Converting retirement living to aged care? Some points to consider

With an ageing population, some retirement village operators are redeveloping all or part of existing villages to incorporate aged care facilities.

Many retirement villages in Australia are approaching the stage of needing redevelopment, which presents some challenges for operators. Set out below are some points to consider to manage the process of converting your villages to aged care while residents still live there.

Consider the terms of your resident contracts before you start

• Do your contracts reserve your right to develop the site in the future? Make sure you understand and acknowledge your existing contractual obligations to residents.
• Does your contract allow you to change common areas?

Consider any restrictions under any legislation

• In some states, the retirement village legislation imposes restrictions upon an operator’s ability to redevelop the site without resident consultation.
• If the village is a strata titled village the relevant legislation may also restrict the ability to alter lot boundaries or to alter the common property.

Ongoing communication and consultation is key

• Consider engaging independent consultants to facilitate and oversee resident communications before, during and after building works.
• Consult with residents about planned works before they are set in stone and invite feedback from them about the proposed development plans. Where possible, act on any feedback received from residents.
• Hold regular information sessions with residents about the proposed works. Where possible, invite the residents committee or a small focus group of residents (where there is no committee) to provide regular feedback.
• Regularly report back to residents about any feedback they have given and how the operator proposes to deal ith it.

Don’t assume the end justifies the means

• Building works may result in an enhanced service offering to existing residents, but they can take a long time and no-one likes to live in a building site! Be mindful at all times of how works are impacting residents.
• Ask for resident feedback about what would lessen the impact for them of the building works, and where practicable, act on that feedback.  

Where the whole village is to be converted to aged care

• Develop a plan to deal with what will happen when only a small number of retirement living residents remain at the village.

Changing communal facilities and common areas

• Substantial amounts of communal space should not be taken away without being replaced with something of similar value to the residents. Consult with residents about what this may be.

Remain open to feedback after the building works are completed

• Meet with residents and external consultants to discuss the benefits of the changes.
• Be open to any feedback from residents about the process and outcome.

Be prepared for some complaints

• Ensure you have a dispute resolution policy for the village and comply with it if any complaint is received.
• If a complaint is received and resolved, consider whether to offer similar arrangements to other residents, especially if there are to be substantial prolonged building works on site.  

Employing the points discussed above can assist operators to manage resident satisfaction during this process. Village operators looking to convert a village in whole or part to an aged care facility or are experiencing resident dissatisfaction due to a conversion should seek expert legal advice. 

Russell Kennedy Lawyers has been named the 2018 ‘Law Firm of the Year’ for expertise in the practice area of Retirement Villages and Senior Living Law by Best Lawyers.

Donna Rayner, Principal at Russell Kennedy Lawyers, has been awarded the ‘Lawyer of the Year’ this year in Retirement Villages and Senior Living Law by Best Lawyers.

Suzanne Rieschieck, Senior Associate at Russell Kennedy Lawyers, regularly acts for operators in resident disputes as part of her Retirement Village, Property and Leasing disputes practice.  

Please call Donna Rayner on 03 9609 13 or Suzanne Rieschieck on 03 9609 1544 if you require further information or assistance.