When a resident leaves a retirement village in Queensland, the financial arrangements surrounding their departure can give rise to disputes between the resident and the village operator.
These disputes commonly involve the calculation of exit entitlements and the obligations associated with reselling the resident’s right to reside.
The Retirement Villages Act 1999 (Qld) establishes a legislative framework governing these matters, including the rights of residents and the responsibilities of retirement village operators.
Two recent QCAT decisions — Sowden v Bethany Christian Care [2024] QCAT 171 and Bell v Yeronga Village Pty Ltd [2025] QCATA 12 (a decision of the QCAT Appeal Tribunal) — provide useful guidance on how retirement village disputes are approached.
Importantly, both decisions demonstrate that establishing a contractual or statutory dispute is only part of the process. The remedy sought and the procedure followed can be equally important.
Case 1: Sowden v Bethany Christian Care [2024] QCAT 171
Background to the Dispute
The first case concerned a retirement village operated by Bethany Christian Care in Brisbane.
Following a decision to close the village, an approved closure plan was implemented which included the termination of the residence contract held by Mr Gregory Sowden.
Mr Sowden had originally paid an ingoing contribution of $177,000.
Upon termination of his residence contract, Bethany calculated his exit entitlement by deducting an exit fee of $44,250.
This resulted in a payment of $132,750 to Mr Sowden.
However, Mr Sowden disputed the deduction, arguing that the residence contract did not entitle Bethany to charge an exit fee in circumstances where the retirement village was being closed.
The dispute was subsequently brought before QCAT.
What Did QCAT Decide?
The central issue was not whether the exit fee had been correctly calculated, but whether Mr Sowden had followed the appropriate statutory process before commencing proceedings.
Under the Retirement Villages Act 1999 (Qld), retirement village disputes ordinarily require the parties to attempt informal resolution before proceeding to mediation.
Only after the applicable dispute resolution requirements have been satisfied may the matter ordinarily proceed to a QCAT hearing.
Mr Sowden argued that his dispute concerned the payment of an exit entitlement and therefore fell within an exception permitting a direct application to QCAT.
However, the Tribunal rejected this argument.
It found that the relevant exception under section 171 applied to specific failures by an operator concerning the resale of a right to reside, where those failures caused material prejudice to a former resident.
Mr Sowden’s actual complaint concerned the contractual entitlement to deduct an exit fee following the village’s closure.
This was a different type of dispute and did not fall within that exception.
As Mr Sowden had not completed the required pre-proceeding dispute resolution process, QCAT found that it lacked jurisdiction to determine his application.
The proceeding was dismissed on 11 April 2024.
Importantly, the Tribunal did not determine whether the $44,250 exit fee was lawfully payable.
The outcome turned on the failure to follow the required statutory process.
What Does This Decision Mean?
The decision demonstrates that the correct procedure must be followed when challenging an operator’s obligations under a residence contract.
A resident who disputes the calculation of an exit entitlement cannot necessarily proceed directly to QCAT without first participating in the prescribed dispute resolution process.
Timing also matters. Where an exit entitlement has been paid, a resident generally has a limited period — in Mr Sowden’s case, four months after payment — to give the required dispute notice. Missing that window can leave the dispute outside the Tribunal’s jurisdiction altogether.
For retirement village operators, the decision also highlights the importance of clearly documenting exit fee arrangements and ensuring that those arrangements are consistent with the legislation.
Case 2: Bell v Yeronga Village Pty Ltd [2025] QCATA 12
Background to the Dispute
The second case concerned Mr Reginald Bell, who purchased a right to reside in a retirement village operated by Yeronga Village Pty Ltd in November 2019.
Mr Bell subsequently arranged to sell his right to reside, with the sale completing in September 2021.
A resale value of $669,000 had been agreed between the parties in September 2020.
The unit was eventually sold for $699,000.
Mr Bell commenced proceedings alleging that the village operator had failed to comply with its obligations under the Retirement Villages Act 1999 (Qld).
