The traditional retirement village model is well established. In WA, research shows that approximately 6 or 7 percent of seniors (over the age of 65) currently reside in retirement villages. 

Based on projected growth in our State, an extra 24,000 retirement village units (representing a 75 percent increase on current stocks) will need to be built over the next 10 to 15 years.

Retirement villages, however, are but one housing option for seniors. While some of the alternative options are not a direct substitute for retirement village living, this paper will examine the extent to which strata schemes for persons over 55 years of age may be a compelling alternative to retirement villages in the right situations, if developed and managed appropriately.

There are already examples of these housing products appearing or planned in WA[1]. There are certainly differences between the models; however, so long as residents and their families are fully informed about the differences between a retirement village and a strata complex, there is room for both models, and a place for both.

1. Introduction

1.1 What is a 'retirement village'?

The Retirement Villages Act 1992 (WA) (RV Act) defines a retirement village as:

‘… a complex of residential premises, whether or not including hostel units, and appurtenant land, occupied or intended for occupation under a retirement village scheme or used or intended to be used for or in connection with a retirement village scheme’.

A ‘retirement village scheme’ means a scheme for the occupation of residential premises, established for retired persons (or predominantly retired persons), at least one of whom has paid a ‘premium’ for admission. A ‘retired person’ means ‘a person who has attained the age of 55 years or retired from full-time employment or a person who is or was the spouse or de facto partner of such a person’.

Retirement village residents purchase, lease or take a licence of their accommodation, by entering into a ‘residence contract’. Some retirement villages are strata titled, but this is not the norm.

A significant feature of a retirement village is the registration of an RV Act memorial on title.

In WA, a regulatory framework is established by what will be referred to in this paper as the ’RV Legislation’; namely:

  • RV Act;
  • Retirement Villages Regulations 1992 (WA) (RV Regs); and
  • Fair Trading (Retirement Villages Code) Regulations 2015 (WA) (RV Code).
1.2 What is a strata scheme?

Under the Strata Titles Act 1985 (WA) (ST Act), a ‘strata scheme’ means:

  1. the manner of division, from time to time, of a parcel into lots or into lots and common property under a strata plan and the manner of the allocation, from time to time, of unit entitlements among the lots; and
  2. the rights and obligations, between themselves, of proprietors, other persons having proprietary interests in or occupying the lots and the strata company, as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time.

Strata schemes can, of course, be used in a range of development contexts, over 55s housing being a prime example.  A strata complex for over 55s may also be a retirement village, but this is not so in every case.

1.3 Why consider an over 55s strata scheme?

There exists a business case for over 55s strata schemes, though a full analysis of that business case goes beyond the scope of this paper.  Suffice to say, there are factors which may attract both developers and retirees to the idea of over 55s strata.  For instance, from the developer’s perspective, strata titled developments may be easier to sell (being a familiar form of tenure) and may yield higher upfront development profit.  Regulatory compliance is also less onerous where the development falls outside of the RV Legislation.  For the retiree, a strata titled development can at face value offer many of the same attractive features as a retirement village, but (as will be discussed), the apartment or unit is typically purchased –rather than being leased subject to high exit fees.

It is important, however, to understand the similarities and differences between retirement villages and strata complexes. Some of the more pertinent of these will be examined under the headings that follow.

2. Resident's Tenure

2.1 Retirement villages – protection at a contract and scheme level

More often than not, a retirement village resident does not purchase their unit, but takes a long-term lease or licence. Even so, all retirement village residents have security of tenure (although a ‘short-term residence contract’ defined in regulation 4A of the RV Regs as having a term of 12 months or less, does not guarantee tenure beyond that term).

First, individual retirement village residence contracts are not easily terminable. As explained in the notes found in the RV Code:

Retirement villages are clearly marketed by the industry as permanent accommodation for their residents. Accordingly, a residence contract may be terminated only in a limited number of circumstances, as set out in the residence contract or the Retirement Villages Act 1992.

The administering body of a retirement village cannot terminate a residence contract on its own; that is, without the agreement of the resident. However, a resident or the administering body may apply to the State Administrative Tribunal to terminate a residence contract under circumstances as specified in the Retirement Villages Act 1992’.

Secondly, retirement villages are protected at a whole of village level.  A retirement village scheme cannot be terminated without the approval of the Supreme Court while a person who has been admitted to occupation of residential premises under the scheme remains in occupation of those premises: RV Act s22(1).  Further, sections 15 and 16 of the RV Act require the owner of a retirement village to lodge a memorial before entering into residence contracts.  Amongst other things, an RV Act memorial notifies the public at large, that the land is (or is proposed to be) used for the purpose of a retirement village, and the provisions of the RV Act apply.

Once lodged, a memorial creates considerable difficulty in using the land for a purpose other than a retirement village in the future.

2.2 Strata schemes – tenure through ownership

In a strata scheme, a proprietor’s tenure is safeguarded in the fact that they own their unit entitlements. Some residents and their families may see this as being a positive, and certainly, unit ownership is promoted as a feature to over 55s where available.

Under the current law, termination of a strata scheme can only occur as a result of a resumption, by unanimous resolution, or by order of the District Court.  While the general consensus is that these safeguards against a scheme termination are inadequate, a more robust termination process will feature in anticipated ST Act reforms[2].

The ST Act has its own protections for purchasers of strata units. The whole of Part V of that Act is concerned with the protection of purchasers, dealing with:

  1. Information to be given to purchasers, which as a minimum will include:
    1. a copy of the strata plan;
    2. a copy of the standard and any non-standard by-laws;
    3. ‘Form 29’ Buying and Selling a Strata Titled Lot; and
    4. ‘Form 28’ Disclosure Statement.
  2. The seller’s obligation to inform the purchaser of full particulars of the relevant notifiable variation.
    1. When a purchaser may avoid a contract.
    2. Holding of deposit and other contract moneys when a lot is pre-sold.

3. Consumer protection for ingoing residents

3.1 Retirement villages – a heavy consumer protection focus

The RV Legislation has a heavy consumer protection component, which first becomes evident at the time a prospective resident is considering a move into a retirement village. Controls around advertising and promotion of retirement villages and provisions as to contract requirements and a prospective resident’s right to information are aimed at giving consumers a degree of certainty and transparency about the village they are entering into, enabling informed decisions to be made.  For example:

  • The owner of land must obtain all necessary consents to develop a retirement village before any sales promotion is undertaken (though market surveys or taking expressions of interest would be acceptable): RV Code clause 7.
  • Retirement village residents must be given a written residence contract, defined in the RV Act as ‘a contract, agreement, scheme or arrangement which creates or gives rise to a right to occupy residential premises in a retirement village, and may take the form of a lease or licence’.  A residence contract must comply with prescribed requirements and include (or not include) various matters prescribed in the RV Legislation.
  • Prior to a residence contract being entered into, the prospective resident must also be given various disclosure information - notably, the ‘Form 1’ (or Form 1A) Disclosure Statement.
  • After signing a residence contract, residents enjoy a 7 working day cooling off period, prior to occupation: RV Act s 14.
3.2 Strata titles - a different set of buyer protections

The ST Act has its own protections for purchasers of strata units. The whole of Part V of that Act is concerned with the protection of purchasers, dealing with:

  1. Information to be given to purchasers, which as a minimum will include:
    1. a copy of the strata plan;
    2. a copy of the standard and any non-standard by-laws;
    3. ‘Form 29’ Buying and Selling a Strata Titled Lot; and
    4. ‘Form 28’ Disclosure Statement.
  2. The seller’s obligation to inform the purchaser of full particulars of the relevant notifiable variation.
    1. When a purchaser may avoid a contract.
    2. Holding of deposit and other contract moneys when a lot is pre-sold.

4. Ongoing management and administration

4.1 The role of a retirement village’s Administering Body

A central figure in the management and administration of a retirement village is the ‘Administering Body’ of the village. This is ‘the person by whom, or on whose behalf, the retirement village is administered and includes a person (other than a resident) who is the owner of land within the retirement village’. The RV Legislation provides direction to the Administering Body on how a village must be operated, addressing important topics such as: budgets and management procedures, resident consultation (RV Code clause 16), holding resident meetings (RV Code clause 26); and the village dispute resolution process (discussed later in this paper).

Retirement village residents have their Administering Body as a point of contact who can be held responsible for the running of the village.

4.2 Strata companies, councils and managers

Management of a strata scheme is the duty of the strata company (ST Act s 35), made up of the proprietors within the scheme (ST Act s 32(1)). The strata company has various powers necessary for exercising its functions (ST Act s 37-39) and these functions are performed by the council of the strata company (ST Act s 44). A strata council is constituted and performs its functions in accordance with the strata company by laws (ST Act s 44(2)). Proprietors within a strata scheme, even if not on the strata council, have an opportunity to attend general meetings of the strata company (see the standard position provided in the ST Act schedule 1 by-laws).

A sizeable strata complex will usually appoint a strata manager. There is a contractual relationship between the strata company (run by the strata council) and the strata manager they engage, so the strata manager remains answerable to the strata company subject to the terms of the manager’s appointment.

Within the ST Act framework, the way a modern over 55s strata complex might work, can be summarised as follows:

  • A strata company comes into existence before unit sales commence, to be subsequently comprised of unit proprietors.
  • The functions, powers and duties of the strata company are exercised and performed by the strata council.
  • The strata company (through the strata council) appoints a strata manager, who ensures compliance with the ST Act.
  • The strata manager may perform certain services (eg those of an administrative nature) itself, and contract additional third parties to perform such services as are necessary or desirable for the running of the complex.  These services may include those associated with the running of communal facilities located on the common property of the strata scheme.

The terms of the strata manager’s appointment (including the length of appointment, their responsibilities, and service standards), and any further contracts that they may grant to other service providers, would be critical to the success of the complex as an over 55s community.  See also the discussion on by-laws later in this paper.

4.3 What is the difference?

Conceptually, it might be said that the role of an administering body has parallels with that of a strata company. Where the two diverge is as follows:

  • In a retirement village, the residents entrust the administering body with running the village.  Residents retain what is essentially a consultative role.  Decision making rests with an administering body who (ideally) is trusted, experienced and has a sound track record.  The administering body must discharge its duties in accordance with the prescriptive requirements of the RV Legislation) and is subjected to the oversight of the Commissioner for Consumer Protection (Commissioner)  - who has various functions for the purpose of the RV Legislation.  See at sections 7A to 12 of the RV Act, and the overview of the Commissioner’s activities found on the Consumer Protection website (

    In the normal course, the administering body does not change.  Unless there is a change in ownership of the village, an administering body could conceivably remain responsible for a village indefinitely.

  • In a strata complex, the proprietors are the strata company.  As already mentioned, responsibility for the complex lies with the strata company, acting through the strata council (and any strata manager they appoint).  While there can be recourse to Consumer Protection, that recourse is somewhat more tangential than in a retirement village context:  For example, if the strata manager is also a real estate agent, the strata company has the option to lodge a complaint with Consumer Protection where necessary.  Further, if a person were a tenant in an over 55s strata complex, their tenancy agreement would be subject to the Residential Tenancies Act 1987 (WA), and additional recourse against their landlord might be available.

    The contractual nature of a strata manager’s appointment may call into question the longevity of that appointment.  Even if expressed as a long term arrangement, a management contract may be susceptible to termination by the strata company after 5 years (where an implied term to this effect applies under ST Act s 39A).  That said, although a retirement village administering body is a more permanent role, it must be remembered that retirement villages can be sold, and administering bodies can change.  It is also possible to appoint a third party village manager contractually – giving rise to the same potential longevity issues as with a strata manager.

4.4 A resident’s perspective

How a resident would view the above distinctions is a question of perspective. Some seniors may see it as a positive to be able to not concern themselves with management, repairs and maintenance, tradespeople, quotes and the like. Other seniors may wish to be more hands on, and might enjoy the opportunity to sit on a strata council. Some seniors may appreciate the continuity that would be expected of a retirement village’s administering body. Others may favour the idea of a strata manager who could be replaced every few years, and terminated where underperforming.

4.5 A developer’s perspective

A developer deciding between a strata complex and a retirement village should consider their appetite for ongoing involvement with the finished product.

A developer whose core business (or a substantial part of its business) is retirement villages would see a village as a long term play This could be for commercial reasons (noting that under commonly-used financial models, a retirement village takes a number of years to become profitable) and/or for reasons of mission or objects in the case of not-for-profits in particular.

Conversely, the ability to step away from a strata titled development once completed may be attractive to a developer who is not squarely in the business of seniors housing.

5. Lifestyle considerations

It is often said that a retirement village resident is not buying a property asset, but a lifestyle. This raises the question about what type of lifestyle a strata complex has to offer.

The following are some important issues that may factor into the decision making of developers, administering bodies, and persons considering a move to a seniors housing community (whether a retirement village or over 55s strata scheme).

5.1 Age restrictions

A retirement village scheme is, by definition, established for retired persons; and in that sense may at first glance seem to have an advantage over a strata titled development.

Strata schemes, however, can also be limited to occupation by retired persons, independently of the RV Act:  A restriction under section 6 of the ST Act may limit the use of strata titled lots by requiring that each lot is to be occupied only, or predominantly, by ‘retired persons’ (defined in the ST Act as persons over 55 or retired from full-time employment).  Such a restriction may be complemented with suitable strata by-laws, conditions of planning approval and/or a corresponding notification on title under section 70A of the Transfer of Land Act 1893 (WA), restricting occupants to ‘aged persons’ (which, under State Planning Policy 3.1 – Residential Design Codes, means persons aged 55 years or over).

5.2 Rules and controls on behaviour

In a retirement village or a strata complex, there is an ability to control resident behaviour by the making of rules.

In retirement villages, there are ‘residence rules’ with which the administering body requires its residents to comply. These can be changed or revoked by the administering body or the residents, in accordance with clauses 23(3) or 23(4) of the RV Code. The administering body has a degree of control over the residence rules, in that even where residents pass a special resolution to change or revoke the rules they require the agreement of the administering body (though this agreement must not be unreasonably withheld: clause 23(5) RV Code).

In a strata scheme, by-laws will apply.  These are often a combination of the standard by-laws found in the ST Act Schedule 1 and 2, and additional by-laws made under ST Act s 42.  By-Laws can be changed by special resolution at a general meeting of the strata company.

In setting up an over 55s strata complex, the by-laws are very important in establishing the culture and amenity of a village, to ensure it does not become indistinguishable from an ‘ordinary’ (ie all ages) residential development.

5.3 Intangible Factors

Retirement village living can offer certain ‘intangible’ factors such as ‘security, companionship and peace of mind’.  Further, there can be an amenity and quality of life in a retirement village stemming from a high level of facilities and services.  It has also been said that village facilities and amenities can enable residents to socialise without feeling obliged to do so.

For an over 55s strata complex to be seen as more than just a cost-effective downsizing choice, it would be necessary to consider how to create a sense of community and how to provide facilities and services of a comparable standard to that expected in modern-day retirement villages.  While not impossible, this can require a shift in thinking for some property developers.

5.4 What will happen as a resident ages?

Putting aside a situation where an administering body may also be an approved provider of aged care (under the Aged Care Act 1997 (Cth)), there is not necessarily a reason why one housing model would be better than the other:

  • Home care is playing an increasingly important role, helping individuals to age in place and being more cost effective than residential aged care for the Government. Home care can be provided in a retirement village or a strata complex, and a home care provider can reach a ‘preferred provider’ arrangement with an administering body of a retirement village just as it can with the manager of a strata complex.
  • There is never a guaranteed place in residential aged care, even where a retirement village is owned and operated by the same organisation as a residential care facility.
  • A retirement village can be co-located with (ie developed adjacent to) a residential care facility, just as a strata complex can be.

Arguably, the freedom to choose to stay in one’s unit as long as possible rather than going into residential care, may, in fact, be more restricted in a retirement village. Typically, village rules and/or residence contracts expressly require a resident to be medically able to live independently in their unit. Medical grounds are one of the few reasons that an order can be sought for the termination of a residence contract: ST Act s 58.

6. Dispute resolution

Dispute resolution is inevitably a necessary consideration in communal living arrangements.

6.1 Retirement villages

The RV Code establishes processes for resolution of disputes either between residents or between a resident and an administering body, with a focus on conferral and mediation. These operate in tandem with a dispute resolution mechanism in the RV Act, which allows the State Administrative Tribunal to make orders in respect of various retirement village disputes. There is also the option of a complaint to the Commissioner if an administering body’s conduct is in question. In short, there are various ways in which a retirement village resident may resolve a dispute with an administering body, and these need not involve traditional legal proceedings in a Court.

6.2 Strata schemes

In a strata context, there are also multiple avenues for dispute resolution.  As with a retirement village, there are avenues for seeking orders in the State Administrative Tribunal (ST Act Part VI).  The SAT has jurisdiction over strata title disputes between strata lot owners and strata companies.  Such disputes may arise in relation to powers, authorities, duties or functions under the ST Act or the by-laws of a strata scheme. Before an SAT application is made, the strata scheme’s own disputes procedures must first be followed: ST Act s 77B.

It is important to understand that strata managers are not recognised under the ST Act.  This is significant because whilst there may be some statutory recourse against a strata manager who is also a real estate agent (as foreshadowed earlier), a dispute purely relating to performance of contractual responsibilities will require an action for breach of contract.  An individual owner cannot take action directly against a strata manager, because the strata manager is appointed by way of a contract with the strata company.  Any legal proceedings against a strata manager would, therefore, need to be commenced by the strata company. Indeed, in any legal proceedings, it is the strata company who is named as a party and the strata company is representative of its proprietors: ST Act s 33.  A dissatisfied individual proprietor would need to consider what action they have against the strata company. Contrast this with the options available to an individual retirement village resident.

7. Fees and charges

Fees and charges in a retirement village typically fall into 3 categories: On entry, an in-going entry payment referred to in the RV Act as a ‘premium’; throughout a resident’s time at the village (and for a limited time thereafter), recurrent charges; on departure, an exit fee (often called a Deferred Management Fee or ‘DMF’) along with any other agreed charges such as refurbishment costs and marketing costs.

In most retirement villages, the upfront premium mentioned above is in the nature of a leasing or licensing premium; the residents are not paying a purchase price to actually buy their unit. In contrast, a strata scheme is a system of property ownership, and proprietors buy their units.  This means that transfer duty must be factored into any decision to buy an over 55s strata unit.  Thereafter, strata levies are charged in accordance with section 36 of the ST Act.

Certainly, there are differences in financial models associated with typical retirement villages versus a typical strata scheme for over 55s.  Some of these differences are a product of legislation.  Others are purely a product of contractual agreement, which have evolved by convention and as a result of convention or industry practices.

There is not necessarily a single answer as to which model is preferable.  This is best thought of as a commercial decision, determined in a case by case basis.

8. A note about community titles

At the time of writing, a new form of land subdivision and tenure known as community title is anticipated to be introduced in WA as part of wider strata reforms.

Community title schemes will entail multiple sub-schemes existing under an umbrella community scheme[3]. These schemes are likely to be suitable for developments containing a mix of uses (say, residential, retail and commercial). Community schemes already exist in some of the eastern states. The aim is for draft bills to be delivered to Parliament in mid 2018[4].

Whilst the Community Titles Bill is still in a consultation phase, for the present discussion it can reasonably be expected that:

  • Community title will offer yet another option for over 55s housing (in addition to retirement villages, and over 55s strata).
  • A community development statement will govern how the community scheme is going to be developed and will require approval by the Western Australian Planning Commission prior to lodgement with Landgate. These community development statements may impose restrictions on the purpose for which lots in the scheme may be used, or specify requirements relating to land use in the scheme.
  • By-laws will also be able to specify restrictions on purposes for which lots may be used – including, for example, restricting use to occupation by retired persons.

9. Conclusions

There are good and bad administering bodies. There are competent and not so competent strata companies and managers.

This paper will hopefully illustrate that a retirement village is not always superior to an over 55s strata complex, or vice versa. There may well be an argument that over 55s strata complexes have a valid role to play in taking some of the seniors housing load from the traditional retirement village model.

So long as a resident is fully informed about the differences between a retirement village and a strata complex, there would seem to be little prejudice in both markets operating alongside each other, allowing residents the choice to decide what best suits their needs and circumstances.

While it is by no means suggested that retirement villages have no remaining utility or value (the author’s view is quite the contrary in fact), over 55s strata complexes warrant consideration for what they can offer to an ageing population. 

How can I find out more?

At IRDI Legal, our Health & Ageing lawyers can advise you on the various legal issues arising in the retirement village, health aged care industries.

Together with our experienced Property and Commercial teams, we can help you complete a broad range of transactions and resolve the associated legal issues without compromising our friendly, personal service. Please contact David McMullen on (08) 9443 2544 or to discuss how we can assist.

[1] See for example: Stockland ‘Aspire’,; Handle Property Group ‘College Park’,; Fairway Villages ‘The Green’:

[2] See Landgate, ‘Safeguards for the termination of schemes’.

[3] Landgate, ‘Community title schemes’

[4] Landgate, ‘Strata Reform’