Leaving a retirement village

The information below is not for renters. If you are renting, please see our renting section.

Before leaving a village, you may wish to meet with your operator for a contract check-up meeting. At the meeting, operators are required to provide a verbal and written summary of all of the costs involved as if you were to leave the village on a set date, based on the terms and conditions of your contract.

For ‘registered interest holders’

You are a registered interest holder if you are:

• an owner in a strata or community scheme
• an owner of shares in a company title village giving your residence rights
• the holder of a registered long-term lease where you are entitled to at least 50 per cent of the capital gain that may be made by the time you move out.

Your right to live in your unit only ends when:

• the sale of your unit is completed (if you’re the owner), or
• your long-term lease is ended or assigned (if you’re a holder of long term lease of 50 years or more).

Selling your unit

If you decide to sell your unit, you will need to make the necessary arrangements just like you would to sell a property outside of a village.

• You can set the sale price and appoint a real estate agent to handle the sale.
• If you are using an external agent, operators are required to provide any information and assistance that is necessary to facilitate the sale of the unit.
• Or, you can ask the operator to sell your unit on your behalf – but you don’t have to use the operator if you prefer to use an external agent.
• The person who buys your unit will need to sign a sale of land contract with you as the outgoing resident as well as a village contract with the operator.
• If selling, you must refer anyone who is interested in buying your unit to the operator so they can provide the prospective resident with all necessary information about the village. In some cases, the operator may refuse to enter into an agreement with a purchaser (eg the person is under the minimum age to live there).

Selling costs

If you decide to leave your retirement village there will be costs, fees and charges involved.

• If you are entitled to keep 100 per cent of the capital gain made on your unit, you are responsible for all costs involved in selling the unit.
• Alternatively, if under the contract the operator is entitled to some of the capital gain made on your unit, the operator must also pay some of the selling costs. This amount will be in the same proportion as the capital gain is shared, which in most cases is around 50 per cent. However, if you wish to appoint an agent to sell your unit rather than using the operator or an agent selected by the operator, you alone will have to pay any commission to that agent.

Departure fees

Also known as an ‘exit fee’ or ‘deferred management fee’, a departure fee is the amount you have to pay when you permanently leave the village.

• This fee is paid to the operator when a resident leaves the village (and is usually deducted from the sale price of the unit).
• This payment is often a percentage of the ingoing fee, or the sale price, and is agreed to in the contract upfront.
• This fee can be a significant amount: check your village contract for details!
• Departure fees are a source of income for operators which can be used for purposes not covered by recurrent charges, such as improving or expanding the village services and facilities.
• Departure fees also allow for lower recurrent charges and greater flexibility with entry prices, enabling prospective residents to pay a lower upfront payment by agreeing to an amount being kept by the operator when they leave. This provides more people with access to retirement villages.

Ongoing charges for general services

Ongoing charges for general services (also called ‘recurrent charges’) go towards the upkeep of the village (eg village administration, gardening and maintenance).

Unregistered interest holders

Unregistered interest holders still have access to their 42-day cap. The new 42-day cap provision does not apply to residents who own a lot in strata, or community villages or own shares in company title or trust villages that give them a residence right.

Registered interest holders

• You must continue to pay recurrent charges for general services when you leave your unit. Payment generally continues until a new resident enters into a contract with the operator or starts living in the unit.
• If you share any capital gain made from the sale of your unit with the operator, you only need to pay for these general services for a maximum of 42 days after you leave. After this time, you and the operator share the cost of the recurrent charges in the same proportion as you share the capital gain.

You stop paying these charges as soon as you permanently vacate the premises.

Registered interest holders (who share in the capital gain 50 per cent or more)

New provisions apply to residents whose contract is in the form of a long-term registered lease that entitles them to at least 50 per cent of any capital gain (as detailed below).

42 day cap on recurrent charges from 1 July 2021

Village operators will only be able to charge residents for up to 42 days for general services (gardening, administration, cleaning, etc.) once they have permanently left the property. This will apply to residents on or after 1 July 2021, when their village’s financial year commences.

In relation to the 42 day cap, a person permanently leaves the premises, takes all their possessions and returns the key to the operator , or if the executor or administrator of the person’s estate provides vacant possession of the person’s residential premises to the operator of the retirement village.

Permanent vacation occurs if the former resident dies or moves out of the premises, or the executor or administrator of the person’s estate provides vacant possession of the person’s residential premises to the operator of the retirement village following the person’s death. This definition only applies when section 152 (Recurrent charges in respect of general services: registered interest holders) of the Act is being applied.

The 42-day period can be shortened if:

• the property sells earlier,
• the village contract allows for an earlier date,
• an incoming resident takes up residency, or
• the NSW Civil and Administrative Tribunal (the Tribunal) terminates the contract.

A shortened period would result in general service payments ceasing.

A registered interest holder may choose for whatever reason, to continue to live in the premises until the completion of the sale, and not terminate their contract until this occurs. In this circumstance the resident would continue to pay for general services they receive.

