65 is the new 45
Back in 1980, the average life expectancy in Australia was around 74 years (notwithstanding differences between men and women). A mere blip of time later, in 2020, the figure was a little over 83 years. In mid-2020, some 4.2 million people in Australia – 16% of the population – were aged 65 or more. The upward trend continues.
Little wonder then, that recent years have seen a dramatic expansion in the retirement village sector, as older Australians migrate to that lifestyle. The reasons are many: health, simplicity of maintenance, companionship, or a combination of these and other factors.
As with any industry experiencing such rapid growth, sometimes the rules don’t quite keep pace.
And so it was …
And so it was that in the latter half of 2017, the Government established an inquiry under the direction of Kathryn Greiner AO to fully investigate the operation of the more than 600 retirement villages in NSW.
The Greiner Report made a total of 17 recommendations within the following areas:
- Marketing activities
- Contracts, fees and charges
- Funding for village maintenance and upgrades
- Dispute resolution
- Safety and security of the environment
- Administrative and operational practices of Fair Trading
- Training and conduct of village management
The Retirement Villages Act 1999, had already been subject to various updates to the regulations, roughly between 2008 and 2017, and further changes as a result of the Greiner Report were instituted in 2021 by the Retirement Villages Amendment Act 2020.
The new laws apply only to registered interest holders – that is to say, residents who have a long-term registered lease that entitles them to at least 50% of any capital gain (profit) of the sale of the premises. They do not apply where a resident has a holding in a community scheme or strata village, or where the residence is by way of shares in a company title or village trust.
Access to exit entitlement money.
Where a resident permanently exits a village, previous practices could delay the payment of exit money, in the worst case, up to 5 years. New rules entitle the resident to apply for payment of the exit entitlement within the prescribed period of 6 months in the Sydney metropolitan area, including Blue Mountains, Wollongong and Newcastle, or 12 months for all other areas. Once an order is made to pay the entitlement, it should be done within 30 days.
These prescribed periods of 6 and 12 months begin:
- 40 days after the premises are listed for sale
- The resident vacates the property, or
- Written notice is given to the operator that the resident will remain during the sale period
… whichever occurs first.
The amount of the entitlement can be determined through laid-out protocols.
Payments to aged care facilities.
A resident moving from a retirement village to an approved aged care facility may request that the daily accommodation charge be paid direct to the aged care facility while the resident is waiting for payment of the exit entitlement.
Recurrent charges when vacating.
Previously, these charges were paid until the premises were re-leased, whereas now there is a 42-day limit.
Disclosure requirements.
A potential resident must now, in addition to a general enquiry and a disclosure document, also receive a copy of village rules, as well as the NSW Fair Trading document, ‘Moving into a retirement village?’
These are some of the main changes made in early 2021. Retirement Village contract – make sure you know what it means for yourself and your loved ones. Contact Owen Hodge Lawyers today – we are here to help.