Retirement Villages Act 1999  Review July 2001

The following are the amendments to the Act proposed by the ARQRV and submitted to the Minister, together with the relevant extracts from the current Act. 
If you would like to see the whole act, 127 pages of it, click on:-  THE WHOLE ACT    (Use Minimise to alternate between this page and the Act, or the Delete "X" to come back to this page)

PART 1  Division 3
Section (15) (2)

Act recites:- The Exit fee for a residence contract, other than an existing residence contract, that a resident may be liable to pay to the scheme operator is to be calculated as at the day the resident ceases to reside in the accommodation unit to which the contract relates

Comment:- The words "other than an existing residence contract " should be omitted.

By limiting, for new residents, the accrual of Exit Fees to the date of vacation, the Act acknowledges that their continuing accrual beyond that date is an indefensible practice. The fact that it may be a feature of an existing contract does not make it defensible and this Association sees no good reason why it should not have been outlawed, as for new residents, from the date the Act became law, or why it should not now be outlawed.

Section 20

Act recites:- A maintenance reserve fund contribution is a proportion of the general services charges, decided by the scheme operator and described in the public information document as a contribution to the maintenance reserve fund

Comment:- It is our opinion that the maintenance reserve fund contribution should be separately identified, as it is in S.45 (1)(f) and Part 5 Division 5, and not expressed as being a proportion of the general services fund. The maintenance reserve fund should also be separately identified in the village accounts, so that residents can more readily scrutinise its income and expenditure. Residents need to be able to assure themselves that neither operational expenditure nor capital replacement is being charged to the maintenance reserve fund, a practice already adopted by some operators. The legislation should require greater accountability than it does at present.

PART 2  Division 2
Sections 36 & 37

Act recites:- (36)(1) This section applies if the particulars in a public information document for a resident become inaccurate in a way that may materially affect the interests of a resident of the village.

(2) Within 28 days after the scheme operator becomes aware of the inaccuracy or the circumstances causing the inaccuracy, the scheme operator must make a full written disclosure of the inaccuracy to the chief executive and to each resident who is, or is likely to be, materially affected by the inaccuracy.

Comment:- Whatever the intention of these Sections, the effect, especially of S.37(2), is to allow the contract (of which the PID is an integral part) to be varied from that which was originally given to the resident. This is not mitigated by the requirement at S.36(2) that the resident be notified. If these Sections were not meant to allow unilateral variation by the operator then they need to be redrafted.

PART 3  Division 2
Section 45 (1)(g)

Act recites:- A scheme operator must ensure each residence contract for the retirement village includes details about the following—

Comment:- This sort of distinction would be understood by a prospective resident as meaning that the resident did not pay for the insurance of the village, which is not true. The resident does pay, through the general services fee. If "and insurance for which the resident is responsible" is meant to refer to "contents" insurance then there is merit in drawing attention to the prospective resident’s responsibility for it in a PID, but it cannot be compelled and therefore has no place in a residence contract. (see also comments on S.110)

Division 4
Section 52(1)

Act recites:- A resident may terminate the resident’s right to reside in a retirement village by 1 month’s written notice given to the scheme operator.

Comment:- This provision would be meaningful only if terminating the "right to reside" also terminated the residence contract, entitling the resident to be paid the Exit Entitlement, which is not the case. Whatever the notice, the right to reside cannot be claimed to have been terminated so long as the ex-resident remains liable for on-going fees and has not been paid the Exit entitlement. An ex-resident would be perfectly entitled to resume residence. In leasehold tenures the operator does not terminate the registration of the lease until a new lessee is about to become a resident. As it is, S.52(1) and the expression "terminating the right to reside" are meaningless.

Section 54 (1)(b)

Act recites:- asking the operator to give the resident a written estimate of the resident’s exit entitlement as at the date of the notice.

Comment:-This should include "and exit fee", because exit entitlement is not a net figure. (Note. What the resident is actually paid is the exit entitlement less the exit fee.)

