Retirement village reforms operator presentation and FAQs

1. When will the final regulations be available to review?

Publication of the new regulations is expected to be before 1 September 2026 and will be available on State Law Publisher. 

2. For new reforms commencing from 1 September 2026, do contracts require amendment to include new requirements (i.e. aged care rule and mandatory exit entitlements) or does the new legislation override any existing contract?

The new mandatory exit entitlement and buyback requirements and aged care rule will over-ride existing contracts. Operators may elect to change contracts to make the new laws clear, while others may decide that such changes are not required. Consumer Protection recommends that you obtain legal advice to discuss the best approach for your villages.

3. When does the 12 month period for payment of exit entitlements commence?

The 12 month mandatory period for operators to pay an exit entitlement commences from the date of permanent vacation of the resident from their former home.

4. In a strata-titled village, does the exit entitlement payment need to be paid within 12 months after the resident permanently vacates?

If you are operating a strata titled village, residents will receive proceeds from the sale of their unit rather than an exit entitlement. 

When a resident permanently vacates their strata titled unit, the operator has 12 months to resell the unit or enter into a contract to buyback the unit from the departing resident. A buyback must be completed no later than 12 months from permanent vacation of the departing resident. 

5. What happens if the operator is unable to pay the exit entitlement or buyback when it is due?

If you are experiencing difficulties, you can apply to the Commissioner for Consumer Protection (Commissioner) for an extension of time of up to 12 months to pay an exit entitlement or complete a buyback in relation to a particular resident. 

6. If a resident permanently vacated their unit before the 1 September 2026 (e.g. in 2025), when is their exit entitlement due?

The 12 month transition period for payment of exit entitlements and completion of buybacks commences from 1 September 2026. 

Example 1 – resident permanently vacates before 1 September 2026 (i.e. 1 Dec 2025)

The latest date the resident must receive their exit entitlement or have a buyback of their former home completed is 1 September 2027. 

Example 2 – resident permanently vacates after 1 September 2026 (i.e. 2 Feb 2027)

The latest date the resident must receive their exit entitlement or have a buyback of their former home completed is 12 months from 2 February 2027, being 2 February 2028. 

7. What is meant by ‘permanent vacation’ of a resident from their unit in a village?

Permanent vacation is when the resident permanently moves out of the home. A resident has permanently vacated when all of their belongings have been removed from the home and the keys returned to the operator.

8. Is an operator required to contribute to payment of a Refundable Accommodation Deposit (RAD) from a former resident’s exit entitlement?

No. The new legislation, in regulation 43(1)(c), provides that the operator can only be required to make daily accommodation payments (DAPs) for aged care from a former resident’s exit entitlement. 

9. Is a resident who applies for aged care by a mixed method of RAD and DAP, eligible to require their operator to pay for their aged care from their exit entitlement?

The legislation does not preclude a former resident from choosing to pay for their aged care by a mixed method of RAD and DAP. However, the operator is only required to pay DAPs. The operator is not required to contribute to the payment of a RAD from the former resident’s exit entitlement. 

10. Are operators required to get consent to the budget from residents?

No. There was consultation on this issue, however the government determined that operators would not be required to get consent to the budget from residents. 

The new laws require operators to engage in genuine consultation with residents through the introduction of the new budget preparation meeting. This meeting ensures residents have the opportunity to provide input and feedback on the draft budget papers.

11. Can the new budget preparation meeting be held with the Residents’ finance sub-committee?

Yes. New regulation 26 requires that before 1 April each year, an operator must, if a village has a residents’ committee (or finance subcommittee), give written notice of the right of residents to attend and participate in the budget preparation and budget finalisation meetings. If there is no committee, the operator must provide notice to all residents. 

The operator can determine the format of this meeting, and this will depend on the size, structure, and characteristics of the village. Regardless of the approach, the operator must give all residents the opportunity to provide feedback on the budget and participate in the consultation process. 

12. Can the new budget preparation meeting be included as an agenda item to an existing committee meeting in the village, or does it have to be a standalone meeting?

No. It must be a standalone meeting, in accordance with new regulation 28, the only business that can be transacted at the annual budget preparation meeting is the operator’s consultation with residents about, and receipt of residents’ feedback on, the budget documents. 

Operators must hold this meeting before 1 May each year, and at least 30 days after giving notice of it to residents. 

