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Retirement Villages in New South Wales (NSW) - Vacating the Premises

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).

Exactly what happens when you leave a retirement village depends on the terms of your contract and the relevant provisions of the Act and the Regulations.

Some provisions of the Act that deal with vacating the premises apply differently depending on whether you are a "registered interest holder". A "registered interest holder" either owns their home (including strata title, community title and company title) or has a registered long-term lease for life or at least 50 years (including any option) and is entitled to at least 50% of any capital gain when the home is sold or leased to the next resident.

When you entered into your contract may also be relevant because some provisions only apply to contracts that were entered into after the commencement of the relevant provision (most provisions of the Act commenced on 1 July 2000). Some of the key issues when you leave a retirement village are:

  • how long do I have to keep paying the recurrent charges?
  • when does the departure fee (if any) stop accruing?
  • what are my obligations in terms of repairing and refurbishing the home?
  • what is the sale process and to what extent can I be involved?
  • how much will I get back?
  • when will I get it?
  • what do I do if I don't think the amount is right?

Recurrent Charges

Recurrent charges relate to the provision of services, which fall into two categories: optional services and general services.

Optional services are provided to individual residents and include things like meals, laundry services and home cleaning.

If a resident is temporarily absent from the village for at least 28 days, liability to pay for optional services ceases for the remainder of the period of absence (section 151).

If a former occupant has moved out or died, liability to pay for the optional services ceases on the date they moved out or the date the operator is notified of their death (section 151).

General services are provided for all residents and include things like management and administration services, gardening and general maintenance.

If a former occupant is a "registered interest holder", liability to pay recurrent charges in respect of general services ceases on the first to occur of a number of events including:

  • the date on which the operator enters into a contract or a residential tenancy agreement with an incoming resident or tenant
  • the date on which someone takes up residence with the consent of the operator
  • if the operator buys the premises from the former occupant, the date on which contracts are exchanged
  • any earlier date agreed by the operator and the former occupant.

The former occupant is responsible for the above liability for the first 42 days after the premises are permanently vacated, but after that period the former occupant and the operator share it in the same proportions that they share any capital gain (section 152).

A former occupant who is not a "registered interest holder" has a similar obligation except that it is subject to a maximum period of 42 days from the date they permanently vacated the premises (section 153).

Departure Fees

See the "Departure Fees" link below.

Condition, Repair and Refurbishment

See the "Condition, Repair and Refurbishment" link below.

Sale

A resident who is not a "registered interest holder" will generally not be directly involved in the sale process.

A resident who is a "registered interest holder" may set the sale price and may appoint a selling agent, who may be the operator, but in any case must be appropriately licensed as a real estate agent (section 168).

When appointing a selling agent, residents should be aware that the operator will usually be in a good position to quickly identify prospective purchasers. Many operators, particularly the larger branded operators, have extensive and ongoing marketing campaigns (which may include listings on sites such as this one) that are designed to generate leads and build waiting lists of prospective purchasers.

The resident and the operator share the costs of the sale in the same proportion as they share any capital gain. However, if the resident appoints an agent other than the operator or its nominee, then the resident is wholly responsible for the agent's selling commission (section 170).

Even if the resident appoints a selling agent and is the vendor for the sale (eg the resident is selling a strata title or community title property) the purchaser must still be provided with a disclosure statement at least 14 days before the contract is entered into and must also enter into a service contract with the operator (section 171).

Refunds and Payments

The amount you eventually get back should be:

  • either your initial contribution or the re-sale amount, as provided in your contract
  • minus any departure fee
  • minus any money you owe and have not otherwise paid directly for sale costs, recurrent charges, repairs and refurbishment.

A former occupant who is a "registered interest holder" is entitled to receive payment by the earliest to occur of:

  • the date 14 days after the date on which the operator receives full payment under a contract with an incoming resident
  • the date 14 days after the date on which the operator enters into a contract or residential tenancy agreement with an incoming resident or tenant
  • the date 14 days after the date on which a person takes up residence in the premises with the consent of the operator
  • if the operator buys the premises from the former occupant, the date 14 days after the date on which the operator completes the purchase any earlier date for payment specified in the former occupant’s contract.

When the payment is made the operator must also give the former occupant a detailed statement showing the components of the amount and how they were calculated (section 180).

A former occupant who is not a "registered interest holder" is entitled to receive payment by the earliest to occur of:

  • the date 14 days after the date on which the operator receives full payment under a contract with an incoming resident
  • the date 14 days after the date on which the operator enters into a residential tenancy agreement with an incoming tenant
  • the date 14 days after the date on which a person takes up residence in the premises with the consent of the operator
  • if the Tribunal terminated the contract, the date one month after the date of termination
  • if the former occupant delivered up vacant possession of the premises to the operator after receiving notice of the operator's intention to apply to the Tribunal for an order terminating the contract, the date one month after the date on which vacant possession was delivered the date 6 months after the date on which the former occupant otherwise delivered vacant possession of the premises to the operator
  • any earlier date that may be provided for in the contract between the operator and the former occupant or that they may otherwise agree.

However, if a former occupant who is not a "registered interest holder" is entitled to receive a share of any capital gain that may accrue, any such amount must be paid within 14 days of the earliest to occur of:

  • the date on which the incoming resident pays any money to the operator under a contract
  • the date on which the incoming resident occupies the premises.

When each payment is made the operator must also give the former occupant a detailed statement showing the components of the amount and how they were calculated (section 181).

If a former occupant believes that any of the above amounts was not calculated correctly or the conduct of the operator has unfairly had a negative financial impact on the former occupant, the former occupant can apply to the Tribunal for an appropriate order. Conduct of the operator that may unfairly have a negative impact includes entering into a contract with a new resident that contains terms that are substantially different from those contained in the contract to which the former occupant was a party and will have a negative financial impact on the former occupant to the benefit of the operator (sections 180 and 181).

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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