Section 57(b)

Act recites:- under the contract, the scheme operator has the controlling right to sell the right to reside in the unit;

Comment:- There is an inconsistency between this and the transfer of that right to the resident after six months, as provided by Section 64(2). (which recites: The former resident may engage a real estate agent to effect the sale of the right to reside in the accommodation unit)

Division 5
Section 58(1)& (2)

(2) For an existing residence contract, the former resident and the scheme operator are to negotiate in good faith and, if possible, agree in writing on any work that is to be done to reinstate the unit to a marketable condition having regard to (a) the age of the accommodation unit and the retirement village; and (b) the general condition of accommodation units comparable with the unit in the village.

Comment:- For new residents, provides that agreement between resident and operator is to be negotiated within 30 days after the termination date. (but see comments on S.52(1)) At S.58(2) there is no time frame for existing residents; we cannot see any reason for such distinction. Why must it be within 30 days after? Agreement can be attempted within a few days of the operator being notified of a resident’s impending departure, which means that it could be agreed before the resident actually leaves.

We do not see why those two sub-sections of S.58 should otherwise differ. Why "re-instatement to previous condition" for new residents and to a "marketable condition etc." for existing residents? Should it not be more to do with existing and new Units, rather than residents? There can be an existing resident in a fairly new Unit and a new resident in a quite old Unit. Our view is that the reinstatement should be as in 58(2)(a) and (b) for both existing and new contracts. However, this is subject to our overriding criticism at Section 62.

Section 58(3)

Act recites:- If the former resident and the scheme operator can not agree on the reinstatement work, the scheme operator is to obtain a statement of the work, and an itemised quote for doing the work, the operator considers to be reinstatement work from a qualified tradesperson appropriate for the work within a further 14 days.

Comment:- As it stands, this sub-section begs sharp practice. If the operator is able to obtain quotes then so too should be the resident. And operators should be required by the Act to furnish ex- residents with a copy of accounts and receipts for work done. Some operators are just requiring an ex-resident to pay an amount without any supporting justification for the work or evidence of it having been done and paid for. Section 58 is being largely ignored by some operators with no agreement attempted.

Legislation should require a condition report on entry, with written agreement of it by both operator and resident. Fair wear and tear should be specifically excluded from reinstatement costs chargeable to residents because it is not quantifiable. It is cumulative and one ex-resident should not be required to make good the wear and tear of years of earlier residencies. (see also comments on S.62)

Section 59(2)(i)

Act recites:- The scheme operator must ensure that the reinstatement work is completed within: (1) 90 days after the vacation date.

Comment:- The operator is allowed 90 days, which he may well take, after the resident has vacated the premises, to get the work done. This is completely outside the control of the resident who has nevertheless to continue paying unabated recurrent charges. Given a month’s notice of vacation, there is no good reason why the work should not start immediately upon vacation, or upon expiry of the notice if that is later. A further 30 days only should be allowed to get the work done.

Section 62

Act recites:- (1)(a) If a former resident’s interest is a leasehold interest or licence the cost of the reinstatement work must be paid by:- (a) to the extent that the former resident caused accelerated wear or deliberate damage to the unit—the former resident.

Comment:- Accelerated wear is a peculiar expression. What is it and how is it measured? The Act should be more to the point by referring to damage which is caused by the negligence or deliberate act of the former resident. (see comment at S.96)

Act recites:- (1)(b) if the residence contract states who is to make the payment – the person stated; or

Comment:- Turning to (1)(b), post 1/7/00 commercially run village contracts will almost invariably state who is to pay and it will always be the resident, just as it almost invariably is in existing contracts. That means that in practice there will be no "otherwise". We should retain only (1)(a), (c)(i) and (c)(ii), as (1)(a)(b)and (c).

Overriding these comparatively minimal changes, we are of the view that (apart from "accelerated wear") reinstatement, renovation, refurbishment should always be at the operator’s expense, payable from the capital replacement fund. As it is, operators are requiring ex-residents to re-decorate

and re-carpet, replace fittings and fixtures etc., whether or not it is necessary and to an extent that represents capital replacement and, often, capital improvement.

