The NSW government has introduced the Retirement Villages
Amendment Bill which contains a number of changes that will, if
passed, have a significant impact on the operation of
retirement villages in NSW.
One of the highlights of the Bill is a new definition of
Defining 'capital gain' is a welcome
response to confusion in the industry arising out of the
decisions of the NSW Consumer, Trader and Tenancy Tribunal
(Tribunal) in the cases of Hayes v Fernbank Developments
Pty Limited (2006) and Turner as executors of will of
late Lloyd Edgehill Turner (2007). The new definition
removes the uncertainty as to how it is determined whether an
outgoing resident is entitled to at least 50% of capital gains
achieved in respect of their premises, which is integral to
their classification as an 'owner' or
'non-owner' under the existing Retirement
Other proposed amendments of significance include:
The replacement of the concept of an
'owner' with the new term 'registered
interest holder'. The change in terminology will have
limited practical effect.
The automatic creation of a charge to secure the
repayment of ingoing contributions to residents who are not
registered interest holders. This could create issues for
operators looking to refinance as the charge in favour of
residents will have priority over any newly created
The creation of a 90-day settling-in period during which
residents may elect to terminate their resident contract. The
operator will need to repay all amounts paid by the resident,
less fair market rent, repairs for damage and a reasonable
A requirement to notify the Registrar-General that land
is used as a retirement village.
A requirement to provide prospective residents with a
'general inquiry document'. The content of
this document will be specified in the yet to be published
regulations, and will be in addition to the currently used
disclosure statement which will need to be provided
Where recurrent charges do not increase by a fixed
formula, a right for operators to increase those charges by
CPI without approval from residents.
A reduction in the time that former residents are liable
to continue paying recurrent charges. There are new rules
regarding former registered interest holders paying a
proportion of recurrent charges based on their entitlement to
a proportion of capital gains.
An obligation on the operator to make good any deficits
in the annual accounts of the village, subject to some
A right of a former resident to ask the Tribunal to
recalculate a payment made by the operator to the resident in
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The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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