1. ACSA Victoria Finance Forum Rosemary Southgate, Principal Thursday, 23 April 2015 4183422v1 Retirement Village Contracts and the Australian Consumer Law

2. >The Australian Consumer Law – overview >Retirement village context >Pre-Contract Disclosure >Requirements for RV residents residence contracts (post 1 July 2014) Background 2

3. >The Australian Consumer Law >Misleading representations >representation with respect to a future matter >not reasonable grounds for making the representation Background (cont) 3

4. >Misleading or deceptive conduct >a person must not in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive >Unfair contract terms >must be a consumer contract, a contract which is a standard form contract and the term is unfair Background (cont) 4

5. >Standard form contract = >"take it or leave it" approach to negotiation >one party has most of the bargaining power in relation to the transaction >lack of adaptability of terms to the particular transaction >opportunity to negotiate terms Background (cont) 5

6. >Unfair term = >causes a significant imbalance in the parties' rights and obligations >not reasonably necessary to protect the legitimate interests of the advantaged party >would cause detriment to a party if relied upon If the term is transparent (plain language, legible, presented clearly, readily available), negates the extent to which a term is unfair Background (cont) 6

7. >Pre-Contract Disclosure >Retirement Villages Amendment (Information Disclosure) Act 2013 >Retirement Villages Amendment (Records and Notices) Regulations 2013 RV Context 7

8. >New requirements – two stage disclosure >Factsheet >Disclosure Statement RV Context (cont) 8

9. >Consumer Protection Issues >CAV approved forms >representations clearly set out in factsheet and disclosure statement >exit entitlement summary >accurate >not misleading RV Context (cont) 9

10. >Residence Contracts >Retirement Villages Amendment (Contractual Arrangements) Regulations 2013 RV Context (cont) 10

11. >Regulations deal with residence contracts in 4 ways >certain matters must be excluded (e.g. cannot require resident to take out contents insurance) >certain matters must be addressed in contracts (e.g. restrictions on use of the residence, fees, exit entitlements) RV Context (cont) 11

12. >some prescribed terms >standard or prescribed layout (a residence contract, a management contract, and a combined residence and management contract - 2 forms) >where format and wording of Regulations used – should not be unfair term RV Context (cont) 12

13. >special conditions >risk where there are clauses which allow one party to vary or terminate the contract unilaterally (e.g. agreement for lease – owner units) RV Context (cont) 13

14. 14 QUESTIONS

15. The information contained in this presentation is intended as general commentary and should not be regarded as legal advice. Should you require specific advice on the topics or areas discussed please contact the presenter directly. Disclaimer 15

16. 16 Rosemary Southgate Principal Telephone: 9609 1637 Email: rsouthgate@rk.com.au

17. Level 12, 469 La Trobe Street, Melbourne, VIC 3000 P: +61 3 9609 1555 Level 8, 28 University Avenue, Canberra, ACT 2601 P: +61 2 6171 9900 Liability limited by a scheme approved under Professional Standards Legislation