Section 63

Act recites:- (1) A scheme operator must pay the exit entitlement of a former resident to the person entitled to receive it on or before the sooner of –

Comment:- Neither this Association nor the residents whom it represents will ever be satisfied with legislation which allows an operator to keep residents’ in-going contributions indefinitely. As with

continuing payment of recurrent fees, we shall always insist that the waiting period should be capped and the operator obliged to return the in-going contribution at the end of that period. We think a further
sub-section should be added to Section 63 (1):

63(b) When the "right to reside is sold" has to mean that the operator has received payment from the next resident. Why should the operator be allowed twenty-eight days from then to pay what is due to the ex- resident? Why should the operator be allowed more than the time it takes to clear a cheque from the new resident?

Section 65 (2)

Act recites:- The scheme operator must promptly give to the former resident details of each offer to purchase the former resident’s right to reside.

Comment:- What are the details? They should include names and telephone numbers.

Section 65 (3)

Comment:- Omit: "if the former resident asks"

If an operator can be expected to supply information if asked, it should be made mandatory to supply it. Residents, ex-residents and the estates of deceased residents will mostly have no more idea of the provisions of Section 65 than of any other Section of the Act. To make the supply of information contingent upon a request for it is virtually to ensure that it is rarely given.

Section 64(1)&(2) and 68(2)

Act recites:- S.64: This section applies if --

Comment:- This is inequitable. If, after six months, an ex-resident retains a real estate agent to try to do what the operator has failed to do, then that should be regarded as a cost to be shared. This should be so for both existing and new residents. Subsection 68(4) should therefore be discarded.

In practice, this provision that a resident may retain a real estate agent is quite empty. Real estate agents generally are simply not interested in trying to market Units in a retirement village, and for very good reasons. And prospective residents do not usually go to real estate agents if they are considering becoming a resident in a retirement village. If they do, they can only be directed to a village or villages, the operators of which determine everything. What significant role can a real estate agent play?

PART 4
Section 78 (d) (Funds information to be given in public information document)

Act recites: details of he quantity surveyor’s report used to decide the percentage of the in-going contribution to be applied toward the capital replacement fund

Comment:- There is little point in giving a prospective resident details of a quantity surveyor’s report. What details, exactly? If anything at all needs to be stated it is what percentage of the in-going contribution is to be paid into the capital replacement fund. That is decided by the operator and reference to a surveyor’s report serves only to confuse the issue.

Section 78(e)

Act recites:- for existing residence contracts that provide for an amount from a resident’s services charges to be paid toward capital replacement, details of the amount as worked out by the scheme operator.

Comment:- This Part is about the information to be contained in the (new) PID. It should not, surely, try to encompass an existing residence contract, to which it does not apply.

Section 79 (facilities information to be contained in PID)

Act recites:- (79)(a) facilities the scheme operator undertakes to offer a prospective resident under a residence contract for the village.

Comment:- Delete "offer" substitute "provide" One cannot have a residence contract undertaking to offer. It must undertake to provide and failure to provide is a breach of contract. Provisions such as made by this Section are simply giving operators leeway to avoid commitment.

Act recites:- (79)(b) the facilities the scheme operator proposes offering a prospective resident under a residence contract for a retirement village, depending on sales activity, finance availability or market conditions for the retirement village (each a "contingency") and when they are proposed to be offered;

Comment:- This sub-section is full of uncertainties; contingencies which cannot be predicted and which may not arise. How can they be made part of a contract? And offers must also allow a right to refuse the offer. Such "contingent" provision of facilities can be described in the PID but must be accompanied by an accurate estimate of the consequent increases in the general services fee. Prospective residents will then be aware of what they are likely to have to pay in addition to the services fee as prescribed elsewhere in the PID. Operators have been known to charge residents services fees for facilities that have yet to be provided - for as long as a couple of years. And this is what 79(b) would allow operators to do. And the insistence by operators on this 79(b) is meant to allow just that.

A further sub-section should be added:

79 (d) In no circumstances may an operator make any charge upon residents in respect of facilities which have not been provided.

Section 83 (b) (Disputes resolution information)

Act recites:- how a dispute may be submitted to a village based dispute resolution panel, mediator or, in the last resort, the tribunal;

Comment:- (see also comment on Section 154). It is idle to assume that there will be a village based disputes resolution panel. Who will institute it? What will be the composition of the panel? If there is a substantial dispute between a resident, (much more likely to be residents), and the operator, it will not be resolved on site.

