Retirement village exit entitlements and recurring charges cap

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  • The Issue

    Consultation period: 09/07/2019 11:00 am to 16/08/2019 5:00 pm

    What is this about?

    On 30 July 2017, the NSW Government announced a four-point plan for retirement villages in NSW aimed at putting consumers first. Part of this plan included commissioning an independently chaired Inquiry into the sector. The Inquiry provided its final report to Government on 15 December 2017, making 17 recommendations for improvements. One recommendation was that the Government consider implementing reforms to improve the timely payment of exit entitlements and the way recurrent fees for general services are charged to former retirement village residents.

    Exit entitlements

    The Retirement Villages Act 1999 (the Act) provides that operators of villages are not required to repay former residents (who are registered interest holders ) their exit entitlements:

    • until after their unit is sold, and
    • within 14 days after a new resident enters into a contract with the operator.

    However, former residents who are non-registered interest holders must be paid their exit entitlements no later than 6 months after they permanently vacate their premises.

    The Inquiry noted that registered interest holders had to often wait for lengthy periods for their premises to be sold before they received their exit entitlements. This may have caused  a financial and personal burden on them and their families.

    Recurrent charges cap

    Registered and non-registered interest holders are required to pay recurrent charges for general services (gardening, administration, cleaning, etc.) for 42 days after they vacate their premises. After the 42 day period, registered interest holders are still required to pay a share (equal to their potential share of the capital gain as per their village contract) of recurrent charges for general services. This continues until the premises has been sold and a new resident enters the accommodation. This places an additional continuing financial burden on registered interest holders.

    What has happened so far?

    On 14 February 2019, the NSW Government made an election commitment to amend the Act to address these concerns by placing a 42-day limit on the length of time villages can charge for general services after someone leaves. It also announced its intention to address the payment of exit entitlements, requiring their payment by the operator within:

    • 6 months of a person leaving a retirement village in metropolitan areas, and
    • 12 months of a person leaving a village in regional NSW.

    Next steps

    The NSW Government is now seeking feedback from the retirement villages sector and the community about how these commitments should be implemented. This feedback will be used to help shape the reforms and ensure that they reflect the needs of residents and village operators.

    The discussion paper outlines the two reforms and is now available for public consultation.

    The consultation closes on 16 August 2019.

    Have your say

    Stakeholders and interested parties are invited to review the discussion paper and provide comments.

    Complete our consultation survey using the online form below.

    Alternatively, please  email your response to

    All submissions will be publicly available. If you do not want your personal details or any part of your submission published, please let us know in your submission. In some circumstances the Government may still be required to release that information, for example, in accordance with the Government Information (Public Access) Act 2009.

  • Milestones

    • 9 July 2019 - Discussion paper released and consultation starts
    • 16 August 2019 - Consultation ends
  • Outcomes

    Submissions to this consultation are available below with private information redacted where necessary. This excludes any confidential submissions received.

    Some further submissions are still being processed and will be uploaded shortly.

    View the submissions here

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