The long awaited NSW Retirement Villages Amendment Bill 2020 (Bill) has received Royal Assent. The Bill will amend the NSW Retirement Villages Act 1999 (RV Act) by introducing a timeframe for paying a resident’s exit entitlement, a cap on the period during which recurrent charges are payable by an outgoing resident after they permanently leave the village and an aged care rule.
These reforms only apply to residents who are registered interest holders who are granted a long term lease where they are entitled to at least 50% of any capital gain. The reforms do not apply to residents in a strata scheme, community scheme or company title village.
A link to the bill is here.
Below is a summary of the key changes to the RV Act.
Exit entitlement orders
Aged care payments
- If a former registered interest holder has moved into an aged care facility, has not yet received their exit entitlement and the premises have not yet been sold, the former resident can request that the operator pay the daily accommodation payments due to the aged care facility provider, on behalf of the former resident. The payments must be made at least 28 days prior to entry into the aged care facility, or within 28 days of the request if the former resident has already entered the aged care facility.
- The maximum amount which is payable by the operator is an amount equal to 85% of the prescribed component of the former resident’s exit entitlement.
- Within 28 days of the former resident’s request, an operator can apply to the Tribunal to extend the timing of the first payment, or to be exempt from making payments on hardship grounds.
- If the former resident is of the opinion that the exit entitlement was calculated incorrectly, they can apply to the Tribunal for an order to request the village recalculate the amount and pay any additional amount because of the recalculation. The Tribunal may also order the payment of interest on the additional amount.
Cap on recurrent charges
- A former resident who is a leasehold registered interest holder will not be liable to pay recurrent charges 42 days after vacant possession (including the return of all keys to the operator). In the case of a deceased estate, this is the date that the executor or administrator delivers up vacant possession .
- The new provisions will commence at the beginning of the first financial year for the village commencing on or after 1 July 2021.
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