NSW reform discussion paper released
The NSW Government has released a discussion paper outlining how it proposes to implement its proposed reforms to the payment of exit entitlements and the length of time a resident pays recurrent charges after they leave a village.
The discussion paper is part of the Government’s commitment to amend the state’s Retirement Villages Act to require payment of exit entitlements to a person leaving a retirement village within 6 months if they live in a metropolitan area, and within 12 months if they live in regional NSW.
The Act would also place a 42-day limit on the length of time a village operator can charge general or recurrent charges after a resident leaves a village.
The discussion paper contains a number of initiatives that need to be carefully thought through to ensure retirement villages continue to be a viable source of seniors housing.
A legislated buy back timeframe, whilst superficially attractive, is a blunt instrument that could reduce the value of existing residents’ retirement village units and make investment in future retirement villages less likely.
Small operators in particular, often in rural and regional areas, will struggle to source capital to buy back units within a strict time limit and manage the significant and additional liability that will be placed on their balance sheets.
The Property Council’s NSW Retirement Living Committee is coordinating a response on behalf of members. Email firstname.lastname@example.org if you wish to contribute to this response.
Anyone is invited to make a submission on the discussion paper by Friday 16 August at the Fair Trading NSW website.