The State Government released the Retirement Villages Amendment Bill 2022 Exposure Draft on Saturday 8 October 2022. There is an initial consultation period until 28 October 2022, when the Government will go into caretaker mode. The next stage of consultation will then depend upon the outcome of the State election. The Bill significantly re-writes the Retirement Villages Act 1986 (Vic) and makes many fundamental changes across all stages of the resident’s journey through a village, from pre contract disclosure, to operational matters during resident occupation, through to resident vacation including reinstatement/refurbishment obligations, payment of exit entitlements, termination rights and dispute resolution processes. Some of the more significant changes include the following: the Disclosure Statement and Factsheet to be replaced by one disclosure document called an Information Statement, which must be available on the operator’s website; a proposed settling in period; restrictions upon the use of the village operating surplus and operating deficit; restrictions upon increasing maintenance charges, if an increase is greater than CPI, to require a special resolution of residents to be passed at a resident meeting; liability for payment of maintenance charges for owner and non-owner residents will cease upon vacant possession; annual contract check-ups to be provided to all residents at no charge - initially in writing, but also with a meeting if requested by the resident; the deferred management fee to only be calculated as a percentage of the ingoing contribution paid by the resident; restrictions on sharing any capital gain and capital loss with the resident – they must be shared in the same proportion; as well as new definitions of what comprises a capital gain and capital loss; if maintenance charges are used for repairs and maintenance, an obligation to establish a separate capital maintenance fund which must only be used for repairs and maintenance and must not be used for replacements; requirement for a condition report for the premises to be prepared prior to the resident’s entry into occupation, to be used as a reference point for the resident’s reinstatement obligations upon vacant possession; restrictions upon a resident’s obligations to repair, reinstate or refurbish the premises upon departure – the resident is not responsible for fair wear and tear, the resident is responsible for reinstatement but is not responsible for renovation or upgrade works; expansion of the aged care payment rule to include an obligation to pay alternative accommodation payments for the care of residents who move from the village to other accommodation which is not a residential care facility; and requirement for an exit payment to be made within 12 months of vacant possession for owner and non-owner residents, with no carve-outs or exceptions other than by way of an application to VCAT by the operator on the grounds that they may be unable to pay the exit payment. The Bill and explanatory material make no reference to whether these changes will be retrospective or prospective, despite various commitments being made previously that many of the changes will be prospective. Please find a link to the Exposure Draft of the Bill here. This Bill represents a significant change to the Act and will have a major impact upon the operation and development of retirement villages. We encourage all operators to make a submission in relation to the Bill. Further Information If you require further information or would like to discuss how these significant changes might affect you, please contact Rosemary Southgate, Donna Rayner, Kathryn Elleman or John Corcoran from our Property and Retirement Living team or Rohan Harris from our Corporate & Commercial Advisory team. If you would like to keep up to date with our retirement living Alerts, Insights and upcoming events, you can subscribe to our mailing list here.