The next rollout of changes to the Retirement Villages Act 1999 (Qld) (RV Act) introduced by the Housing Legislation (Building Better Futures) Amendment Act 2017 (Qld), commenced on 11 November 2019. In this alert, we have briefly set out some of the changes which took effect and which you need to be aware of to ensure compliance.
General Services Charges (GSC)
Scheme operators must establish and keep a separate fund for the GSC. Separate accounts have to be kept for this separate fund. Scheme operators must not use any amounts out of the general services charges fund for a purpose other than providing general services to residents in the village. Failure to adhere to this requirement carries a maximum penalty of 540 penalty units or $72,063 (as at 11 November 2019).
In addition to this, scheme operators are also now required to pay the GSC for units that are under construction or being renovated. Prior to this change, scheme operators were only required to pay the GSC for units that have not been occupied or where no residence contract is in force. A similar requirement applies to the maintenance reserve fund.
Change of Scheme Operators – Transition Plans
Any scheme operator who proposes to transfer control of the operations of a retirement village to a new scheme operator, for instance in the sale of a village, must prepare a written transition plan and give notice to the Department of Housing and Public Works (Department). Transition plans will need to be in the approved form and require the Department’s approval.
The approved Form 11 which is available for downloading from the Department’s website provides guidance with respect to the requirements of the transition plan while the RV Act sets out the relevant procedure for having transition plans approved.
This requirement does not apply to any transfer of control of a scheme’s operation under a contract signed prior to 11 November 2019.
Closure of a Village – Closure Plans
Scheme operators who propose to close a village, whether permanently or temporarily, must prepare a closure plan for provision to residents and give notice to the Department. Closure plans will need to be prepared in the approved form and may only be approved by residents’ special resolution at a residents meeting or by the Department.
The approved Form 8 which is available for downloading from the Department’s website provides guidance with respect to the requirement of the closure plan while the RV Act sets out the relevant procedure for having closure plans approved.
A scheme operator that seeks to redevelop a retirement village without winding down the retirement village scheme or stopping the retirement village scheme from operating (including stopping temporarily), will need to prepare, obtain approval of and comply with an approved redevelopment plan. Such development includes:
- constructing or demolishing an accommodation unit;
- constructing, demolishing, expanding or reducing a building or structure within the village;
- expanding or reducing the size or area of the retirement village (including greenspace or parklands); and
- changing the use of a building or structure located in the retirement village.
A redevelopment plan is not needed where:
- any expansion or reduction of a building or structure within the village is only minor (eg construction of a shed or similar structure);
- the change of use of a building or structure is only minor; or
- every resident of the village was given written notice of the redevelopment before becoming a resident, in their public information document, residence contract, village comparison document, prospective costs document or the village by-laws.
Redevelopment plans will need to be prepared in the approved form and may only be approved by residents’ special resolution at a residents meeting or by the Department. The approved Form 9 provides guidance with respect to the requirement of the redevelopment plan while the RV Act sets out the relevant procedure for having redevelopment plans approved.
What actions do you need to take?
All scheme operators should familiarise themselves with the changes that commenced from 11 November 2019 to ensure they are complying with the relevant changes to the RV Act, ie establish a separate GSC fund for each village. In addition to this, operators will also need to ensure that systems are in place to address the requirements which have been imposed on the GSC fund.
In relation to the other changes outlined above, unless you are undertaking respective particular activity (eg redeveloping your village), you do not need to take any immediate action. However, you should be aware that if you do wish to undertake one of those activities, there are now new requirements that you must comply with.
We also recommend that you review your template residence contracts to ensure they are consistent with the changes to the RV Act introduced by the Housing Legislation (Building Better Futures) Amendment Act 2017 (Qld), including the changes set out above and its other changes commenced earlier.
For further information please contact:
Julie McStay | Partner | +61 7 3338 7522 | [email protected]
Madeline Walsh | Partner | +61 7 3338 7906 | [email protected]
Maryna Roganova | Senior Associate | +61 2 8248 5881 | [email protected]
Matthew McMahon | Associate | +61 7 3338 7959 | [email protected]