Western Australia

1. Legislation

Retirement villages in Western Australia are regulated by specific legislation, being the:

• Retirement Villages Act 1992 (WA);
• Retirement Villages Regulations 1992 (WA); and
• Fair Trading (Retirement Villages Code) Regulations 2009 (WA), which prescribes the Code of Fair Practice for Retirement Villages 2009 (WA).

Under this legislation, a memorial in a form approved by the Registrar of Titles must be registered against any land which is to be used for a retirement village. You should check that any village you are considering moving into has this memorial registered against its title.

The retirement villages legislation applies to:

• residents, prospective residents and former residents of retirement villages; and
• the owners and operators of retirement villages (referred to in the legislation as administering bodies).

Retirement villages with 'freehold' title (see Item 3) are also regulated under the Strata Titles Act 1985 (WA).

General 'fair trading' legislation also applies to retirement villages in Western Australia. This includes the:

• Fair Trading Act 2010 (WA); and
• Competition and Consumer Act 2010 (Cth).

The above legislation is available at www.slp.wa.gov.au apart from the Competition and Consumer Act 2010 (Cth), which is available at www.comlaw.gov.au.

2. Information you must receive

At least 5 working days before you sign any contracts to enter a retirement village, you must be given:

• a copy of any contract you must sign to become a resident (see Item 4);
• a Form 1 Information Statement in the form prescribed by the Western Australia Government, containing village information such as the accommodation offered, the costs and fees residents must pay, the facilities available for residents' use, the rights and obligations of residents and other information;
• a Form 2 Notice of Rights in the form prescribed by the Western Australia Government, setting our your rights under the legislation;
• a copy of the residence rules (see Item 10);
• a copy of the Code of Fair Practice for Retirement Villages 2009 (WA);
• copies of the village's financial statements for the previous financial year and the proposed budget for the current financial year; and
• for freehold villages, a copy of the strata by-laws and an authority to obtain certain information about the village strata scheme from the strata company.

Comparing the documents provided for different villages will assist you to choose which village you want to live in.

3. Types of retirement villages

Retirement villages differ in relation to the types of title that residents obtain when they purchase a right to reside in the village. The most common types of title are:

• freehold (where you purchase the legal title to the unit and occupy the unit as its owner );
• leasehold (where you sign a long-term lease over the unit - generally for a term of 99 years); and
• licence (where you sign a contract that gives you a long-term right to occupy a unit in the village).

There are various other (less common) types of title, such as company share title and title arising from a unit trust.

You should seek legal advice about which type of title is best for you.

4. Contracts you will be required to sign

If you decide to move into a retirement village, you will be required to sign 1 or more contracts which will:

• give you a right to reside in the unit you have chosen;
• give you a right to use the shared village facilities and to access the services provided at the village;
• set out your rights and obligations while living in the village as a resident and the fees and charges you must pay; and
• set out what will happen when you leave the village.

There is no standard or prescribed form of residence contract in Western Australia, so the terms of the residence contract will differ between villages and will depend upon the ownership and management structure of each village.

The contracts you sign will usually be:

• for freehold villages - a contract of sale to purchase your unit from the current owner of the unit, a management agreement or services agreement setting out your rights and obligations while living in the village and an absolute caveat over your unit to secure the administering body's right to receive the fees you are obliged to pay;
• for leasehold villages - a lease for a term of 99 years; or
• for licence villages - a contract giving you a long-term right to occupy your unit.

Any contract under which you obtain the right to occupy your unit (ie a lease, licence or contract to purchase a freehold unit) is called a residence contract. Any contract with the administering body that sets out the services you will receive at the village is called a service contract.

Additional contracts may be required depending on the village - for example, you may have to sign a separate licence if you wish to secure the use of a garage, car space or storage locker at the village.

5. Premium/purchase price

You will usually have to pay a one-off lump sum to secure your right to reside in the unit. This will take the form of either:

• for leasehold and licence villages - a premium paid to the administering body; or
• for freehold villages - the price of the unit you purchase from its current owner (either the administering body or the current resident who wants to sell their unit).

Any premium you pay under a residence contract must be held in trust by an authorised trustee until you either move into your unit or it becomes apparent that you will not proceed with moving into the unit.

If you need to sell your existing home in order to pay the premium or purchase price the administering body or current resident (as the case may be) may agree to make your residence contract conditional upon you selling your existing home first.

6. Stamp duty

There is generally no duty for leasehold or licence villages but you will have to pay duty to the Office of State Revenue to purchase a freehold unit. The amount of duty will vary depending on the purchase price.

7. Cooling-off period

After signing a residence contract you have the right to cancel it and receive a refund of all monies paid under the contract within a cooling-off period of :

• 5 working days, starting on the day the residence contract is signed by the last party to sign it; or
• if you do not receive the documents required to be given to you before you sign the contract (see Item 2) within the required time, 10 working days starting on the day the last of those documents is given to you.

Your cooling-off period is waived if you move into the unit before it expires.

8. Your rights and obligations

Your residence contract will set out most of your rights and obligations while living in the village.

Other rights and obligations are set out in the legislation, including:

• the administering body's obligation to set the recurrent charges payable by residents in each financial year in accordance with a budget (see Item 9);
• your right to enforce your residence contract against a new administering body of the village if the ownership or management of the village changes; and
• your right to receive certain information about the village's financial affairs.

9. Fees and charges you must pay

While living in the village you will be required to pay to the administering body certain fees for the services and facilities the administering body provides. These charges include:

• recurrent charges, which are recurrent (eg monthly or fortnightly) charges you pay as a contribution to the costs of operating and maintaining the village, such as the costs of providing the common services and facilities and carrying out required maintenance; and
• charges for any personal services you have chosen to receive individually (such as laundry, unit cleaning or the provision of meals).

