In January of 2018, shortly after the new laws came in to force , we discussed what was always likely to be a difficulty with the valuation process in our article “Buy-back clauses look good but how practical are they?”
Recently we again provided further specific advice as to how the valuation process ought to work in practice in “Agreeing a resale value for your retirement village unit”.
Indeed it has been our experience that leading up to 10 May 2019 and since, many valuers are not wanting, willing or able to undertake this work. With a dearth of valuers with experience in the Retirement Village Act space, and many of those having conflicts of interest with existing Scheme operator relationships (noting the independence requirements of section 70A, etc of the Act), we are hearing firsthand and anecdotally from industry and pro bono organisations that residents are having trouble obtaining a fair and reasonable valuation.
We expect many residents may find agreeing a resale value for their unit a costly and lengthy process, and the lack of experienced valuers is just the tip of the iceberg. Naturally, there is going to be some concern where valuers not well versed with the Act undertake this work, particularly when so much ultimately rests on the results.
Here’s something else to consider. Should the valuer come to a valuation on an as is basis – that is, prior to reinstatement or refurbishment works stated to be undertaken under the terms of the lease and paid for by the resident as part of the exit entitlement process?
We are aware that some residents have already commenced proceedings through the Queensland Civil and Administrative Tribunal (QCAT) where Operators have failed to make the mandatory payment on 10 May 2019 as is required by section 63(1)(c). Whilst we understand QCAT do not regularly receive applications under the RV Act, it is clear that the tribunal and mediators will need to be adept to these new issues brought about by the 2017 legislative changes, and hopefully act promptly and proactively considering the emotional and financial stresses on the very persons those changes were designed to protect and assist.