Review of residence contracts: a critical step in compliance with the amended Retirement Villages Act 2016 (SA)
Key Takeaways
Amended Act and Regulations will officially commence on 2 February 2026
A range of new mandatory provisions will now need to be included
Review and amendments critical in staying compliant
The Retirement Villages Act 2016 (SA) (Act) and the Retirement Villages Regulations 2017 (SA) (Regulations) have a number of upcoming changes which will have an impact on both residents and operators of retirement villages in South Australia. The amended Act and Regulations will officially commence on 2 February 2026, bringing with it new rights for residents and requirements with which operators in this sector must comply.
A key change of the amended Act and Regulations is on the content requirements for residence contracts. It is critical that operators review and amend their residence contracts to ensure they include a range of new mandatory provisions and are consistent with new or revised restrictions under the amended Act and Regulations.
What must residence contracts now include?
Among other things, operators will need to ensure their residence contracts set out the following:
Whether the resident can make any alterations to the residence and any approval process (noting that alterations to install a functional aid, equipment or infrastructure recommended as necessary by a registered health practitioner for a resident cannot be unreasonably refused).
Any obligations on the resident for the resident’s alterations when vacating the residence.
Who will be responsible for reinstatement and any work to improve the residence more than that required to reinstate the residence.
The exit fees (either in amount or manner of calculation) payable by a resident on termination of the residence contract, which expands on the existing requirement to specify fees and charges that may be deducted from the exit entitlement.
If the resident’s right of occupation is conferred by a lease, licence or ownership of shares, a clear statement at the front of the contract advising this and a statement that the resident is not purchasing the residence.
Importantly, these requirements apply to all residence contracts entered into on or after 2 February 2026 unless the required disclosure information, including the residence contract, was provided to the resident prior to that date.
While your residence contracts may already address some of the above matters to an extent as commercial terms, it is important to review your residence contracts for compliance with these requirements as the above will now be required by law.
What else must be considered in reviewing residence contracts for compliance?
There are also new or revised restrictions under the amended Act and Regulations which impact residence contracts. These include, but are not limited to, the following:
The exit entitlement must be repaid to the resident no later than 12 months and 30 business days after the resident delivers vacant possession of the residence rather than the current 18 months.
The operator must assume responsibility for other charges (such as council rates, water rates, emergency services levy) in addition to recurrent charges after the resident ceases to reside in the residence, but those charges can be recovered from the exit entitlement (if any) for the period of 6 months after the resident ceases to reside.
A capital fund contribution deducted from an exit entitlement cannot exceed an amount that is 1% of the current market value of the residence for each year, or part year, of occupation up to a maximum of 12.5% of the current market value of the residence.
The restrictions on the fees that can be charged to a resident who terminates the residence contract during the settling-in period.
Why compliance is critical and how we can help
The Act has a maximum penalty for non-compliance with the requirements on the content of residence contracts of $35,000, exposing operators to significant financial and regulatory risk. Given the consequences for a failure to comply, it is important that you understand the changes and ensure your residence contracts are compliant.
To understand the changes affecting your operations and your next steps before 2 February 2026, you can access our Compliance Checklist.
Disclaimer + outro:
This article is for general information only and cannot be relied upon as legal advice. The application of and obligations under the Act and Regulations will depend on the type of operator you are and the services you offer. Do not act on the basis of this document but seek specific advice from your legal adviser.
Cowell Clarke’s dedicated Aged Care and Retirement Living Team continues to work closely with operators and aged care entities to ensure their best possible outcomes are achieved whilst ensuring compliance.
For further information, please contact our Aged Care, Retirement Living and Health Team
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.