SARVRA AND COTA SA JOINT SUBMISSION TO SA HEALTH DRAFT RETIREMENT VILLAGES BILL Prepared by

Transcription

1 SARVRA AND COTA SA JOINT SUBMISSION TO SA HEALTH ON DRAFT RETIREMENT VILLAGES BILL 2015 Prepared by SARVRA 16 Hutt Street Adelaide SA AND COTA SA 16 Hutt Street Adelaide SA Authorised by: Pam Judge President Jane Mussared Chief Executive (08) Prepared by: Jan Wheatley Policy and Project Officer

2 INTRODUCTION This submission is made jointly by the South Australian Retirement Villages Residents Association (SARVRA) and COTA SA. SARVRA provides representation for its members to Government, industry and Retirement Villages. Membership of the Association is available to any person who is a permanent resident of a South Australian Retirement Village and others who are considering entering a village. COTA SA is the peak body representing older South Australians. It provides advice to government on issues such as health and well-being of older people, age discrimination, cost of living, and employment. During April 2015 SARVRA and COTA SA conducted face to face consultations on the draft Retirement Villages Bill 2015 in metropolitan and non-metropolitan areas. In total 352 residents participated in the sessions. GENERAL COMMENTS In the main, there has been widespread and general support for the provisions of the Draft Retirement Villages Bill Notwithstanding this, residents have raised some matters which they would like to see addressed either through the Regulations, Code of Conduct, or a broader education campaign. In particular, many participants were concerned that the term reasonable is used throughout the Act, but there is no indication of who determines what is reasonable. This is particularly important when it comes to the disclosure of detail for the budget, charges etc. Residents were consistent in their view that contracts should be in plain English, and operators should ensure that each clause is fully explained and understood. Residents also expressed concern that few legal practitioners fully understand the Act, and the legal community needs to be educated about the Act and its implications. Further, new and potential operators should be educated in the processes and procedures of owning a village especially managing cash flow for 12 month payouts. Residents considered it essential that managers are well trained and qualified in their role. There was a view that expiation fees are trivial, especially for larger operators. Also, by specifying the amounts within the Act (and not in the Regulations) it will make it harder to adjust these over the life of the Act to keep pace with inflation. The Queensland legislation uses the term penalty units. The dollar value of units is set by the government and gazetted each year. This ensures that penalties are current. 2

3 There is also widespread support for further consultation opportunities when the Regulations are available. Residents feel that the regulations must be explicit, and operators must be made aware of the legally binding nature of Regulations. SPECIFIC COMMENTS PART 1 Preliminary Section 4 Interpretation Residents applauded the recommendation to improve the clarity and consistency in retirement villages by using simpler terminology such as operator/manager/exit entitlement. This will increase the understanding by current and future residents. Definition of eligible resident Reflecting that people may now choose to work longer for several reasons, many residents felt the age limit should be increased to 60 years rather than 55 years. There are mixed views about the required employment status of residents. SARVRA strongly recommends that the requirement that residents will not be in full time ongoing employment is reinstated. SARVRA continues to support residents who choose to maintain part time or ad hoc contract employment. During the consultations many residents agreed that there may be a need or desire for residents to work, but expressed the view that people working full time are not retired. They felt that if villages have a high proportion of people in their 60s still working full time, it would potentially change the amenity of the village; people would be less likely to be involved in residents committees, and may be more likely to want evening and night time events. Retirement implies retirement from full time employment and is usually a choice. The general feeling by SARVRA members is that villages should not become what could be seen on face value as simply a cheaper housing option for those in full time employment. Members argue that agreement to this proposal will destroy the ambience of villages and affect the integrity of the retirement village concept. COTA SA acknowledges that workforce participation has both economic and health benefits for the individual and for communities. Commonwealth and State government policy settings are redefining the traditional view of what retirement means, and when it will occur. As the ageing population increases, people may continue to move in and out of full time, part time and contract employment well into their 60s or 70s. This should not preclude people from being able to invest in a retirement village lifestyle for the future. The issue of what constitutes retirement, and therefore the purpose of a retirement village warrants further consideration. 3

