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Regulatory requirements for Queensland Retirement Village operators

RV residence contract

Australian retirement village operators are required to meet mandatory and other obligations to comply with State and Federal Law. In Queensland, as in other states, these regulations are designed to protect residents and avoid conflicts as well as establish a benchmark in operational process. The intention is to give prospective residents information in a standardised format to assist them in choosing an appropriate village and understanding their rights and financial obligations upon entering into a residential contract.

By law, Queensland Retirement Village Scheme Operators must provide prospective residents with various documents at least 21 days prior to them entering into a residence contract, so that they have time to research, compare and seek advice on the village contractual obligations and inclusions. These documents include:

  • Village comparison document (VCD)
  • Prospective costs document (PCD)
  • Residence contract
  • Village by-laws
  • Additional required documents (specific to a particular development)

The VCD and PCD replace what was formerly known as a Public Information Document (PID).

Village Comparison Document (VCD)

Queensland Scheme Operators must provide a completed village comparison document (Form 3)  to a prospective resident within 7 days of their initial request. This document provides an array of general information about the retirement village accommodation and costs, including:

  • operator and management details
  • age limits
  • accommodation types, facilities and services
  • access and design
  • parking for residents and visitors
  • planning and development
  • security and emergency systems
  • costs and financial management
  • exit fees – when you leave the village
  • re-instatement and renovation of the unit
  • capital gain or losses
  • exit entitlements
  • insurance
  • visitors
  • village by-laws and village rules
  • resident input
  • accreditation
  • waiting list

Queensland Operators must provide a VCD:

  • as a requirement when applying for registration as a retirement village scheme
  • within 7 days of a request by the prospective resident
  • with any promotional material, including displaying prominently on the Village website
  • as part of pre-contractual disclosure requirements before entering into a resident contract (at least 21 days prior), with any updates or changes to the document during that time also requiring a further delay of 21 days before a contract may be entered into

Prospective Costs Document (PCD)

Queensland Scheme Operators are also required by law to provide a completed prospective costs document (PCD) to a resident within 7 days of their request for information about a specific unit in the retirement village. This document must include:

  • name, address and details of scheme operator
  • type of unit and tenure of the unit
  • car parking
  • unit layout and access design features
  • fixtures, fittings and furnishings
  • encumbrances or endorsements on the village land
  • ingoing contribution and other entry costs
  • ongoing costs
  • exit fee, reinstatement of unit and other exit costs- when you leave
  • exit entitlement
  • estimated resident exit entitlement when resident exits after 1, 2, 5 and 10 years of residence

Queensland Operators must provide a PCD:

  • upon request by the prospective resident and within 7 days of receiving any information from them needed to complete the document
  • as part of pre-contractual disclosure requirements before entering into a resident contract (at least 21 days prior), with any updates or changes to the document during that time also requiring a further delay of 21 days before a contract may be entered into

Residence contracts

As we have noted, retirement village operators must provide prospective residents with a VCD and PCD including a copy of the Village by-laws 21 days prior to entering into a new contract. Despite clear legislative requirements around inclusions for these documents, the residence contract itself may take multiple forms depending on the type of scheme, for instance a freehold strata village contract may look very different to a lease or licence format.

The Queensland government has indicated a desire to standardise this form as is the case in other Australian state jurisdictions, however as at the date of writing, this has not materialised. Instead, the contract is prescribed mandatory terms by the Retirement Village Act Qld 1999, and must include:

  • start and end dates of the cooling-off period
  • rights to withdraw the contract before the cooling-off period ends
  • ingoing contribution amount
  • exit fee payable under the contract
  • resident’s exit entitlement
  • services charges, including amounts payable and when they are due
  • insurance for the retirement village, and insurance for which the resident is responsible
  • conditions the resident needs to be aware of and agree to on living in the village
  • right to resell the right to reside in the unit
  • resident’s entitlement to audited and unaudited financial statements for the village
  • dispute resolution process
  • rights for termination of the contract (for both operator and resident)
  • funds the scheme operator is required to keep
  • retirement village facilities and land
  • details about whether residents share in any capital gain or loss
  • any other matters prescribed by regulation

Although standardised residence contracts are yet to be legislated in Queensland, the Retirement Villages Regulation 2018 outlines prescribed terms that must be included in a residence contract (a required term) or that must not be included in a residence contract (a prohibited term). Operators who enter into residence contracts that do not adhere to these drafting requirements will incur penalties.

Waivers and Cooling-Off Periods

The 21 day mandatory disclosure period prior to entering a retirement village residence contract comes with the option for a resident to waive this waiting period if they have received legal advice from a Queensland Lawyer and complete a precontractual disclosure waiver (Form 5) (PDF, 186KB).

With any residence contract, there is also a 14-day cooling-off period which commences after both parties have signed the contract, should the resident change their mind. If the resident withdraws from the contract during the cooling-off period, a Scheme Operator must immediately refund any ingoing contribution that has been paid.

Operator checklist

The retirement living industry is highly regulated and new operators must understand and fulfil their legal obligations to avoid harsh penalties. To assist with registering any new retirement scheme within Queensland, ensure the following steps have been taken in order to comply with the Act:

  • Prepare necessary documentation as listed above
  • Register the scheme by application to the Department of Housing and Public Works
  • Make required documentation accessible through promotion and direct enquiries by prospective residents
  • Ensure documentation is regularly updated to reflect any changes and avoid penalties

As with any new business venture, seeking professional advice is recommended. Property and Legal have represented Australian retirement village operators for over a decade and can provide expert guidance in registering your scheme and ensuring it fully complies with the law. Contact us for personalised assistance.