The recurrent charges for each financial year will be set at the beginning of the financial year in accordance with a budget.

If you are considering moving into a village that is still being developed and not all units or community facilities will have been built by the time you move in, you should check the residence contract to see how this will affect the amount of the recurrent charges you will be required to pay.

In much the same way as if you owned a home, your residence contract may also require you to pay for:

• the costs of maintenance, repairs and replacements for your unit and items inside the unit; and
• any services separately provided to your unit, such as water, telephone and electricity.

For freehold villages you must also pay levies to the strata company under the Strata Titles Act 1985 (WA), as well as local council rates and water charges payable for your unit.

10. Residence rules rules

Each village must have a set of 'residence rules' covering the rights and obligations of residents (eg about disposal of refuse, noise, parking of motor vehicles etc) with which the administering body will expect the residents to comply. The legislation requires you to comply with those rules.

If the administering body changes the residence rules, it must give every resident a copy of the changed rules.

11. Resident input and participation

Residents may hold their own election and form a 'residents committee' for the purpose of consulting with the administering body on behalf of the residents about the day-to-day running of the village and any issues or proposals raised by the residents.

If a village has a residents committee, the committee has the right, on reasonable grounds, to require the administering body to convene a meeting of the residents.

The administering body must hold an annual meeting of the village residents at the end of each financial year to present the village accounts for that year and to present and discuss the budget for the upcoming year.

12. Dispute resolution

The legislation and your residence contract sets out the process for resolving any dispute you may have with the administering body.

You must first attempt to resolve the dispute informally.

If the dispute remains unresolved, you may apply to the Commissioner for Consumer Protection to appoint a mediator to assist you and the administering body to reach an agreement. If an agreement is still not reached, you may apply to the State Administrative Tribunal for a hearing. The Tribunal may make a range of orders after hearing the dispute.

13. Terminating your residence contract

If you wish to terminate your contract and leave the village, your contract will set out the process for doing so. This process will involve:

• for freehold villages - selling the unit; or
• for leasehold and licence villages - terminating your lease or licence in accordance with its terms..

Generally, for leasehold and licence villages, the administering body may terminate your contract and require you to leave the village only if it obtains an order from the State Administrative Tribunal. Such an order may be granted only on certain limited grounds set out in the legislation - for example, if you cause or permit serious damage to your unit or injury to a person in the village or breach your contract or the residence rules.

14. Repairs/refurbishments to your unit

When you terminate your residence contract and leave your unit, your contract may require that you pay the cost of repair or refurbishment works to the unit in order to assist in it being marketed to prospective new residents.

If so, the administering body must perform that work and before doing so, must give you a cost estimate before commencing the work and a fully itemised costing once the work is completed. You are not obliged to pay your share of the cost of you have received this itemised costing.

For freehold villages the resident is usually required to pay all of the costs of the repair or refurbishment work. For leasehold or licence villages the resident is usually only charged a proportion of the costs - for example, the proportion of the 'capital gain' that the resident is entitled to receive when a new resident purchases the right to occupy the unit (see Item 16).

15. Finding a new resident

Your contract will set out the process that will apply for finding a new resident for your unit, including any rights you have to appoint a real estate agent. You may be required to pay a fee to the administering authority for performing work to assist in finding a new resident.

Where you appoint the administering body to market the unit, the administering body must take all reasonable steps to enable the unit to be placed on the market as expeditiously as possible and then provide you with monthly written marketing reports. Your residence contract may permit the administering body to set the price at which your until may be sold - usually, the price will be the current market value of your unit.

16. What you will receive when you leave the village

For leasehold or licence villages, your contract will usually give you a right to receive a refund of your premium. You may also receive a share of the increase in the value of your unit since you first moved in - known as the capital gain.

If you have a right to receive a refund of your premium, that right is protected by a 'charge' on the village land created by the legislation which prevails over most other interests in the village land. Depending on the terms of your residence contract, you may have the right to lodge a caveat over the village land to further protect your refund rights.

Your residence contract will specify the time within which the administering body must refund your premium. Under the legislation this cannot be any longer than:

• 7 business days after a new resident moves into your unit, if the unit is to be re-marketed to prospective new residents; or
• 45 days after you cease to reside in the unit, if the unit is not to be re-marketed to prospective new residents.

For freehold villages you will not receive a refund of a premium from the administering body as you will have paid a 'purchase price' to purchase the unit, rather than a premium. However you will be able to sell your unit to a new resident who the administering body approves. The new resident will pay you the agreed purchase price for the unit and that price will be paid to you when you settle the sale with the new resident.

17. What you must pay when you leave the village

Your residence contract will specify any amounts you must pay to the administering body when you leave the village. The most common payments are:

• a deferred management fee (which will be calculated in the way set out in your residence contract);
• for freehold villages - a share of the capital gain;
• repair or refurbishment costs (see Item 14);
• any sale or marketing fees or costs you must pay under your contract;
• any unpaid services charges (including any services charges accruing after you have left the unit that your contract says you are responsible for);
• administration fees; and
• legal fees.

For leasehold or licence villages, these payments will be deducted from, or set off against, the refund of the premium and any capital gain share you receive. For freehold villages, the administering authority will require you to make these payments out of the purchase price you receive from the new resident.

18. Websites

The Consumer Protection division of the Department of Commerce is responsible for the regulation of retirement villages in Western Australia. More information about retirement villages can be obtained from the Department's website at www.commerce.wa.gov.au.

The State Administrative Tribunal has jurisdiction for retirement village disputes. For information about the Tribunal, visit www.sat.justice.wa.gov.au.

For information about stamp duty, see the Office of State Revenue website at www.osr.wa.gov.au.