the retirement village legislation that form part of the CRIS 1. The paper contains tables outlining both the benefits and disadvantages of the proposed reform, along with specific questions for stakeholders to consider when making a submission.
You can download the above Have your say about retirement villages legislation poster to aid with the promotion of the consultation paper to your stakeholders.
Further consultation papers will be released throughout 2019 – 2020 dealing with the various other categories of reform.
Share this page: