24 June 2019
Retirement villages will be forced to allow external real estate agents to hold property inspections and take marketing photographs, as part of a series of regulatory changes to be introduced by the NSW Government.
The proposals are among new ‘rules of conduct’ for retirement villages, which the NSW Government exhibited from May to June.
Retirement village residents seeking to sell their unit in NSW currently can choose between appointing an agent employed by the village operator, or an external agent.
However, a review of NSW’s retirement villages legislation published last year received submissions that residents were having difficulty appointing external agents, because the village operators would sometimes not co-operate with these agents.
The proposed new rules seek to address this issue.
Under the proposed rules, real estate agents must:
- Have “free and unrestricted access to the residential premises and to the common areas of the retirement village for the purposes of inspection of the residential premises by prospective purchasers”.
- Be allowed to “access (the) common area of the retirement village that is reasonably required to take photographs for the purposes of marketing the residential premises”
- Be provided with information typically given to incoming buyers by the village operator.
The proposed rules go well beyond the current State law, which has a poorly-defined power that the village operators “must not interfere” with the sale of units by external agents.
The only specific example the legislation gives of unacceptable “interference” is an operator removing legally-installed “For Sale” signs.
In its submission to the NSW Government, the NSW Retirement Villages Residents Association said the proposed rules were too specific, and there should instead be “an overarching, mandatory duty of co-operation with a selling agent”.
The Property Council of Australia, in its response, said external agents should give “reasonable notice” of inspections and visits, and only attend during “reasonable hours”. It also called for operators to accompany agents, if the agents want to access common areas, for public liability insurance reasons.
However, the rules do not go so far to require villages to share prospective buyer waiting lists with external agents. The Property Council’s A Wise Move website notes that many village agents have such lists.
The proposed rules of conduct also impose a series of other obligations on retirement villages, including requiring the village operator to:
- Prepare a strategy for mitigating elder abuse
- Not refer to prospective residents being able to ‘own’ units, unless these units are strata-titled, community-titled or company titled.
- Promote a culture that “values and encourages residents to raise concerns and supports the effective resolution of any complaint”
- Have a complaints-handling process, including managing complaints within 60 days
- Prepare and implement written policies and procedures for the selection, training and ongoing supervision of the operator’s staff.
The NSW Government’s document is further evidence of the increasing wall of regulation facing retirement villages. This wall is expected to grow higher later in 2019, when legislation relating to mandatory buybacks will be presented to the NSW Parliament.
NOTE: On Friday, June 28, 2019, the NSW Government approved and published the new rules of conduct - you can see these new rules here.
By Mark Skelsey, News Editor at Downsizing.com.au. Email Mark at [email protected]