After 18 months of consultation, the Minister for Better Regulation, Kevin Anderson, has announced that one of the key election promises based on recommendations from the independent report into NSW Retirement Villages conducted by Kathryn Greiner AO in 2017 will enter Parliament later this year.
Under the changes, if a ‘registered interest’ home remains unsold after six months in metropolitan areas or 12 months in the regions, village operators will have to pay out residents’ exit entitlements if they have not taken “reasonable steps” to sell the home.
“We promised to make retirement village fees fairer, and these reforms will put residents first, saving them thousands of dollars and giving them access to their exit entitlements sooner when they leave the village,” Mr Anderson said.
“Waiting extended periods of time to receive your exit entitlement can cause a financial and personal burden. That’s why we’re putting in a safety net that will require operators to buy back the unit from the resident if they don’t use their reasonable endeavours to sell it within the appropriate time period.”
The six months commences once the home is ready to be marketed, effectively adding up to three months to the process.
The reforms will also place a 42-day cap on the payment of recurrent charges for general services and establish a mechanism for village residents to transition directly into aged care with operators to cover the DAP until their home is sold.
The new regulations are also likely to put significant stress on operators to find the cash to pay out departing residents.
As we reported here, the introduction of 18 -month buybacks in Queensland had a major impact on operators’ cash flow, with law firm, MinterEllison, processing 100 buybacks on day one of their reforms – around $30 million in pay outs.