His claims included concerns about the resale arrangements and allegations of misleading or deceptive conduct.
The original Tribunal dismissed his applications, following which Mr Bell appealed.
What Did the Appeal Tribunal Decide?
On 4 February 2025, the QCAT Appeal Tribunal considered whether the original Tribunal had properly addressed Mr Bell’s claims.
The Appeal Tribunal found that the original Tribunal had made an error of law by failing to consider certain arguments raised by Mr Bell.
However, that finding did not mean that Mr Bell was entitled to compensation.
The Appeal Tribunal proceeded to consider the substantive issues.
Under section 67 of the Retirement Villages Act 1999 (Qld), where the relevant circumstances applied, the operator was required to ensure that the agreed resale value was reconsidered at least every three months until the right to reside was sold or the exit entitlement was paid.
The Appeal Tribunal found that Yeronga Village had failed to comply with this requirement.
However, Mr Bell had agreed to a resale value of $669,000, and the unit ultimately sold for $699,000.
The Appeal Tribunal found that Mr Bell had not provided evidence establishing that the unit was sold at an undervalue or demonstrating the amount of any compensable loss.
His claim concerning misleading or deceptive conduct was also unsuccessful.
Although the appeal was allowed because the original Tribunal had failed to address relevant arguments, Mr Bell’s underlying applications were dismissed.
What Does This Decision Mean?
The decision reinforces the importance of retirement village operators complying with their statutory obligations throughout the resale process.
Where the relevant requirements apply, the operator must ensure the agreed resale value is reconsidered at least every three months until the right to reside is sold or the exit entitlement is paid.
This obligation remains relevant even where the operator is actively attempting to secure a purchaser.
However, the decision also highlights an important distinction between establishing a breach and obtaining compensation.
A failure to comply with a statutory obligation does not necessarily establish that a former resident has suffered financial loss.
Where compensation is sought, the resident must identify an available legal remedy and provide evidence supporting the claim.
The decision also illustrates the limits of remedies for former residents: the statutory provision allowing a contract to be set aside for misleading conduct is generally available to current residents, and once a residence contract has been terminated, that remedy may no longer be available.
What Do These Decisions Mean for Retirement Village Operators and Residents?
Although the two cases involved different circumstances, they highlight important considerations under Queensland’s retirement village legislation.
In Sowden, the resident’s application was dismissed because the required dispute resolution process had not been followed.
In Bell, the Tribunal identified a statutory breach concerning resale value reviews, but the resident had not established an entitlement to compensation.
Together, the decisions demonstrate the importance of understanding both the substantive obligations imposed by the legislation and the procedures available for enforcing those obligations.
For retirement village operators, this includes ensuring that residence contracts clearly identify the applicable exit fee arrangements and that statutory resale obligations are properly administered.
For residents, it is important to understand how exit entitlements are calculated and what steps must be taken if a disagreement arises.
The decisions also reinforce the value of maintaining appropriate records throughout the exit process, particularly where the parties disagree about the resale value or the amount payable to the former resident.
The Importance of the Residence Contract
While the Retirement Villages Act 1999 (Qld) provides important statutory protections, the residence contract remains central to determining the financial arrangements between the operator and the resident.
These contracts commonly address how an exit entitlement is calculated and when payment becomes due.
They may also provide for the sharing of capital gains or losses, depending on the contractual structure.
Understanding the interaction between the residence contract and the legislation is therefore essential, particularly when a resident’s right to reside is terminated.
Carefully prepared contractual arrangements can help reduce uncertainty and minimise the risk of disputes.
How Vojdani Lawyers Can Assist
Vojdani Lawyers advises retirement village operators and property owners on matters arising under the Retirement Villages Act 1999 (Qld).
Our experience includes preparing and reviewing residence contracts, advising on exit entitlement arrangements and assisting operators with their contractual obligations.
We understand the importance of balancing legislative compliance with the commercial requirements of retirement village operations.
Contact Vojdani Lawyers for advice concerning retirement village contracts and exit entitlement arrangements in Queensland.