The NSW Government has developed a standard contract for retirement villages that will be mandatory for village contracts entered into on or after 1 October 2013.
There are also some new requirements about what disclosure documents operators must provide before prospective residents sign a contract.
The Retirement Villages Regulation 2009 has been amended to include three new documents which will be compulsory from 1 October 2013. These are:
The aim is to make it easier for prospective residents to compare the costs and conditions between villages before signing a contract. This forms part of the Government’s commitment to building a stronger retirement village sector for the benefit of residents and operators.
The new retirement village contract and disclosure documents are available now to give operators enough time to prepare ahead of the commencement date on 1 October 2013.
To help operators transition to the new requirements, NSW Fair Trading has developed template contracts for the five most common village types. Operators can freely download and adapt the contract for their village, by adding their logo and including additional terms at the back of the contract. This can be done so long as the additional terms don’t conflict with the requirements of the retirement village laws or any other laws. The standard terms cannot be changed, although some terms are optional for different village types.
The general inquiry document and the disclosure statement can also be downloaded. The templates can be saved and retained by operators, making it easier to update as the need arises.
Fair Trading is developing guidance materials to help retirement village operators to complete the documents. The general inquiry document will need to be provided to prospective residents when they make an initial enquiry. The disclosure statement must be provided where a prospective resident expresses interest in a unit in the village and at least 14 days before entering into a village contract.
The following information briefly explains how operators will need to use the new documents.
On receiving an initial enquiry from or on behalf of a prospective resident, operators will need to provide a two page general inquiry document. The general inquiry document gives prospective residents general information about the village, including the village type, costs to enter the village and the village facilities. This will help prospective residents in their search for the right village.
The new version of the disclosure statement must be provided where a prospective resident expresses interest in a unit in the village. The disclosure statement contains more detailed and specific information, including financial arrangements particular to the village and unit.
The disclosure statement must be provided to prospective residents at least 14 days before they can sign a contract. This will assist residents to make informed decisions. Prospective residents are encouraged to carefully consider the information provided in the disclosure documents and the standard contract before entering into a village contract.
The standard retirement village contract has been designed to clearly set out residents’ and operators’ rights and obligations in a clear, standardised format.
The standard contract covers matters such as what residence rights are involved, entry costs, the settling-in period, recurrent charges, services and facilities, alterations and additions, repairs and maintenance, sharing of capital gains, and departure fees.
Operators who require assistance in the transition to the standard contract can contact Fair Trading by email at email@example.com.
The prescribed documents (listed below) become mandatory on 1 October 2013. Here is a list of the documents prescribed by law in Word template formats: