The retirement living sector is entering a new era.
From 1 May 2026, sweeping reforms to Victoria’s Retirement Village legislation officially come into effect, introducing the most significant regulatory changes the sector has seen in more than four decades.
During a recent industry webinar hosted by the Retirement Living Council and Property Council, legal experts from Russell Kennedy outlined the scale of the reforms and the mandatory implementations operators need to prioritise immediately in order to remain compliant.
The message was clear: these changes go far beyond contract updates. They represent a fundamental shift in how retirement villages are governed, operated and managed on a day-to-day basis.
Immediate compliance expectations
Operators are expected to be compliant from day one.
Key requirements include re-registering villages through the myCAV portal, publishing the new Consumer Affairs Victoria-approved Information Statement, implementing formal dispute resolution processes, and preparing capital maintenance plans and emergency procedures.
Operationally, villages will also need updated internal processes covering areas such as meetings, notices, resident modifications, annual contract checks and condition reporting.
Importantly, the reforms distinguish between existing and new residents. While many contractual and financial changes apply primarily to new contracts entered into from 1 May, several operational and governance obligations apply across the board.
Major contract and financial changes
One of the most substantial areas of reform relates to contracts and financial structures.
All new contracts must now comply with tightened legislative requirements, including enhanced disclosure obligations, a seven-day cooling-off period, and revised Deferred Management Fee (DMF) calculations.
Under the new framework, DMFs must:
- Be based on the resident’s entry payment
- Be calculated according to length of stay
- Accrue daily
- Cease upon the earlier of either vacant possession or the resident passing away.
The reforms also shift greater financial responsibility onto operators.
For new residents, maintenance charges and optional service fees generally stop once a resident permanently leaves the village or passes away. Operators will also be unable to retrospectively recover operating deficits, while operating surpluses must be carried forward into the next financial year.
Another notable change is the distinction between capital maintenance and capital replacement. While maintenance costs may still be funded through maintenance charges or maintenance funds, the replacement of capital items now clearly sits as an operator responsibility.
Governance and resident rights strengthened
The reforms place stronger emphasis on governance, transparency and resident protections. Expanded special resolution requirements mean residents will have greater input into decisions affecting services, facilities and village amenity. Meeting procedures are also becoming more structured, with stricter notice periods and quorum requirements.
At the same time, a resident’s right to make modifications to their premises has been strengthened. Operators must respond to modification requests within prescribed timeframes and cannot unreasonably refuse certain requests.
Bylaws will also come under increased scrutiny, with new requirements ensuring they remain fair, reasonable and consistent with resident rights.
Higher threshold for termination and expanded dispute resolution
The reforms also significantly change how disputes and terminations are managed.
Operators will face a higher threshold before terminating a resident agreement, particularly where health and safety grounds are involved. In some cases, VCAT approval will now be required.
Formal dispute resolution policies will become mandatory, supported by expanded mediation pathways and stronger VCAT powers.
An ongoing transition for the sector
While 1 May marked the formal commencement date, industry leaders have stressed that this is not a one-off compliance exercise.
Additional regulations are still expected later this year, including further detail around codes of practice and exemption frameworks. Operators should therefore view this as the beginning of an ongoing operational transition rather than a single implementation milestone.
The overarching takeaway from the session was clear: the reforms are reshaping the operational foundations of retirement living, requiring operators to rethink governance, financial planning, compliance processes and resident engagement strategies moving forward.