ByLawyers News and Updates

Retirement villages – NSW

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Following recent changes to the Act, the Retirement Villages Amendment (Asset Management Plans) Regulation 2021 and the Retirement Villages Amendment (Exit Entitlement) Regulation 2021 have now commenced.

Asset management plans

The regulations require operators to maintain an asset management plan for each village they manage or operate. They must have a copy available for inspection at all reasonable times by a resident, prospective resident or a person acting on their behalf.

Operators must also prepare a 3-year report for capital maintenance, extracted from the asset management plan, to inform expenditure for major items of capital in the annual budget.

Exit entitlements, recurrent charges and right of entry

The regulations also affect exit entitlements and recurrent charges. They provide that an operator may enter premises in certain circumstances to facilitate the sale of the premises.

By Lawyers keeps you up to date

The By Lawyers Retirement Villages (NSW) guide has been updated accordingly. The effect of the new regulations is detailed in the commentary. There is also a new precedent ‘Letter to client providing advice on village contract’ which has been added to Folder B on the matter plan. The Retirement Villages (NSW) guide is included in our Conveyancing (NSW) publication.

See our related Obiter post Retirement Villages (NSW) – Amendments concerning the recent amendments to the Act.

Retirement Villages (NSW) – Amendments

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Retirement Villages Amendment Act 2020

The Retirement Villages Amendment Act 2020 has introduced significant changes to exit entitlements, recurrent charges and has enhanced the rights and safeguards of registered interest holders.

Recognising that more than 60% of retirement village residents directly transition into aged care accommodation and that the average age of a person entering a retirement village is 75 and the average age of residents is 81 and more people will be moving into aged care accommodation, the Retirement Villages Amendment Act 2020 address the easing of the financing of the transition.

Most notably, the Act has amended the Retirement Villages Act 1999:

  • to enable the Secretary of the Department of Customer Services to make an order requiring an operator to pay a resident the amount the resident will be entitled to once their residential premises are sold – the exit entitlement – in circumstances where the resident has moved out or intends to move out, and the premises have not yet been sold.
  • To require an operator to pay part of the resident’s exit entitlement directly to an aged care facility in which the resident resides or proposes to reside as payment for accommodation in the facility, instead of paying the exit entitlement to the resident, in circumstances where the premises in the retirement village have not yet been sold.
  • To provide that a former resident of residential premises in a retirement village is not required to pay recurrent charges to the operator of the retirement village once 42 days have passed since the former resident permanently vacated the premises.

The By Lawyers Retirement Villages (NSW) Guide has been updated accordingly. This guide is available within the Conveyancing (NSW) publication.

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