4 Capital fund, sinking fund and special levy These terms must be clearly defined, and their purposes made explicit. Especially sinking fund and special levy, and what is regarded as operating expenses. What is the level of audit required? It is also important that any audit notes are fully understandable to the lay person. PART 2 Administration Residents were concerned that OFTA must be resourced appropriately and have the will to follow up and follow through with penalties. PART 3 Rights of Residents Division 1 Creation and exercise of residents rights Disclosure Statement: This is fully supported. Additional comments include: The Disclosure document should include a copy of the most recent AGM minutes and budget statement for the Village a full explanation of settling in period and consequences for early exit. exactly what residents are responsible for in terms of insurance, and when and how much excess is payable, and by whom. some benchmarking of fees so that a potential resident can determine if the fees are reasonable or exorbitant. an explanation of every condition that applies to how residents live Compliance with Disclosure Statement requirements must be monitored. Division 2 Financial matters Exit Entitlement to be paid within 12 months This is fully supported. Additional comments include: This should include those units which were on the market prior to the proclamation of the Act. This would mean that the 12 months exit entitlement period would apply from the date of the Act for all units. This would prevent operators prioritising those units which become vacant after the Act, and neglect to sell those that were listed before the Act. The provisions for serious financial hardship and subject to conditions may leave a loophole for an operator to extend indefinitely. Related to this, despite the provision for the Tribunal to not allow an extension beyond an additional 12 months, can an operator keep going back to the Tribunal to seek further extensions (in theory) indefinitely? Capital/Sinking and Maintenance fees Main comments were: The difference between these needs tighter definitions, especially as they apply to fixtures and fittings stoves, lights, fans, air conditioners etc. Contracts and disclosure statements need to make clearer what belongs to the owners eg refurbishment of community centres and therefore what is capital and what is sinking fund. Where a sinking fund has been established, the works for which the money has been collected should be undertaken as soon as practicable. 4

5 Individual village accounts must be identified. Consolidated accounts do not provide an adequate level of detail. Increases of fees must have details or a rationale clearly explained. How will reasonable profit be determined? Remarketing and reselling: Residents are concerned about maximising the sale price. Residents strongly advocated for the right to obtain up to three independent valuations, and independent sales reports. Some contracts do allow for independent valuation. This should be a consistent standard which could be allowed for in Regulations? Residents also queried whether resale can only be done through the owner, and whether they would be bound by what the owner decides is the sale price. Division 4 Residents committees Do the provisions of this section apply to residents sub committees (eg finance sub committees) as well as Residents Committee? Residents Committees (or finance sub-committee) want the provision to be consulted on and have input to the budget, and to recommend amendments whre appropriate. There should be guidelines about what information can be given at a Managers Information Session, and what requires a formal meeting. Alternatively, a record should be kept and made available for information sessions. There should be a standard format for presenting budgets and financial statements. Division 5 General matters The role and responsibilities of managers in relation to residents and owners needs to be made clear to managers. Residents should be consulted before rules and policy changes are made, and the changes should be clearly communicated to residents. It is recommended that there be a minimum standard of training for managers and operators. PART 4 Administrators, receivers and managers Will villages in receivership be bound to declare this to prospective residents via the Disclosure Statement? Will villages in financial difficulty be bound to advise current and prospective residents in a timely manner? 5

6 PART 5 Miscellaneous Rental provisions Residents support the provision that a unit must be fully paid out before it can be rented. They also raised the following matters: Costs for maintenance of common use facilities must either be included in the amount of rent charged, or borne by the operator. Residents were clear that shortfalls must not be passed on (either overtly or covertly) to residents. Some residents expressed concern about the balance of renters and paying residents, and queried the provision for management to go against the majority wishes of residents regarding the number and quality of renting tenants? They were also concerned about ensuring that a code of conduct for residents explicitly includes renters. SCHEDULE 2 Related amendments, repeal and transitional provisions How will the transition and implementation arrangements be spelled out and disseminated? April