Greiner Report Released
On June 24, the NSW government released its response to Kathryn Greiner’s Inquiry into the NSW Retirement Village Sector.
The aim of the inquiry was to examine the fairness and transparency of business practices in the retirement village sector, and to consider opportunities to improve administrative and operational practices of Fair Trading, the industry regulator.
The Greiner Review Report was the final component of a four-point plan initiated by the Government for retirement villages. This plan was announced in July 2017, and included:
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Revising the Retirement Villages Regulation 2009;
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Introducing an online calculator to help consumers understand the costs of retirement village living;
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Undertaking compliance and education operations targeting NSW retirement villages; and
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Launching an Inquiry to examine the retirement village sector in NSW.
Currently there are 653 retirement villages in NSW, which are home to around 55,000 residents at the average age of 80 years. Retirement villages are one of the housing options available to address the accommodation and care needs of an aging population. The NSW population aged over 65 is on the increase, and this demographic is expected to make up a quarter of the population by the year 2056.
The Inquiry was conducted between August to December 2017, and included extensive consultation with the public, key stakeholders in the retirement village sector, as well as targeted consultation with other jurisdictions and industry experts.
In summary the report explains how the operation of the retirement village sector could be improved in three key ways:
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Increasing the transparency of exit fees and contracts;
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Clarifying the funding arrangements for ongoing maintenance costs which are shared between residents and operators;
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Providing more support for residents to pursue disputes with operators (in addition to reducing the potential for disputes to arise).
The report expands on the Inquiry’s findings and makes 17 recommendations to improve the legislative framework for retirement villages and the operational practices of both the industry and the regulator, NSW Fair Trading. A description of all the recommendations are provided down below.
Ben Myers, Executive Director – Retirement Living at the Property Council, peak body of the retirement living sector, said the recommendations build on the industry’s 8-Point Plan. “Katherine Greiner has been open and honest in her engagement with the sector throughout this process and the Greiner Report provides a good overview of the challenges for the industry and retirement village residents as well as potential solutions,” Mr. Myers said.
To implement the Greiner Review Report, the Government announced a plan to initiate reforms that provide greater protections to consumers and to ensure that retirement villages remain a viable accommodation option for seniors. These reforms aim to:
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Increase transparency in the sector by reviewing and developing disclosure documents and mechanisms for consumers.
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Provide increased consumer certainty around key costs and charges.
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Enhance accountability of operators and the sector to improve village living.
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Improve the effectiveness of dispute resolution processes and outcomes.
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Strengthening Fair Trading’s oversight of the sector.
Cheryl Thomas, NSW Deputy Executive Director at the Property Council, said the Greiner Report and recommendations will be important to inform the significant body of work being carried out by the sector in NSW and will support current and future reforms. “The Property Council has been working closely with Ms. Greiner throughout the inquiry; we want the best possible outcome for both industry and residents with this report and the Government’s response, we can achieve this outcome,” Ms. Thomas said.
“We look forward to working with the Minister Kean and the NSW Government further on key aspects of the Greiner Report.”
Recommendations by the Greiner Report
Marketing activities
Recommendation 1: Consider amendments to the Retirement Villages Act 1999 (NSW) to strengthen consumer protections and transparency around marketing practices.
Recommendation 2: Improve the up-front disclosure provided to prospective residents to make it simpler to understand the critical terms and conditions. This should be informed by an evaluation of the effectiveness of existing disclosure requirements.
Contracts, fees and charges
Recommendation 3: Require that a legally-binding, Exit Fees and Charges Statement is provided to residents early in the process. The statement should set out in plain-English all costs, fees and charges that a resident will likely be required to pay when leaving the village, how they are calculated and an explanation of any relevant resident’s rights under the legislation. The statement should include which items are optional and which items are required under the contract.
Recommendation 4: Require operators to provide residents with an opportunity for a regular contract ‘check-up’ during their occupancy and encourage family members or those holding Power of Attorney to be present.
Recommendation 5: Require an operator to buy back the unit after a maximum timeframe from a resident leaving the village that is a registered interest holder.
Funding for village maintenance and upgrades
Recommendation 6: Simplify the funding arrangements for maintenance of a retirement village by clarifying the definitions that apply.
Recommendation 7: Require operators to develop an asset register to increase transparency around maintenance of village assets.
Dispute resolution
Recommendation 8: Introduce a mandatory, accessible and independent step into the dispute resolution pathway which is appropriate for elderly residents and encompasses expertise in retirement village legislation.
Recommendation 9: Require operators to share information about the dispute resolution process in the village by:
a) requiring that operators have an internal dispute resolution process in place, and
b) increasing the obligations of operators to report on disputes to Fair Trading.
Safety and security of the built environment
Recommendation 11: Consider opportunities to advocate for age-appropriateness in village building design.
Administrative and operational practices of Fair Trading
Recommendation 12: Increase Fair Trading’s oversight of retirement villages through targeted compliance activities that focus on retirement villages.
Recommendation 13: Increase the level of collection of village operator and sector data including a requirement that operators report certain data to Fair Trading such as key village information and contract types on offer.
Recommendation 14: Overhaul and enhance the public register of retirement villages to provide information on the sector to members of the public.
Recommendation 15: Increase the level of awareness of prospective residents about retirement village living and their rights to facilitate informed consumer decision-making by:
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improving the accessibility of the Fair-Trading website and introducing a single portal for retirement village information, and
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requiring operators to make the Retirement Villages Living Guide (published by Fair Trading) available to residents, and
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increasing the number of community information sessions focused on retirement villages.
Training and conduct of village management
Recommendation 16: Require retirement village managers to undertake appropriate training to ensure that they have an acceptable level of knowledge and the skills suitable to managing a retirement village. States and territories could work together on this.
Recommendation 17: Increase the level of accountability of operators for the standard of conduct and quality of village management and consider:
a) implementing a Code of Conduct which outlines performance and conduct standards of village managers, operators and residents, and
b) the potential for a ‘negative licensing scheme’ involving mandatory public reporting of breaches of the Code of Conduct on a public register