13. What level of detail needs to be provided in the budget papers? Do residents need to be provided with invoices for specific items? 

The Fair Trading (Retirement Villages Code) Regulations 2022 (RV Code) in clause 17 sets out the requirements for village budgets. These requirements have been transferred to the new regulations and there are no substantive changes to the level of detail required in the budget papers, other than changes to terminology (i.e. references to ‘reserve’ funds now replaced with capital maintenance and capital replacement budgets). 

New Regulation 27 provides that the budget documents for a financial year include:

• the operating budget
• capital maintenance budget (when it comes into effect)
• capital replacement budget (when it comes into effect)
• any document used to prepare or necessary for the resident to understand the proposed budget (i.e. capital maintenance and replacement plan)
• any document that might reasonably be expected to be made available to residents (i.e. accounts of actual expenditure and an explanation of proposed changes to charges etc). 

As per the current requirements, budget papers should also be accompanied by notes that disclose:

• the calculation of recurrent charges and the method for any contribution of funds to the capital maintenance fund
• separate amounts for the auditor’s remuneration according to audit and non-audit services
• fees for management and administration services to residents according to each of the specified amounts.

14. When must the operator provide residents with a final copy of the budget papers?

New regulation 27 provides that on or before the day on which an operator gives written notice of the right of residents to attend the next budget preparation and annual budget finalisation meeting, the operator must give each resident the budget documents for the next financial year. This requirement to provide the budget papers precedes the budget meetings. This means that there may be some changes to the budget papers that residents are given, with an opportunity for residents to discuss the changes at the budget preparation and/or budget finalisation meeting. The resident may request a final copy of the budget papers for their records, but there is no legislative requirement for operators to provide a final copy to all residents. 

This is a change to what is currently required in the RV Code. Clause 17 currently provides that the village budget for a financial year must not be finalised until each resident has been given a minimum of 10 working days after service of the notice under subclause 17(2) to consider the budget documents.  From 1 September 2026, the RV Code will be repealed, meaning that clause 17 will no longer exist.

15. Is there still a requirement to provide budget versus actual reporting for quarterly and annual financial statements, and commentary explaining expenditure variances greater than 10%?

The final Regulations will clarify that the quarterly financial statements must – 

• present information in a way that is consistent from one quarter to the next; and 
• include a separate line item for each of the specified amounts; and
• if the budget documents for the financial year detail proposed expenditure for each quarter — include a written explanation for any variations of 10% or more between — 
  • actual expenditure; and 
  • the proposed expenditure.

The final Regulations will also clarify that the annual financial statements must – 

• present information in a way that is consistent from one quarter to the next; and
• include a separate line item for each of the specified amounts; and
• include a written explanation for any variations of 10% or more between — 
  • actual expenditure; and 
  • the proposed expenditure.

16. Is the operator required to prepare a remediation plan if the annual financial statements show a deficit?

No, the final Regulations have removed the requirement in the consultation for operators to prepare a remediation plan. Instead, an operator is required to ‘make good’ a deficit shown in an annual financial statement for a retirement village.

This provision is directed at the village's annual financial position generally, and regulation 35 then prohibits residents being charged special payments or having recurrent charges increased to make good the deficit. 

17. Who bears the costs of mediation?

Unless the Commissioner decides otherwise, the costs associated with Commissioner appointed mediation must be shared equally between each of the parties to the dispute. 

18. Are mixed use (i.e. tenancy and lease for life) arrangements treated equally (in respect of the dispute resolution process)?

Yes, the village dispute resolution process applies to all villages in the same way, regardless of the tenure arrangements that exist within the village. 

19. What is the benefit of a conflict of interest register, and will it be available for residents to view?

The new regulations require operators to keep records of conflicts of interest that they, or their staff have. While the regulations don’t prescribe a register for the recording of conflicts of interest, it is a practical way of keeping these records. 

If a resident or prospective resident requests conflicts of interest records, the operator is required to provide access within 5 working days. 

20. What are the requirements for advertising a resident’s unit for sale? Would advertising on the operator’s website suffice?

Schedule 3, Division 3 requires “all promotional or sales material" provided by, or on behalf of, the operator must be:

• truthful, accurate and unambiguous; and
• consistent with the Act and the Australian Consumer Law. 

This applies regardless of whether the advertising appears on the operator’s website or by other means such as brochures, a property portal or through an external sales agent. 

