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The new Retirement Villages Regulations commenced on 30 July 2017

Donna Rayner, Lillian Graystone

From 30 July 2017, the Retirement Villages (Contractual Arrangements) Regulations 2017 (Vic) (“New Regulations”) have taken effect. The New Regulations repeal and replace the Retirement Villages (Contractual Arrangements) Regulations 2006 (Vic) (“Old Regulations”).

The New Regulations make numerous minor, but important, changes to the the Old Regulations. These minor changes affect titled as well as non-titled villages. However, the New Regulations significantly change the rights and obligations of operators and residents in non-titled villages with respect to funding residents’ aged care accommodation payments (“New Aged Care Rule”).  

In summary, under the New Aged Care Rule:

  • residence contracts entered into before and after the New Regulations come into effect are differentiated in terms of the operator’s payment obligations;
  • for existing contracts, village owners may have to advance up to 85% of a resident’s estimated refundable ingoing contribution by way of a residential accommodation deposit (“RAD”) or daily accommodation payments (“DAP”);
  • for new contracts, village owners may have to advance up to 85% of a resident’s estimated refundable ingoing contribution by way of DAP only;
  • if the village owner and resident cannot agree on the estimated refundable ingoing contribution for payment of a RAD, an independent valuation must be obtained with the costs of obtaining such valuation to be shared between the parties; and
  • residents retain the same rights with respect to the resale process (if the 6 month rule does not apply) as existed under the Old Regulations.

All village operators should review their current contracts to ensure that they correctly reflect the New Regulations. In particular, operators of non titled villages should amend their contracts and their procedures to reflect the New Aged Care Rule.

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