Mandatory Purchase of Retirement Village Units

The Queensland Government has introduced an amendment to Parliament that will require village operators of strata title retirement villages to purchase freehold units from residents.

In 2017, the Parliament passed significant changes to the Retirement Villages Act 1999 following a review that commenced in 2012.  Included in these amendments was a provision that village operators would be required to pay the exit entitlement (also known as a buyback provision) to an outgoing resident if the right to reside had not been sold to an incoming resident within a period of 18 months.  This requirement was somewhat accepted by the industry as it related to leasehold and licence village contracts.

Following the commencement of the exit entitlement payment provision, a view was formed by the Department that the provision also applied to freehold villages.  Earlier this year the Property Council wrote to the Minister of Housing and Public Works, the Honourable Mick De Brenni, outlining that the provision clearly does not and should not apply to freehold villages where, unlike leasehold and licence villages, the operator has no underlying ownership of the resident’s unit.

Despite raising concerns, and the fact that there are significant differences in the tenure types, the Government introduced amendments to the Retirement Villages Act 1999 (Qld) to mandate that village operators must purchase the freehold unit from a resident if the unit has not sold within 18 months.  The amendments are included in the Health and Other Legislation Amendment Bill 2018 (Qld) which was introduced on 13 November and sent to the Health, Communities, Disability Services and Domestic and Family Violence Prevention Committee for review.

The Committee has called for submissions on the Bill up until Monday, 7 January 2019.