21. What constitutes “reasonable efforts” to find alternative accommodation for residents?

What is ‘reasonable’ will ultimately be for the State Administrative Tribunal (SAT) to determine. 

Generally speaking, a ‘reasonable efforts’ clause imposes an obligation on the operator to take sensible, diligent, and good faith steps to find alternative accommodation for residents that is of no extra cost and that the resident considers acceptable. For example, an operator might show a resident a couple of different options for units they could move into, rather than just one. It would also be sensible for the operator to take into account the resident’s specific circumstances, their access to community, activities and amenities when suggesting alternative accommodation. 

Further guidance material will be developed in future if this proves to be an issue.

22. How will the new modification laws apply where an operator is planning to completely overhaul a village and has a Master Plan that could be 30 years into the future. 

Consumer Protection encourages Operators to get legal advice regarding complex proposed modifications, including a rebuild of a village. However, if the operator has provided all residents with a master plan as part of pre-contractual disclosure, it is likely that the operator will not need to get resident approval at each stage of the master plan.  

New regulation 66 also clarifies that if a proposed modification is part of a staged development and the operator has complied with the new approval requirements with respect to the whole staged development, there is no requirement to get separate resident approval at each stage of development. 

If an operator submits a development approval application for a proposed modification before 1 December 2026, they are required to comply with legislative requirements in place before 1 December 2026, and they are exempt from the new changes.

23. Does the new modification approval process apply to services that may be offered to residents on a user pays, trial basis (i.e. a wellbeing provider visiting the village to provide a service or a recreational activity provided by a third party provider) rather than a contractual offering?

The modification process is intended to apply to services and amenities that are disclosed to prospective residents and residents as part of the new disclosure framework, including those set out in the Community Arrangements Statement and the Prospective Resident Information Statement required under the new Regulations. 

Accordingly, where an operator chooses to trial a discretionary service, activity or amenity that was not disclosed in pre-contractual disclosure, we would not consider the introduction or cessation of that trial service to be a modification requiring compliance with the modification process under the new laws. 

The policy intent of the modification provisions is to ensure that residents have a say in significant changes to the services, amenities and facilities that form part of the retirement village offering and which residents may have relied upon when deciding to enter the village. Optional services that are offered on a trial basis and are not part of the disclosed village offering are not intended to be captured by these provisions.

It is recommended that operators  clearly communicate to residents when a service or activity is offered on a trial basis and that no representation or warranty is made regarding its ongoing availability.

24. How will the capital gain as a result of a renovation be assessed?

The legislation does not prescribe a separate methodology for calculating any increase in value attributable to a renovation. Rather, the treatment of capital gain or capital loss will depend on the terms of the relevant residence contract and the method used to determine the value of the residential premises when calculating the resident's exit entitlement.

If the operator and resident cannot agree on the value of the premises, the Act provides a valuation process. The Regulations require the operator and resident to agree on a value or valuer within prescribed timeframes and, if there is no agreement, the Commissioner must appoint a licensed valuer. The valuer must provide written reasons for the valuation and identify the matters taken into account in making the determination.

25. Are PCRs required for existing residents?

No. The new requirement introduced by section 14D of the Amendment Act applies prospectively to all new residents that enter into occupation of a unit in a village on or after 1 December 2026. 

26. When does an operator need to complete an entry PCR for a new resident?

The legislation requires that an inspection be undertaken, and two copies of an entry PCR are prepared and given to the new resident within 7 days of them moving into their unit in the village.

27. How should operators assess fair wear and tear?

The Act and Regulations do not prescribe a definition of "fair wear and tear". The concept is well established in property law and generally refers to deterioration that occurs through ordinary use of premises over time. The Department recognises that questions may arise about whether particular work constitutes fair wear and tear, damage, maintenance, reinstatement, or renovation.

The reforms include new requirements for property condition reports, renovation plans, and dispute resolution processes to assist operators and residents to identify and resolve disagreements. Where parties cannot reach agreement, existing dispute resolution mechanisms, including mediation and applications to the State Administrative Tribunal, remain available.

As the regulator for residential tenancy legislation in WA, there is information on the Consumer Protection website about what constitutes fair wear and tear.

28. Are there different timeframes to provide PCRs if dealing with a deceased estate or where the resident’s representative is based interstate?

