The NSW Government last week announced its recommended buyback regulation after consultation with the sector and resident association.
The previous Minister responsible for retirement villages, Matt Kean, had made the election promise of mandated buybacks after village homes had been vacant for six months in metropolitan regions (including Wollongong, the Central Coast and Newcastle), and 12 months for country regions.
It came out of the Kathryn Greiner report on the sector following the Four Corners program of June 2017.
The new reforms will now give a resident who is a registered interest holder (is named on the title and shares in the capital gain or loss) the right to apply to the Department of Customer Service for an exit entitlement payment if they feel an operator has “unreasonably delayed” the sale of their property.
The onus will be on the operator to demonstrate that they have used every reasonable endeavour to market the property. The adjudication will be made by the Secretary of the Department of Consumer Affairs.
The policy won’t apply to residents in strata, freehold, company and trust properties.
The trigger point for the clocks to start ticking is the actual handing over the keys for the property to be marketed – meaning after it has been prepared for sale (cleared, contracts prepared and refurbishments completed). This is likely to add around three months to the process.
42 days recurrent fee waiver
The planned 42-day time limit on payment of fees for recurrent charges for general services (e.g. office management, gardening) after a registered interest holder leaves a village will go ahead and apply to all present and future residents.
The 42-day time limit commences after the resident leaves the village.
‘Aged care rule’
The RLC brought to the Government, which they accepted, the following solution to provide for residents transitioning from the retirement village home to residential aged care.
Where a resident wants/needs to move into aged care accommodation and is unable to afford it, the operator will now pay a portion of the resident’s estimated exit entitlement as a Daily Accommodation Payment (DAP) to the aged care provider.
This will be limited to no more than 85% of the operator’s reasonable estimate of the amount of the resident’s exit entitlement and the payments will be able to be recovered by the operator.
This policy will not apply to strata, freehold, company title or trust arrangements.
Note: these regulations are now being developed as legislation which will then need to be passed by Parliament – which is not expected before Christmas.