An exemption from the 42-day cap requirements will apply for trust villages where the trust is owned and run for the benefit of residents.

Ongoing charges 1 January 2021 and 1 July 2021

Between 1 January 2021 and 1 July 2021 only, a current resident who has moved out, can ask the operator to deduct these charges from their exit entitlement. The operator must action these payment, within 14 days after the request is made. A limit will be applied to increases in recurrent charges to ensure it only occurs as part of an approved budget for the next financial year after the former occupant’s liability has ceased. The operator will be limited to take into account those units that have become vacant since 1 January 2021, only. Going forward, operators will only be able to take into account vacancies from the previous financial year.

For example, in a 100 unit village, 10 became vacant in 2019/20 and 10 (all after January 2021) in 2020/21. In the 2021/22 FY budget the operator can set their budget based off 80 occupied units + 10 vacant units from 2020/21 FY as only 10 have become vacant in the previous financial year.

Repairs and renovations

You do not have to make any repairs or renovate your unit before you decide to leave the village. The operator cannot force you to do any work before selling your unit.

Some fixes and improvements may improve the re-sale value of your unit. However, make sure any changes are cost-effective and check first on the permissions you may need to make the changes.

Payments to you when leaving

The operator must pay you any refundable part of your ingoing contribution or proceeds from the sale of your unit, less any fees and charges.

• This should occur within 14 days after a new resident enters into a contract with the operator or when the operator receives full payment from a new resident for your unit. The same 14-day period also applies for any payments you are entitled to if you terminate your village contract during the settling-in period (also see the information in "What if I leave during a 'settling in' period?" on this page).
• If you own a unit in a strata retirement village, the proceeds of the sale of your unit will be paid to you by the agent, rather than the operator.
• If your village contract states that a share of any capital gain made on the sale of your unit must be paid to the operator, this amount will also be deducted from the proceeds of sale of your unit when you leave the village.

Orders for exit entitlement payments

In certain circumstances, a resident can apply for an order from the Secretary of Department of Customer Service, requiring the operator to pay their exit entitlement prior to the sale of the property. The Secretary can issue an order if the Secretary finds that an operator has unreasonably delayed the sale of the resident’s property.

This does not apply to strata schemes, company title and community title village residents.

For more information visit the applying for an exit entitlement order page.

Residents moving into aged care

The aged care rule is designed to facilitate a resident’s transition from a retirement village to an aged care facility. A financial mechanism has been created to support residents moving to aged care by requiring operators to pay a part of the calculated exit entitlement, up to 85 per cent, to an aged care facility as the resident’s accommodation payment if the resident requires the operator to do so.

The aged care rule only applies to registered interest holders with a long-term registered lease that gives them at least 50 per cent of any capital gain. Residents in strata schemes, company title and trust villages cannot access these provisions.

Residents can request that the operator can pay a portion of the resident’s estimated exit entitlement as a daily accommodation payment (referred to in the Act as the accommodation payment) to the aged care provider. It is intended that paying a portion of the resident’s exit entitlements earlier will assist residents to transition to aged care when they need this additional care.

A person whose Retirement Village Operator is paying their daily accommodation payment to an aged care facility, is entitled to seek an exit entitlement order two years after the date in which they first entered the aged care facility.

Residents can request their operator make accommodation payments on their behalf to an approved aged care provider.

Aged care rules applying to partners

The only way to access the aged care rule is if a former resident puts their property on the market for sale. One partner cannot remain in the residential premises while the other uses the aged care rule to move to residential aged care. The aged care accommodation would have to be funded in another manner.

Residents who have left a village and moved into aged card prior to 1 January 2021

Accommodation payment requests cannot be requested by former residents that have entered an aged care facility prior to 1 January 2021, however, they will still be eligible to apply for an early exit entitlement payment under an order once the prescribed period has been satisfied.

Details about the payments (for operators)

An operator is required to pay up to 85 per cent of the prescribed component (does not include capital gain amount) of the exit entitlement up until the property is sold.

An operator can apply to the Tribunal to obtain an extension of time in which to pay the accommodation payment, or not to have to pay the accommodation payment.

Payments will cease when:

• the 85 per cent threshold (as above) has been met,
• the former occupant (resident) does move into an aged care facility,
• the former occupant (resident) becomes entitled to an exit entitlement in accordance with Section 180,
• the former occupant (resident) requests the operator to cease making the payments,
• the former occupant (resident) passes an operator would be able to recover all amounts paid on behalf of a resident by deducting the total of such amounts from the resident’s exit entitlement,
• a resident using the aged care rule can apply for an exit entitlement order after 24 months of permanently vacating the retirement village and living in aged care.

Record keeping requirements under the aged care rule

The regulation details what information an operator must record when paying the accommodation payment.

Privacy protections

The Commonwealth Government administers aged care legislation. The NSW Government has responsibility for regulating retirement villages, not aged care.

Residents are not required to share any of their financial information with the operator to use the aged care rule.

Information the operator must provide to the resident receiving payment under the aged care rule

Information that must be recorded by the operator and provided to the former resident receiving payments under the aged care rule.

