An RVA working party has been established to consult with the newly elected government who are reviewing the Retirement Villages Act in Victoria.
Representatives from Australian Unity, Russell Kennedy, Minter Ellison Lawyers, Becton and the Village Glen (Rosebud) will provide advice to Consumer Affairs Victoria (CAV) about the review of the Act and put forward recommendations to address specific issues and any uncertainties in the current regulatory framework.
With the cyclic nature of government reviews of the various state Acts, the RVA is committed to representing the industry in key issues regarding long term sustainability that will deliver affordable and high quality village environments for older people.
At this stage, no formal terms of reference for the review have been established.
However, the RVA has been proactive to ensure it leads this process, rather than waiting for changes to be proposed by the government and then having to respond.
The RVA’s key position on a number of items so far is as follows:
- Overlap between the Retirement Villages Act and Owners Corporation Act (OC Act) – The working group believes that retirement villages should be exempt from the OC Act to remove current confusion around the overlap of each Act. Any specific issues that require clarification can be explored as part of the review.
- CPI cap for maintenance changes - The working group believes the current Act may be misleading for potential residents that budget for services fees not increasing beyond CPI when exemptions (rate, utilities etc) are applicable that can greatly affect this assumption. The RVA will advocate that the cap should either be removed or exempt items identified in disclosure documents.
- Definition of maintenance – the current Victorian Act is better than New South Wales or Queensland Acts regarding maintenance where significant issues and confusion exist.
- The RVA will monitor and propose prescribed terms for residential agreements.
- The RVA will develop a draft Disclosure Statement framework to provide to Consumer Affairs Victoria (CAV) as a best practice example for the industry.
The RVA has consulted with members through a forum held in December 2010 and will provide a discussion paper for comment prior to circulation to Consumer Affairs.
ENDS
The RVA welcomes your feedback on this story and encourages you to leave a comment. You can submit your comment at the bottom of this post.
I believe the latest review of the NSW Retirement Villages Act has introduced a clear definition of difference between maintenace and replacement.
My understanding that maintenance costs are paid by the residents while a replacement is responcibility of the developers.
Current VIC Act allows developer to profit from the original investment in perpetuity investing in the property nothing at all. Please correct me If I am wrong.
Costs for Maintenance and Repairs have traditionally been funded through recurrent charges from residents. Replacement of capital items has traditionally been funded by the operator of a village.
The amendments that were made during the review of the NSW legislation in the regulations aimed to reduce the potential for disputes as to whether work is maintenance or replacement by expanding on the definition of capital maintenance which is defined in the Act as, “works carried out for the purpose of repairing or maintaining an item of capital.”
In February 2010 there was a Motion of Disallowance put forward in NSW Parliament to remove the expanded definition of capital maintenance in the regulation. This motion was passed by Parliament.
There is no part of the Victorian Retirement Villages Act that the RVA is aware of that stipulates that an operator does not have to invest anything into the village. This would also be an extremely poor business practice for any operator to take this approach.
However, if there are certain sections of the Act which you feel do allow this to happen, please notify the RVA and we will undertake a review along with our legal team to analyse your concerns.
Thank you for you reply.
The Act does not stipulate that operator does not have to invest anything in the village.
It does not define what constitutes normal repairs and maintenance and what is a replacement of a capital item. As it stands it is up to the operator to decide and the residents have to agree or go though the dispute resolution process.
Definition whci NSW failed to clarify sufficiently clarified still requires clarification in my opinion. If a clear cut definition can be acieved it will reduce costs of dispute resolutions. More importantly, it will save a lot of distress caused to the residents over such disputes. We cannot rely on the hope that all operators would adhere to good business practices.
Let me give an example of a dispute.
My parents live in a retirement village which is Strata title. It has a live in property manager. When they bought the unit it had a “red button” to call the manager in case of an emergency. Originally the button was a simple hard vired alarm system. Some years ago it was modified so that alarm goes to a pager as property manager cannot be expected to be in hearing distance of the alarm 24/7. Upgrade was performed at the expense of the residents. Last year thys system was replaced with a “Blue phone” whcih goes to a qualified nurse and (we were told) alerts the property manager as well. Residents who agreed to install the new system paid $900 each. Residents who did not agree to pay $900 no longer have access to any form of emergency call system but continue paying their share of the property manager salary and cost of the relievers when she is on holidays or sick.
Attempts to argue with the village operator that total replacement of the emergency call system cannot be considered repairs and maitenance and charged to the residents failed.
Pelase let me know what would be your judgement – is it really regular repair and maintenance?
Thank you for your comments. They are entering into a complex issue with a number of factors ranging from Federal Government awards through to village contracts. The working groups have carefully considered the issue and the position stated. Please feel free to contact the RVA to discuss this further on 02 9261 1777.