Rights and obligations for retirement village operators

A retirement village operator is defined in section 4 of the Retirement Villages Act 1999 (the Act) as a person who owns, manages or controls the village. This does not include the:

• owners corporation in a strata scheme village, or
• community association in a community scheme village.

It also does not include a strata or community managing agent.

A village operator has the right to:

• sell or transfer ownership of the village or its management rights (the new operator is bound by existing residents’ contracts)
• decide who is employed in the village, subject to the amount for salaries and wages in the annual budget
• propose an amendment to the village rules or a variation to the services and facilities provided
• apply to the NSW Civil and Administrative Tribunal (NCAT) to settle disputes.

Among other things, a village operator must:

• enter into written contracts with residents
• make sure the village is reasonably secure and safe, including:
  • ensuring locks and security devices are in working order
  • preparing written safety and emergency procedures
  • ensuring residents and staff are familiar with the procedures
  • undertaking an annual safety inspection
  • complying with annual fire safety requirements
  • ensuring all residents are notified in writing of when a safety inspection is undertaken, and given access to the safety inspection report if requested
• hold annual management meetings with residents
• make sure there is vehicle access at all times for emergency and home care services
• use their best efforts to ensure residents, visitors and employees comply with the village rules
• prepare a strategy for preventing elder abuse
• avoid conflicts of interest and disclose, record and manage and resolve any conflicts that arise
• ensure complaint and internal dispute resolution processes are prepared and maintained
• must prepare and implement written policies and procedures for the selection, training and ongoing supervision of the operator’s staff and monitor compliance with these policies
• insure the village for full replacement value and have public liability insurance
• prepare an asset management plan and keep it up to date
• arrange for maintenance and repair or replacement of village property as necessary
• prepare an itemised annual budget, including an annual capital maintenance report for maintenance estimates
• provide receipts for ongoing charges
• provide copies of the proposed annual budget to residents, including the annual capital maintenance report
• make sure the village’s annual accounts are audited (where required) and provide copies to residents within four months, and
• provide quarterly accounts where required.
• provide the relevant village (see schedule 7 of the Regulation) information to NSW Fair Trading

Accounting exemptions for smaller villages

If a village’s total annual recurrent charges are $50,000 or less, the residents can give their written consent that:

• the annual accounts do not have to be audited, or
• quarterly accounts do not have to be given to the residents.

If the total amount of recurrent charges in a financial year is $50,000 or less, the residents can also consent to not receive a copy of the proposed budget.

If the annual accounts are not audited, you must prepare a statement stating you can meet all liabilities relating to the village for the current and following year. If the recurrent charges collected for the year exceed $50,000 or the residents revoke their consent, the exemptions stop.

Registration of retirement villages

All retirement villages in NSW must be registered with NSW Land Registry Services. This is a requirement under section 24A of the Act and penalties apply if you do not comply. New villages must be registered before they enter into any village contracts with residents.

How to register a village or update details

You’ll need to complete form 11RN from the NSW Land Registry Services. On the request form, you need to:

• identify the land, or the relevant part of the land that is being used as a retirement village
• the name of the village.

You only need to register once, but you must let NSW Land Registry Services know if there are any changes to the information. Registering the village creates a statutory charge under Part 10A of the Act.

Register of retirement villages

Retirement villages may be noted on the public register hosted by NSW Fair Trading. The register enables prospective residents to search for villages located in the area they are interested in by:

• village trading name
• address.

Access the register

The register of retirement villages is available on the Verify.licence website. The register contains the trading name/s and addresses of retirement villages in NSW. You can also search by local government area (LGA) so see a list of all retirement villages in your council area.

Search the register of retirement villages

Please report incorrect or outdated information to the village operator or contact NSW Fair Trading. 

Disclosure to prospective residents in a retirement village

The Act and Regulation contain rules about the information you must tell prospective residents before they sign a village contract. There are 2 compulsory disclosure documents that must be provided. These are the:

• retirement village general inquiry document
• retirement village disclosure statement.

Both of these documents are published in the NSW Government Gazette. Additionally, a copy of the village rules (if any) must also be provided with the documents.

There are also other compulsory disclosures that have to be made on request.

General disclosure document

When a prospective resident, or someone on their behalf, makes an initial inquiry about becoming a resident, you must provide a completed general inquiry document within 14 days. The general inquiry document gives prospective residents general information about the village, including:

• a basic overview of the types of dwellings
• available services and facilities
• an idea of the costs involved.

Disclosure statement

You must give a disclosure statement at least 14 days before signing a contract to:

• a prospective resident, or
• someone acting on their behalf.

The disclosure statement contains more detailed information than the general inquiry document, including financial arrangements for the village and particular unit.

If a prospective resident enters into a contract

If the prospective resident enters into a contract with the village, a copy of the disclosure statement must be attached to their village contract.

Generally, if there is any term in the contract inconsistent with the disclosure statement that is detrimental to the resident, the information in the disclosure statement will override the inconsistency. The disclosure statement must include:

• the fees and charges that are payable under the contract
• an average resident comparison figure.

Other compulsory disclosures

A range of additional documents must be available for a prospective resident, or a person acting on their behalf, to freely inspect, either at the village or the operator’s place of business. They are entitled to take notes and make copies of these documents. A request can also be made for the operator to send documents to the person, in which case they must be provided within seven days of the request, free of charge.

The documents that must be made available include:

• a site plan of the village and plans of available units
• the budgets for the current financial year, the last 3 financial years and the next financial year (if it has been prepared)
• the annual accounts for the last 3 years
• the most recent quarterly accounts (if any)
• examples of all village contracts the resident may be required to sign
• the trust deed for any trust fund where the money paid by residents will be deposited
• the village rules (if any)
• the terms of any development consent (if the village is not complete, or if the development consent requires particular services or facilities to be provided for the life of the village)
• the most recent asset management plan
• the most recent annual capital maintenance report extracted from the most recent asset management plan and included in the most recent annual budget
• if the village has a capital works fund, statements showing the balance for the last 3 financial years and the most recent quarter
• the operator’s waiting list policy (if relevant)
• the company’s constitution and replaceable rules (company title villages only)
• the management statement, management agreement and minutes of the most recent annual general meeting (community land scheme villages only)
• the by-laws, management agreement and minutes of the most recent annual general meeting (strata scheme villages only)
• court or tribunal decisions from last 5 years where the operator and Residents Committee were parties
• the certificate of insurance for the village
• policy documents showing the nature of the risk insured and the amount of insurance
• the most recent safety inspection report
• a detailed list of all currently available premises in the village
• any other documents listed in section 12 of the disclosure statement.