Rules of Conduct for operators of retirement villages

What is this about?

The NSW Government is continuing to reform the retirement villages industry by introducing Rules of Conduct for Operators of Retirement Villages (the Rules). As a result, we are seeking feedback on proposed amendments to the Retirement Villages Regulation 2017 (the Regulation).

Amending the Regulation is required to bring into effect the Rules, which were established under the Retirement Villages (Amendment) Act 2018 (the Amendment Act). The Rules set a minimum standard of behaviour for operators and provide the retirement village industry with a clear foundation of practices and processes for the effective functioning of a village. The Rules will be mandatory. Operators will be required to comply or be subject to penalties.

What has happened so far?

On 15 December 2017, the NSW Government received the Final Report of the Inquiry into the NSW retirement village sector (the Report). The Inquiry was led by Ms Kathryn Greiner AO, and examined the fairness and transparency of business practices in NSW retirement villages.

The Report raised concerns around the responsibility of managers and operators in retirement villages. The NSW Government agreed that managers and operators should be more accountable for their actions. The Amendment Act provided regulation making power to establish a mandatory code of conduct for retirement village operators.

The Amendment Act was passed by Parliament on 28 November 2018, bringing changes and improvements to the retirement village industry, including:

• minimum standards around safety and emergency plans and awareness of evacuation procedures,
• annual contract ‘check-ups’ to give residents clarity around the process involved when leaving a village and, most importantly, the costs involved,
• improved transparency around maintenance and replacement costs through an asset management plan, which will be available to current and prospective residents,
• a consent process for the appointment of a village’s auditor, putting power back in the hands of residents, and
• enhanced powers for Fair Trading to collect, share and publish retirement village sector information.

The Amendment Act includes a number of other reforms, which will require further consultation before they are finalised and implemented. More information on these can be found on the Retirement village laws and inquiry page.

What are the changes?

The Rules of Conduct broadly seek to establish the standards of conduct and behaviour that are required of operators in relation to the management of a retirement village. These include:

• mandating higher standards of customer service to ensure residents and prospective residents are treated with respect, dignity and fairness.
• promoting fair, honest, transparent and ethical practices for the marketing, promotion and transfer of residential premises in retirement villages.
• creating a framework for retirement village operators for the avoidance, disclosure and management of conflicts of interest.
• establishing minimum standards for the resolution of disputes and handling of complaints in a retirement village and appropriate escalation pathways for residents and the operator.
• requiring minimum training and competency standards for retirement village operators and members of staff, including the effective oversight and supervision of members of staff.

Next steps

Fair Trading is seeking feedback on the proposed amendments to the Rules of Conduct from 10 May 2019 to 7 June 2019.

Once the consultation period has closed, feedback will be analysed and all potential options assessed.

The proposed amendments to the Regulation are intended for commencement by 1 July 2019.

More information about the progress of other retirement village reforms will be made available on the Retirement village laws and inquiry page.