The operator must provide the former occupant with a summary document of the payments made to the aged care provider. This summary must be provided within six months after the first accommodation payment and then every six months after that. As a suggestion, information that could be recorded by the operator and provided may include:

• daily amount paid
• percentage of the lump sum payment being made
• running cumulative tally of amount paid
• total exit entitlement value
  date property sold
• completion payment of the remaining exit entitlement amount that was not paid under the aged care rule once the property is sold.

Applying for aged care accommodation payments

You must make a request in writing to the operator using this form.

Before you complete the form, you should review the eligibility criteria to make sure they are eligible to apply. You can use this flowchart to assist you in determining if you are eligible.

You should also have the following information and documents ready to include in your request:

• the date you entered, or propose to enter, the aged care facility
• the contact details for your village operator and manager
• the details of the aged care provider and facility where you are living, or intend to live
• the amount of each accommodation payment, and a copy of the accommodation payment schedule provided by the aged care provider
• the number of accommodation payments you want the village operator to make to the aged care provider on your behalf (this could be one, or more).

Flowchart to work out if you are eligible to receive Aged Care Accommodation Payments (PDF, 46.53 KB)

Form to request operator to make aged care accommodation payments (PDF, 119.47 KB)

For ‘non-registered interest holders’

You are a non-registered interest holder if you have a ‘loan or licence’ type of tenue, or a registered long term lease under 50 years.

Loan or licence arrangements are mainly offered by non-profit organisations such as church or charity village operators.

This arrangement allows you to live in the unit, but you do not own it or have a registered interest in it.

Selling your unit

When you permanently leave the village, the operator determines the sale price for your unit and all other aspects of the re-sale of your unit.

• You’re not required to pay any costs involved in selling your unit. These must be paid in full by the operator.
• You’ll receive any refundable money within 14 days after your unit is re-sold or re-occupied.
• If your unit is not re-sold or re-occupied, the operator must pay you your refund after six months from the date you move out unless your contract says otherwise.

Departure fees

Also known as an ‘exit fee’ or ‘deferred management fee’, a departure fee is the amount you have to pay when you permanently leave the village.

• The fee is paid to the operator when a resident leaves the village and is usually deducted from your ingoing contribution. This payment is often a percentage of the ingoing fee, or the sale price.
• This fee can be a significant amount: check your village contract for details!
• Departure fees also allow for  greater flexibility with entry prices, enabling prospective residents to pay a lower upfront payment by agreeing to an amount being kept by the operator when they leave. This provides more people with access to retirement villages.

Ongoing charges for general services

Ongoing charges for general services (also called ‘recurrent charges’) go towards the upkeep of the village (eg village administration, gardening and maintenance).

• You only need to pay for these general services for a maximum of 42 days after you leave. This is cut short if a new resident moves in during this time.
• If you (or your estate) fail to pay for any recurrent charges that are due, the operator can charge interest on the unpaid amount.

What about ongoing charges for optional services?

You stop paying these charges as soon as you permanently vacate.

Repairs and renovations

You’re only required to pay for repairs if a condition report was completed when you moved in.If one was, you must return the unit to the way it was when you moved in (as noted in the report).

You are only responsible for negligent, irresponsible or intentional actions that damaged the unit. You are not responsible for ‘general wear and tear’.

Some general examples:

What if I leave during the ‘settling in’ period?

This is the first 90 days of you living in your unit.

If you move out in the first 90 days, you don’t have to pay any departure fees and you’re entitled to a refund of the ingoing contribution or the proceeds from the sale of the premises plus any recurrent charges paid under the contract.

The timing for payment of the refund depends on the type of village contract.

Leaving when a village is closing

Retirement villages are marketed as offering permanent accommodation with the security of being able to live there for life.

It can be stressful to have to relocate.

The Retirement Villages Act 1999 recognises this and provides a long notice period and strict requirements to help protect residents' rights if an operator wishes to close a retirement village.

The main reason a retirement village might close is because the operator wants to sell the land to a developer so that the land can be used for another purpose. This is known as ‘change of use’.

If the operator wants to sell the site to another operator without any residents or wants to evict residents to put the price up, this is not considered to be ‘change of use’. Attempts to evict residents or coerce them into vacating in these situations is a breach of the Act.

Important – operators cannot evict anyone simply because they want to up put up the price of accommodation.

The process for closing a retirement village can be different depending on each circumstance.  This is a general guide:

Disposal of uncollected goods

From 1 July 2020, the Uncollected Goods Act 1995 can be used to dispose of goods left behind or abandoned by an occupant or resident at the end of an agreement.

See uncollected goods for more information on the rules for the disposal of goods.

What about compensation?

If the Tribunal terminates a resident’s contract and requires them to move, it may also order the operator to pay compensation for:

• removalist and utility expenses,
• loss of access to services or facilities,
• higher accommodation charges at the new location.

If a resident's contract is terminated by the Tribunal, the Tribunal will determine their compensation before they move. If a resident voluntarily vacates, they should negotiate with the operator to be paid compensation before they move.

Further information