Retirement village exit entitlements and recurring charges cap

Submission cover sheet

  • Name of organisation or individual making this submission

    Max McGregor

  • Authorised delegate/contact person

    Max McGregor

  • 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?

    No problems with that

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

    the valuation should be done by someone independent of both parties.

  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?

    Can’t see how the opt out process would work considering the condition that exist in some contracts and the way they ere implemented. The contract conditions currently in force and more importantly the method of employment would need to change drastically especially in the area of refurbishment.

  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?

    Don’t think this should be a consideration. The RV act at present shields operators from normal commercial risk. In a traditional commercial environment one who secures a property to lease for gain would be expected to suffer any consequential expense or loss that arise due to wear and tear and by periods between leases where the property remains empty

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

    Can not think of any reason that a resident should be concerned about an operator incurring hardship

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

    The date that a resident provides notice that they wish to leave should set the trigger. The decision to renovate or upgrade is an operator’s decision and should not be a consideration.

  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?

    Conditions set out seem to reference Aged care more than Retirement villages and do not seem relevant to current NSW arrangements.

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

    The impact upon operators should be cushioned by the size of the in going contribution( non interest loan) which is often far greater than the cost of building a village dwelling. These prices are market driven and once again constitute a risk of doing business

  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?

    yes

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

    These proposals definitely should not be grandfathered. Once again this action would shield operators from risk and place it directly upon residents who are generally less able to afford the charges.

  11. Please provide any further comments on the reforms.

    Many of the proposed amendments simply set out to redress items that were unjustly enacted or enacted with little consideration for the resident while favoring the operator. Grandfathering would simply continue the unfair elements of the act. It is imperative that exit conditions be examined in depth, exit rates vary from 20% to 70% (examples available), Capital gain of 50% conditional for RIH but seldom achieved , calculation may be on in going or next incoming contribution the difference is enormous and is the rule rather than the exception Live example Sell $1.4 Million, resident $320,000 operator $1.1million examples available. The average tenure for residents in a retirement village is 10 years and would seem to invalidate any requirements for long term leases over 50 years to be considered in any manner as a criteria in reaching a position on Registered Interest Holders. Who benefits from this provision? Many other examples of unfairness exist that keep residents locked in to a village since their return upon resale is just not sufficient to purchase a dwelling even if ones expectations are significantly lowered.

At our discretion we may remove parts of submissions because of length, content, appropriateness or confidentiality (privacy) reasons.

Website https://www.fairtrading.nsw.gov.au

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