Retirement village exit entitlements and recurring charges cap

Submission cover sheet

  • Name of organisation or individual making this submission

    Peter Johnson

  • Authorised delegate/contact person

    Peter Johnson

  • Position

  • Organisation

Questions on possible options

  1. Is the description of the ‘Sydney Metropolitan Area’ appropriate? If not, why not, and what areas should be included or excluded?


  2. Are the proposals for appointing a valuer, to determine the value of the property, necessary and appropriate?


  3. Where residents wish to sell their residence on their own terms, under what circumstances should they be able to opt in or opt out of the exit entitlement provision?

    No comment

  4. What issues should the Tribunal take into account when considering whether or not the operator has done everything in their power to enable the sale of a premises?

    Evidence of sales promotion of the RV unit; number of verifiable enquiries and inspections of the RV unit; written feedback to the departing resident; and overall sales data for the RV village for a specified time period.

  5. Are there any additional circumstances the Tribunal should be able to take into account when considering a hardship application from an operator?

    In the case of older RV villages, is the owner/operator letting the RV assets (including units) deteriorate and not replacing/maintaining these assets? This can happen if the owner/operator is planning to sell the RV land or to redevelop the site, or focusing on the financing the construction of new RV or other properties. Is there evidence of illegal "phoenixing" - that is the deliberate bankrupting of an older company and its replacement by a new company to avoid payment of debts (incl. exit entitlements)? This practice seems common in the building industry in Australia.

  6. Are there any other factors that could affect the setting of a ‘trigger point’?

    Definitely the date of formal departure of the resident should "start the clock ticking" for Sydney and regional RV residents. The term "formal departure" needs to be properly defined. The trigger point should definitely not be the date of RV unit renovation completion. If the departing resident has to wait until the unit is renovated (which I have observed often takes 6-12 months), the 6 month entitlement period in Sydney will be more like 12-18 months from date of formal departure.

  7. Would any of the current provisions in Victoria and South Australia as set out in Appendix A (in the discussion paper), be of benefit to NSW residents of retirement villages?

    Yes, definitely.

  8. Can you think of any other benefits or costs of this proposal? What are they?

    Ultimately the RV industrys image as a whole will benefit with the installation of the proposed maximum exit entitlement periods. The RV industrys reputation has been heavily damaged by its own dubious practices, and it will only recover once RVs become more attractive to new and existing residents. With a better reputation, RV owner/operators will yield financial benefits in the long term.

  9. As with residents with a non-registered interest, should the ‘trigger’ to commence the 42-day period begin when the resident permanently vacates the premises?


  10. Should one or both of the proposals be ‘grandfathered’? If not, please provide your reasons.

    Exit entitlement and recurrent charges reforms must apply immediately to all RV residents - they must not be grandfathered. This will create greater financial certainty and benefit for existing residents, and will have minimal impact on owner/operators. If the latter cannot absorb the cost, they should not be in the RV industry.

  11. Please provide any further comments on the reforms.

    I thank the NSW Govt. for being at the forefront of RV reforms. The proposed reforms, namely the 6 months exit entitlement (for Sydney RV residents) and 42 day cap on recurrent charges are welcome. Both must apply to all existing and new RV residents throughout NSW, and not be grandfathered. Grandfathering would create 2 classes of consumers (RV residents). Regulation in favour of the consumers (RV residents) will ultimately benefit the RV industrys finances and reputation. The RV industry must be properly regulated for its own good.

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