Mediation, as a compulsory step, is also most unlikely to resolve any thing of substance which involves many residents. The Tribunal should not be described as last resort because, much more often than not, it will be the only resort. It should be a matter of application to the Tribunal, the Chairman of which may, if he or she considers it likely to be efficacious, recommend a process of mediation.

To have obligatory mediation followed by Tribunal determination is likely very often to be wasteful of time and money. Nevertheless, lawyers for operators have already argued, successfully it seems, that a case could not be heard by the Tribunal because it had not first been to Mediation. The Act is allowing lawyers to quibble over trivial points of law; it should be changed to prevent that.

Section 83(c)

Act recites:- the fee for an application of a dispute to the tribunal for resolution

Comment:- Residents should not be charged fees. Going to the Tribunal will be no easy thing for most residents; it is most unlikely that there will be any trivial or vexatious applications. The fee, (two fees!) however modest they may seem, are enough to deter many impecunious residents.

Section 85

Act recites:- (1) A resident may ask the scheme operator to allow the resident to inspect, or take a copy of, a relevant document in the scheme operators possession or control.

Comment: All this Section provides is that a scheme operator must allow a resident to inspect or take a copy of (how?) the resident’s contract or PID. This will only be necessary if the resident has lost his or her own copy; a most unlikely occurrence. Why should a fee be prescribed under a regulation? If a regulation is to provide anything it should be that no fee may be charged.

PART 5  Division 3
Section 90(4)

Act recites:- Also, if (a) retirement village residents, by special resolution at a residents meeting, vote to give the scheme operator a written request for another type of capital improvement to the village; and (b) the operator makes or agrees to make the improvement, all the village residents when the vote was taken are jointly and severally responsible for the cost of the capital improvement.

Comment:- This is not beyond challenge. Unless there were unanimous agreement by residents to the improvement, it is doubtful that residents could be required to pay for something which is not in their contract, of which they were not aware when they entered the village, which they do not want to have, or pay for, simply as a result of the vote of others, notwithstanding what is in this Act.

Apart from that we do not believe that there should be any dilution of the operator’s responsibility for capital improvement as stated in S.90 (1).

Divisions 4 & 5

The establishment of the Capital Replacement and Maintenance Reserve funds obviate any need for "special levies". Nevertheless, many existing contracts and, probably, some post 1/7/00 contracts, contain provision for special levies. Sooner or later, some operators are going to attempt to impose a special levy to pay for something or other. The legislation should quite clearly proscribe special levies.

Section 91(3)(a) (capital replacement)

Act recites:- replacing the village’s capital items; or

Comment:- It must be made clear that the financing of replacement of capital items by way of leasing, hire purchase or other financial arrangements is to be charged to the capital replacement fund and not to residents’ funds. We should like to see 91(3)(a) amended to read:

"replacing the village’s capital items which includes replacement by leasing or other financial arrangements; or"

This will give greater significance to S. 97(4)(b) and S. 103 (3).

Section 94(1)(d)

Act recites:- if an existing residence contract requires an amount from a resident’s services charges to be paid towards capital replacement--

Comment:- We are implacably opposed to residents, existing or new ones, being required to contribute to the Capital Replacement fund. This subsection should be entirely removed because it is at variance with Section 91(2), which expresses what was supposed to be the whole essence of capital replacement responsibility.

Section 96

Act recites:- This section applies if a capital item of a retirement village is—
(a) deliberately damaged by a resident; or
(b) subjected to accelerated wear caused by e resident’s actions.

Comment:- Sub-section (b) should be removed and sub-section (a) amended to read: "deliberately or negligently damaged by a resident". (see also comment on S.62(1)).

Section 98 (Maintenance Reserve Fund. There is too much in this Section to recite here)

Act provides:-
(1) The quantity surveyor is instructed by the operator.
(2) The scheme operator decides the amount of the maintenance reserve.
(3) The operator is to be able to increase the contribution as he determines
(6) The scheme operator may adjust the contribution annually

Comment:- This is dealing with residents’ money, funds they contribute, but this Act nevertheless denies them any input or involvement in the decision making processes. As with general services charges, it is unacceptable that residents be excluded from budgetary processes. Furthermore, surveyors seem generally to have allowed for increasing costs, usually 3% per annum. There is already a mechanism, the Consumer Price Index, by which allowance can be made for inflationary and deflationary movements in costs. Operators should be instructed to discount the inflationary allowance in surveyors’ figures and the CPI allowed to operate instead. That would be eminently more satisfactory.

