For those living in retirement villages, amendments to the retirement villages legislation and regulations have resulted in several changes, some of which include:
- Changes to the timing of exit entitlement payments;
- Payments to aged care facilities when moving from a retirement village to an aged care facility;
- A cap on recurrent charges;
- Changes to the disclosure requirements; and
- Asset Management Plans by operators of retirement villages.
Determining the value of an exit payment
One example of the change is the timing of when the Retirement Village makes payments of entitlements upon death or exit of the retirement villages for those residents who have a registered long-term lease (at least 50 years) and are entitled to at least 50% capital gain.
Previously, the retirement village operator could specify in their agreements when a resident would receive their exit entitlement however with the legislative changes, residents can now apply to the operator of the retirement village for their exit entitlement and if an agreement between the operator and the resident can not be reached then an independent valuer will be appointed to determine the exit entitlement. The valuer will determine the value of the exit entitlement regardless of what the premises is eventually sold for.
If an exit entitlement order is made, the operator has 30 days to pay the exit entitlement to the resident.
How are “Recurrent charges” charged to a resident after they vacate:
Previously the recurrent charges were payable by the resident for 42 days after vacating the premises and thereafter payable by the resident and the operator in proportion to their capital gains entitlements, until the premises is re-leased.
When moving into a retirement village or an aged care facility it is important you obtain both legal and financial advice to ensure the move is right for you and you understand all your rights and obligations. If you have any questions about the legislative changes or need legal advice on your retirement village contract, please do not hesitate to contact the team at Meehans on (02) 4627-3333.
This article was published on 20/09/22 and the information is valid only to the date of publishing. This article should be considered merely general and non-specific on the subject matter and is not and should not be considered or relied on as legal, advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.