Since 1 October 2013, Retirement Village operators have been
required to issue certain mandatory disclosure documents to
incoming Residents, being:
the standard form retirement village contract,
a general inquiry document; and
a Disclosure Statement.
These mandatory documents have been developed by NSW Fair
Trading and can be adapted by operators, so long as any additional
terms do not conflict with the Retirement Villages legislation or
regulations. Penalties may be imposed on operators who do not
adhere to these mandatory requirements.
Retirement Village Operators who have not as yet implemented
these changes should be reviewing their disclosure practices.
Following are some further mandatory changes to retirement
village contracts that will need to be recorded in agreements post
4 July 2014:
The date from which Residents are found to be "registered
interest holders" should be changed to the actual date they
acquired the interest, for example, the date of a Lease, (a
registrable interest), and not the date the Lease is registered.
This date is relevant to calculate any capital gain or capital loss
to which the Resident is entitled.
Alteration of the definition of "capital gain" to
provide clarity, so that sales costs are no longer associated with
the payment or calculation of the capital gain.
Alteration of the definition of "prescribed CPI
Variation" in respect to the date at which the rate of CPI is
calculated. The amendment now requires the applicable rate of CPI
will be the CPI published most recently before the date that was 12
months before the date of the proposed variation.
Removal of the words "following the sale of the
premises" from s.180 of the Act and replacing them with
"under a village contract" means now that a Retirement
Village Operator must repay an ingoing contribution within 14 days
where an event arises in accordance with that section e.g.
departure, death, termination of the Agreement, and this obligation
should be specified in all Retirement Village Contracts going
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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