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?

    Q2 Yes Q3 Valuation must be done by someone independent of both parties Q4 Conflicts of interest resolved promptly Q5 Full and transparent assessment of exit entitlement, agreed by both parties including capital gain on the property and all other charges.

  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?

    At day 42 the decision should be made. If the resident changes their mind later they should let the operator know as soon as possible. If opting back in, the 6 month period should commence from this latter date.

  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 needed that this is indeed true

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

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

    The trigger point should be the day the premises become vacant.

  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. It is ridiculous that ill and vulnerable aged persons are charged twice for their accommodation. The best aspects from the above legislations should be incorporated into NSW reforms, particularly the early release of 85% of maximum entitlement towards the cost of RAD or DAP payments (5.54%) in cases of hardship. Provisions should apply to both registered interest holders and non-resident interest holders.

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

    Reform based on modelling showing maximum period of 6.7 months (metropolitan) and 13.3 months (regional) between vacancy and settlement for majority of ex-residents. I find these figures hard to believe. In my village there are a number of empty units, some vacant FOR YEARS. Is there a backlog of units on which exit entitlements are outstanding? How many? The cost of these outliers to the average could well drive operators broke if they have to be paid 6 months after new legislation is introduced.

  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.

    Implementation of both reforms should be retrospective. e.g if 42 day cap reformed alone, there is little benefit to RIHs. Recurrent fees will increase to cover village budgets. This will decrease the attractiveness of the village to new buyers making unsold units even harder to sell and exacerbating an already intolerable situation. if 6 months buyback reformed alone: RIHs will continue to pay recurrent fees until their unit is sold. Operators naturally prefer to sell units not paying recurrent fees. Unless operators can be penalised (perhaps charge interest of 5.54% when sales are unduly delayed) the situation will continue as happens now.

  11. Please provide any further comments on the reforms.

    There may never be a better time for these reforms to become law. House prices are improving and if the discussion paper recommendations are implemented retrospectively, people will have more confidence in retirement villages and be more willing to buy into one. Lets do it properly now.

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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