Some operators, to their credit perhaps, are partly disregarding the surveyors’ recommendations and requiring residents to pay less, for the time being at least, than recommended. But what of future provision? This whole question of surveys has been poorly managed by just leaving it to the operators and by failing to provide any criteria or prescribe any conditions for the conduct of the surveys or any indication of what is a charge to which fund.

Section 98(1)

Act recites:- Before the scheme operator decides a budget under section 99, the operator must obtain an independent quantity surveyor’s written report about the expected maintenance and repair costs for the village for the next ten years.

Comment:- The purport of this is to require a surveyor’s report every year. This cannot have been intended. New surveys should be necessary only at intervals of several years. Any adjustments to financial provision are provided for by S.98 (6). There is a penalty of 540 points if an operator fails to observe this absurd annual requirement of the Act.

Section 99 (example) (maintenance reserve fund estimates)

Act recites:- "…. And so the second year levy will be…." "….a levy of $1,300 is necessary …."

Comment:- The word levy has an undesirable connotation; it smacks of special levies for which this Act does not provide . We would prefer the word "provision". The examples should be removed because that sort of increase should be covered by the CPI and it would be wrong to seem to be encouraging other increases in excess of the CPI.

Division 6
Section 102

Act recites:- If a resident of a retirement village who is liable to pay a charge for personal services vacates the village, the scheme operator must not levy the charge against the resident for more than 28 days after the resident vacates the village

Comment:- This will make 28 days a target rather than a limit. The personal charge is likely to be for laundry, meals and housecleaning. The supply of such services does not have to continue after the resident leaves the village, or dies, and the cessation of their need is immediately apparent. Residents should not have to continue paying for them after their need has ceased and any overcharge which may have arisen from advance payments should be refunded.

Division 7
Section 103

Act recites:- (3) The scheme operator must not include, or provide for, in a residence contract in the charge for general services an amount or component , however described, that is payable for or towards replacing the retirement villages capital items.

Comment:- Capital replacement should not be charged to residents, new or existing, and this sub-section should be expunged. see also comment at S.94(1)(d).

Section 104(1)

Act recites:- A former resident of a retirement village is responsible for the resident’s proportion of the general services charges after the resident vacates the unit until the first of the following happens--
(a) The right to reside in the unit is sold.

Comment:- Residents will not be satisfied with legislation which does not limit a resident’s continuing liability for general services charges after vacating the Unit.

Add: (d) a date which is six months after the date on which vacant possession was delivered to the operator.

Section 104 (3)

Comment:- contrary to what is stated at sub-section (3), sub-section (1)(a) does apply to existing residence contracts

Section 104 (5) (interest on unpaid services etc. charges accrued after leaving village)

Act recites:- A scheme operator must not charge interest on the accrued amount.

Comment:- We believe that this was meant to apply to all contracts from 1 July 2000; that for existing contracts in which interest was being charged on accumulating fees, that interest would cease being added at 1 July 2000. The wording of this sub-section would allow argument that it did not apply to pre 1 July 2000 contracts. We believe the wording should be changed to exclude the possibility of such argument.

Section 106 (increasing general services charges in excess of CPI)

Act recites:- (S.106(4): For applying this section, the percentage increase in the CPI for a particular year is the percentage increase between the CPI last published before the start of the particular year and the CPI published for the quarter ending immediately before the residents meeting is held.

Comment:- This Section is really too imprecise. What is a "particular year"? is it a calendar year, a financial year or any period of twelve months? The least acceptable, because of its ability to be manipulated, is period of twelve months. As calendar year is immutable it is to be preferred.

Section 108

Act recites:- A scheme operator may offer residents a service not already supplied under a scheme, for which a services charge is to be, or may be, made, only if residents agree to it being supplied by special resolution at a residents’ meeting

Comment:- See our comment at S.90(4)..There ought, we believe, to be included here:

Division 8
Section 110(1)

Act recites:- A scheme operator must insure and keep insured. To full replacement value, the retirement village, including the accommodation units, other than accommodation units owned by residents, and the communal facilities.

