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FEATURED RETIREMENT VILLAGES
Beauty Point Retirement Resort

Beauty Point Retirement Resort
Padstow Heights NSW

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Seabeach Gardens
Mona Vale NSW

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Cardinal Freeman Village
Ashfield NSW

 

Retirement Villages in New South Wales (NSW) - Departure Fees

The regulation of retirement villages in New South Wales (NSW) is the responsibility of the New South Wales State Government. The retirement villages laws comprise the Retirement Villages Act 1999 (the Act) and the Retirement Villages Regulation 2009 (the Regulations).

Although the Act defines what a departure fee is and requires full disclosure, it does not specify any particular method of calculation or impose any limits.

A departure fee must be calculated on a daily basis and if a resident moves to different premises in the village or in another village that is managed or controlled by the same operator they are taken to have a continuous period of occupancy for the purpose of calculating the departure fee (section 156). This is particularly important if, for example, a resident moves from an independent living unit to a serviced apartment.

A departure fee is paid to the operator by way of deduction from the refund of the former resident’s ingoing contribution or from the proceeds of sale of the home (section 157).

Notwithstanding the terms of the contract, the Act imposes the following limits on the period for which a departure fee can be charged:

  1. If the contract was entered into on or after 1 July 2000 the departure fee can only be charged up to the date on which the former occupant permanently vacated the premises (section 158).
  2. If the contract was entered into before 1 July 2000 and the former occupant is a “registered interest holder” (see below) the departure fee cannot be charged after any of several events occur, including the premises being sold or leased to an incoming resident or tenant or even occupied by someone with the consent of the operator (section 159).
  3. If the contract was entered into before 1 July 2000 and the former occupant is not a “registered interest holder” (see below) the departure fee cannot be charged after any of several similar events occur, but there is an additional proviso that it cannot be charged more than 6 months after the date on which the former occupant permanently vacated the premises (section 160).

A “registered interest holder” basically either owns the home (including strata title, community title and company title) or they have a registered long-term lease for life or at least 50 years (including any option) and they are entitled to at least 50% of any capital gain when the home is sold or leased to the next resident.

If the contract was entered into before 1 July 2000, the Civil and Administrative Tribunal may, on the application of a former occupant, make an order waiving or reducing the part of the departure fee that accrues after the former occupant permanently vacated the premises. However, it can only do this if it is of the opinion that there was a delay in the operator entering into a new contract that is attributable to the operator, including a failure to market or promote the premises (section 161).

More Information?

For general information about retirement villages, please see our Retirement Villages Guide.

For specific information about retirement villages in New South Wales (NSW), please see the following pages:

  1. Introduction

  2. Information and Representations

  3. What is a "Registered Interest Holder"?

  4. Departure Fees

  5. Condition, Repair and Refurbishment

  6. Vacating the Premises

  7. Dispute Resolution

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