No, the legislation does not contemplate different timeframes for provision of a PCR if there is a deceased estate or the resident’s representatives may be based interstate. If there is a delay in receiving probate, there may be cause for the operator to apply to the Commissioner to seek an extension of time for payment of the exit entitlement, if applicable. 

29. How are contracts executed before 1 July 2027 expected to follow legislative requirements in place before 1 July 2027 if the Code and 1992 Regulations are repealed from 1 September 2026?

From 1 July 2027, residence contracts must comply with the new legislation which sets out the requirements for residence contracts, including the documents that must be given to a resident intending to enter into a contract. All residence contracts and service contracts must also comply with the prescribed requirements in new regulation 14 and schedule 6 under amended section 14A. 

From 1 July 2027, the Community Arrangements Statement and the Prospective Resident Information Statement are the disclosure forms that must be used and form part of contracts from that date.

Transitional provisions in the new Regulations ensure that the current legislation around contractual pre-disclosure will continue to apply to contracts entered into up until 1 July 2027.  The new pre-contractual laws will apply from 1 July 2027. 

30. Is there a requirement for a separate capital replacement fund?

No. The legislation does not mandate how and where capital replacement funds are held by the operator, with this being left to the discretion of the operator.

31. Why do operators need to consult with residents on the capital replacement budget when there is no requirement to have a capital replacement fund?

Whilst the legislation doesn’t mandate the need for operators to maintain a capital replacement fund, they are required to prepare a capital replacement budget each financial year and identify capital replacement items in a capital maintenance and replacement plan from 1 July 2028. 

32. What is the process for residents applying to the SAT to challenge the amount held in the capital replacement fund?

New section 41E(1) provides a power for residents of a retirement village or the Commissioner to apply to the SAT for an order that funds held in the capital maintenance fund are excessive, or insufficient, having regard to the operator’s obligations to maintain capital items in the village, and the maintenance requirements identified in the village capital works plan. 

An application by residents must be endorsed by a special resolution at a meeting of residents.

33. Can capital maintenance and capital replacement funds be mixed/kept in same account?

No. From 1 July 2028, operators will be required to have a separate capital maintenance fund.  

If an operator is currently using one account that funds both capital maintenance and capital replacement, before 1 July 2028 the account will need to be split so there is a separate capital maintenance fund. 

The legislation does not dictate how these funds are to be split, other than requiring that there is enough money in the capital maintenance fund to cover the maintenance outlined in the plan. This is why the plan needs to be developed earlier than the splitting of funds (if necessary). If residents consider the fund has too much or too little money in it, having regard to the capital maintenance and replacement plan, they can apply to SAT.

34. Are capital maintenance plans “rolling” 5 year plans?

Yes.

35. For operators that manage a number of villages, does each village require a separate bank account for the capital maintenance fund or is it possible to have one account that applies to capital maintenance across all the villages?

New section 41C provides that the operator of a retirement village must maintain a fund for capital maintenance (a capital maintenance fund). The legislation does not explicitly provide that where an operator runs more than one village, they must have a separate capital maintenance account for each village. If an operator has capital maintenance funds pertaining to more than one village paid into one bank account, there must be clear delineation in the way the operator manages the account to ensure the capital maintenance funds for each village are accounted for separately. 

36. Is there a monetary threshold for what constitutes a capital item?

No. The introduction of monetary thresholds for the classification of capital items was considered during consultation but discounted in favour of a discretionary model where the operator, in consultation with residents, is responsible for determining the minimum value of what constitutes a capital item in the village. 

37.  What happens to the interest earned from the capital maintenance fund?

The new section 41C(3)(d) requires that any interest received from investment of the fund must be credited to the capital maintenance fund. 

38. Will it be lawful for an operator to credit a portion of exit fees into the capital maintenance fund from 1 July 2028?

The legislation doesn’t prohibit the operator from transferring money raised from other sources, such as deferred management fees or other exit fees into the capital maintenance fund. 

39. Operator has a village consisting entirely of units for lease. There is no reserve fund, but work is underway to have a portion of residents' weekly rent paid into a maintenance account. Would this satisfy the new requirements of Part 3B from 1 July 2028. 

However, The village must adhere to the new laws in the same way as other villages. A capital maintenance account would need to be in place by 1 July 2028, and a portion of resident’s weekly rent may be paid into the account to fund ongoing maintenance.