Comment:- This leaves a loophole for operators to swing responsibility for insuring the fixtures and fittings in accommodation Units on to residents personally. Indeed, a village operator persuaded his insurance broker to write a letter declaring that the fixtures and fittings were part of the residents’ "contents". When challenged by residents, that claim was very quickly retracted by the broker. The motive was to try to establish support for the claims by operators that replacement of fixtures and fittings are the personal responsibility of residents .( See also our comments on "capital items" in the Dictionary). This sub-section should be amended to read:

"….including the accommodation Units and all fixtures and fittings contained therein, other than….."

Section 110 (2) ( what an insurance policy must cover)

Comment:- Insurance must cover the cost of alternative accommodation or compensation for a resident whose Unit is rendered wholly or partly uninhabitable as a result of an insurable event.

Division 9
Section 112(1)

Act recites:- A scheme operator must ensure a quarterly financial statement about the income and expenditure of the capital replacement fund and the maintenance reserve fund is given, on request, to a resident.

Comment:- As it stands, operators will, and do, decline to give residents more than just a statement of amounts spent. Residents need to know exactly what their maintenance reserve funds are spent on. They should be able to ensure that their MRF is not being improperly charged with what should be operational expenditure, or what should be a charge to the Capital Replacement fund. This is happening. Accountability to residents must be made more stringent and financial statements must contain or be accompanied by a full analysis of expenditure. Residents must be given the right to question and demand answers.

This Section should also require that similar statements in relation to the General Services fund be supplied on request and that they be similarly detailed.

Section 113

Act recites:- A scheme operator must ensure a financial statement showing the following particulars about the retirement village’s operation is given, on request, to a resident within 5 months after the end of each financial year—

Comment:- These financial statements should not be supplied only upon request, they should be sent to every resident together with the notice of annual meeting. (see comments on S. 131). We can see no good reason why residents should have to wait five months for such information in respect of their funds. We believe that it should be available after no more than three months.

PART 7  Division 1
Section 127 (4)

Act recites:- The scheme operator may address the residents at a residents committee meeting

Comment:- This is curiously worded; only the residents’ committee can be addressed at a committee meeting. But in any case it is anathema for residents. This sub-section reinforces an operator’s opportunity to intimidate or coerce residents, more particularly a residents’ committee. An operator’s or manager’s presence at any sort of residents’ ordinary or committee meeting should be only by invitation. In no circumstance should an operator have a right to address a residents’ committee. If a scheme operator wishes to inform residents there are the mail-boxes. If he wishes to address residents at a meeting it must be a meeting for which due notice has been given. If a decision of residents is required then it requires a special resolution, which means there must be 21 days notice, with details of any proposal to accompany the notice.

Section 128 (1)

Act recites:- The residents of a retirement village may, by a majority vote of the residents at a residents’ meeting, adopt a constitution.

Comment:- We do not like the use of "constitution". Some residents and their committees take that as meaning that they have to become an Incorporated Association. Residents do not need that. We suggest that it read: "adopt rules, regulations or standing orders in accordance with which meetings of residents and committees are to be conducted" . Appropriate changes to be made to (2) and (3)

Section 128(2)(b)

Act recites:- must provide for a matter prescribed under a regulation

Comment:- What matter ('s) prescribed under what regulation? How are residents to know?

PART 7  Division 2
Section 130(6) ( making, changing and revoking village by-laws)

Act recites:- Subsection (3) does not limit the residents’ power under another law to make change or revoke by-laws

Comment:- If residents have such power under another law then that law or laws should be identified. How else are residents to know and be able to exercise that power?

PART 7  Division 3
Section 131

Act recites:- (1) In each year, a scheme operator must call an annual meeting of the residents of the retirement village as soon as reasonably practicable after the annual financial statements mentioned in section 113 are available.

