Retirement village exit entitlements and recurring charges cap

Submission cover sheet

  • Name of organisation or individual making this submission

    Anonymous

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?

    Yes

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

    Yes

  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?

    If resident set their own sale price and/or appoint their own selling agent, they should opt out of the exit entitlement provision.

  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?

    The location of the premises, the level of supply and demand in the local market of the premises, the price point of the premises in the current market, the marketing campaign for the premises.

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

    The number of resale applications at any one point in time as a percentage of the total number of premises in the property. The age of the property and whether the resales are at a time when the operator is outlaying funds for major capital works not funded by recurrent charges.

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

    The trigger point should not commence from vacant possession. It should only commence once the reinstatement is completed (in case an apartment is significantly damaged with lengthy reinstatement works), once the parties agree the sale price (to avoid a stalemate),

  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?

    NA as our residents are registered interest holders only.

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

    The cost of capital to operators will have a significant financial burden, if not a final impact on the viability of the business as a going concern.

  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?

    No, the trigger should only commence once reinstatement works have been completed and once the sale price has been agreed between the parties.

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

    Both proposals should be grandfathered so the impact is delayed and this will allow operators time to adjust their contracts and models to ensure their businesses remain financially viable.

  11. Please provide any further comments on the reforms.

    The proposed reforms of 42 day recurrent charges cap and 6 month buy back will leave operators torn in applying funds to upgrade premises and buildings as capital needs to remain available as a priority to pay back in going contributions in accordance to legislation.

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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