Proposed WA Retirement Villages Act buyback changes to put 66% of Not For Profits in jeopardy

The Western Australian Government is drafting changes to the Retirement Villages Act 1992, as the state’s arm of the Property Council warns if a mandatory 12-month buyback goes ahead it will send Not For Profits to the wall.

Property Council WA executive director Sandra Brewer said mandatory buybacks would burden operators by forcing them to build large capital reserves.

There are about 300 retirement villages operating or in development in WA, with about 6.5% of the state’s population residents, according to the state government.

“For over two-thirds of operators who are Not For Profits, this may pose serious challenges,” she said.

The WA Government said Commerce WA’s Consumer Protection arm was discussing financial management issues, including circumstances in which the State Administrative Tribunal would be allowed to grant repayment extensions, with operators and the broader industry.

The 12-month repayment period had previously been found to be “the most appropriate to balance the financial impact on operators”, said a spokesperson.

“An additional mechanism that will be introduced to assist operators is the provision of a transition period of 12 months from the commencement of the amendment legislation prior to the new exit entitlement provisions coming into effect.”

The SOURCE: 75% of villages in WA are in and around Perth. It is the other 25% that will struggle to survive under a mandatory 12 month buyback

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