(4) The scheme operator must present the statements to the meeting

Comment:- This is an unacceptable diminution of the degree of accountability provided by the 1988 Act, which did at least refer to "another Act" prescribing for the holding of general meetings. That provision (S. 48(4)) enabled residents to insist that copies of the audited accounts to be presented should accompany the notices of meeting. If residents are to have any meaningful involvement at all

then the audited statements must accompany the notice of meeting, so that residents can have time to study them and formulate questions or comments. (See also comment on S.113.)

Section 131(2) add:
"… which notice shall be accompanied by a copy of the financial statements to be presented."

Section 132(1)

Act recites:- A scheme operator or a residents committee or sub-committee of a retirement village may, by 14 days written notice given to each resident of the village, call a meeting of all the residents.

Comment:- The authority of a committee or sub-committee is to be decided by residents; that common law power should be reinforced, not subverted, by legislation. If the operator wishes to impart information to residents it can be done via mailboxes. If it is a matter of residents making a decision then that is a special resolution requiring 21 days notice. ( see comments on Section 127)

Section132(2)

Act recites:- However, in extraordinary or urgent circumstance, the scheme operator or the residents’ committee or sub-committee may call a meeting of the residents by giving each resident the written notice of the meeting that is reasonable in the circumstances but not less than 2 days.

Comment:- As remarked above, deciding what a sub-committee may or may not do should not be in this legislation. If a committee calls a meeting at short notice then it has to account to the residents for its action; that is how it should be. In no circumstances should this legislation give operators a right to call meetings at short notice. If an operator wishes to have a meeting at short notice he can do so via the Committee, which can ensure, on residents’ behalf, that the meeting and short notice is justified and that it is not an attempt to circumvent the notice required for a "special resolution".

General comment:- This division is supposed to be concerned with meetings of residents and their rights to meet and hold discussions and debates yet its whole thrust is to put more control over residents in the hands of the operator; increasing the operator’s ability to intimidate and coerce. It is what operators and managers, with some honourable exceptions, actually attempt to do and unless there are some residents willing to protest, they get away with it. This is not alarmist comment, this is what investigations have revealed and there is plenty of anecdotal evidence.

This division should provide that operators or their agents or employees are not residents, may not be members of residents’ committees and may not attend meetings of residents or of residents’ committees except by invitation. Some operators or their managers actually install themselves on residents’ committees and dictate what is or is not to be discussed at meetings of residents or of their committees. This is what happens; it must be stopped.

PART 7  Division 4
Section 133(1)

Act recites:- A resident of a requirement village may by signed notice give a scheme operator or another resident of the village a power to vote for the resident by way of proxy vote at a specific residents meeting stated in the notice

Comment:- This is another opening for operators or managers in non-freehold villages to attempt to coerce residents. Because it is so easily manipulated, we are opposed to proxy voting . In no circumstances should a scheme operator be allowed to exercise a proxy for a resident. We should like to see S.133 (1) & (2) replaced as follows:

(1) Except as provided by the Body Corporate and Community Management Act, 1997 in respect of freehold villages, proxy votes may not be exercised.
(2) "An operator must not in any way attempt to influence the voting intentions of a resident."

There should be a penalty for a breach. Subsection (2)

PART 8 (Powers of inspectors)

Comment:- The 1988 Act (Section 46) required operators to keep adequate records at a place in Queensland and the power of Inspectors was therefore soundly based; in theory though not in practice. More and more, the proprietorship and financial and other records of commercially operated villages in Queensland are being vested in another State. Which is no doubt why the 1988 provision was discarded and not required by the 1999 Act. The powers which inspectors have to enter places and seize things are surely not exercisable in other States. Without the provisions of Section 46 of the 1988 Act, did not Part 8 of the 1999 Act become largely unenforceable and a dead letter as soon as it became law?

Section 139(2)

Act recites:- For the purpose of asking the occupier of a place for consent to enter, an inspector may, without the occupier’ consent or a warrant—

Comment:- Some concern has been expressed that this Section gives an Inspector power of entry upon a resident’s Unit. A further sub-section should be added to allay that fear:

"This Division does not give an inspector a power of entry into or upon the residence of a bona fide village resident"

PART 9  Division 1
Section 154

Act recites:-
(1) The parties to a retirement village dispute may refer the dispute to a mediation process under this part only if the parties have attempted to resolve the dispute under this section.
(2) A party to the dispute (the" first party") must give the other party to the dispute (the " second party") written notice—
(a) stating the matters in dispute, and
(b) nominating a day, no earlier than 14 days after the notice is given, (the "nominated day") for the parties to meet within the village to attempt to resolve the dispute.
(3) The second party must give the first party a written response to the notice within 7 days after receiving the notice.
(4) On the nominated day, or another day within 7 days after the nominated day and agreed by the parties, the parties must meet in the retirement village and attempt to resolve the dispute.

