The NSW Parliament have today passed the NSW Retirement Villages Amendment Bill 2020 which outlines new legislation addressing mandatory exit entitlement payments as promised at the last state election. Importantly, this Bill relates only to registered interest holders’ arrangements.
A commencement date is pending for the new legislative arrangements, which will require NSW retirement village operators to:
- pay the amount a resident will be entitled to once their 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
- pay part of the resident’s exit entitlement directly to an aged care facility in which the resident resides or proposes to reside instead of to the resident, in certain circumstances where the premises in the retirement village have not yet been sold
- 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
It’s worth noting that the amended legislation outlines strict criteria around who is and isn’t eligible to apply for exit entitlements prior to a sale. Those ineligible include residents under strata, freehold and trust arrangements, as well as resident’s estates or beneficiaries.
It is anticipated these amendments will come into play from 1 January, 2021, although this is to be confirmed.
You can read the amended legislation here, or more information contact our offices.