RLC: stark reality of WA Govt’s 12-month deadline on exit entitlements

The drafting of amendments to WA’s Retirement Villages Act 1992, particularly the clause that exit entitlements must be paid to former residents or their families within 12 months, has shocked retirement village operators. Retirement Living Council Executive Director Daniel Gannon revealed how difficult the 12-month limit on exit entitlements is.

“The most recent PwC Retirement Census indicates that the average selling period for an ILU in metropolitan Perth is 321 days, while that figure balloons out to 495 across the rest of Western Australia,” he said. “Given it already takes 370 days to sell a retirement unit anywhere across WA, there will be more downward pressure on operators at a time when supply chain blockages, land supply and materials costs are escalating. A punitive buyback model will have a direct impact on an operator to keep operating. “For these reasons it is important for Government to understand the differences between a workable 12-month model that industry can support and operate viably within, and one that starts from vacant possession and places immense balance sheet pressure on operators.”

Daniel added WA retirement villages are 90% full and there is very little happening on the supply pipeline horizon.

“These reforms could bring headwinds and grey clouds into a housing market already under duress,” he said.

WA Commerce Minister Sue Ellery, responsible for drafting the new legislation, told Perth Live that people who leave retirement villages can be owed hundreds of thousands of dollars.

“This is a very long time coming,” she said. “We all know somebody who has had not such a great time in some retirement villages … it is about making it much better for consumers.”