Comment:- Nothing could be better designed to ensure that residents do not dispute anything. Is a very elderly resident really to be expected to follow such an unnecessary train of requirements? Insistence on such protracted procedure will serve only to put residents off, thereby denying them a hearing. Redress for aggrieved residents must be made as easy, not as difficult, as possible. (See also our comments on Section 83).

PART 9 Division 3
Sections 157 & 158 ( Mediation procedures) see our comments on mediation at Section 83

Section 159

Act recites:- At a mediation conference, a party to the retirement village dispute may be represented by a lawyer or an agent unless the mediator is satisfied the party should not be represented.

Comment:- It is our view that lawyers should not take part in a mediation hearing. Mediation is a matter of arriving at an equitable solution to a problem, not a field for legal argument

Section 162

Act recites:-
(1) A mediator may allow a person to take part in a mediation conference if the mediator is satisfied the person has a sufficient interest in the resolution of the dispute.
(2) However, the person does not become a party to the dispute.

Comment:- It is difficult to see how a resident can have a sufficient interest in the resolution of a dispute without being, to all intents and purposes, a party to it. Any dispute taken by a resident to the Tribunal will almost inevitably be on behalf of a much larger body of residents. (see also comment on S.177)

PART 10  Division 1
Section 166 (b) (Tribunal application fee)

Act recites:- accompanied by the fee prescribed under a regulation

Comment:- residents should not be charged fees. (See our comments at Section 83)

PART 10  Division 2
Section 167(a)

Act recites:- A party to a retirement village dispute may apply to the chief executive to refer the dispute to a tribune if-
(a) the parties to the dispute can not reach a mediated agreement to the dispute

Comment:- As we have remarked already, mediation should not be a mandatory prelude to a Tribunal hearing. As will now be apparent to the Tribunal chairman, there is far too much that is not susceptible to mediated solution

Section 171(1)

Act recites:- This section applies if-

Comment:-
(a) After what period of non-compliance by the operator may a resident pursue this course? The Section is not very meaningful without such definition.
(b) In what circumstances is a resident likely not be materially prejudiced by not being paid the Exit entitlement?

PART 11  Division 1
Section 177 (2)

Act recites:- However, a person may attend the tribunal’s hearing with the agreement of the tribunal and the parties to the issue.

Comment:- We fear that because many residents may have an interest in a case, the operator or lawyer for the operator may not agree to a resident who is not an applicant being present. We should prefer that a decision as to who may be present be solely within the gift of the Tribunal.

This Part must allow the bringing of class actions by residents by providing for representative action by a resident or residents on behalf of a larger number of residents where there is an identity of interest; such identity of interest to be adjudged by the Tribunal Chairman. The Act does not at present provide for such actions but unless it is made so to provide, operators’ lawyers may be able to argue that, despite commonality of interest, residents must bring individual cases. That would be a deplorably time wasting effort by them to restrict the wider and sensible application of the Tribunal’s findings.

DICTIONARY

"capital items" this should be expanded to make it clear that all fixtures and fittings are included as part of the capital items replaceable at the expense of the capital replacement fund.

This is doubly important because there is a concerted trend by operators and their lawyers to try to make residents personally responsible for the replacement of any fixtures and fittings within their Units. Because of the lack of precision of successive Acts, and lack of scrutiny by the Registrar of Retirement Villages, personal responsibility of the resident for the repair and replacement of the owner’s property features in many lease agreements, often by the device of PIDs stating that things such as lights, fans, hot water systems, screen doors, stoves etc. etc. are "tenants fixtures". (see also our comments on Insurance) We are totally opposed to the notion that anything which is in the Unit when a resident takes up residence is other than the property of the scheme operator.

ARQRV May 2001