‘Dudded’ retirement village residents gain refuge
THERE’S good news for residents in the North Coast’s ever-expanding retirement villages with the introduction of new laws to protect their exit entitlements.
NSW Parliament recently passed legislation increasing safeguards around the sale of retirement village property and providing early access to their financial entitlements to meet the cost of moving into aged care.
Retirement Village Residents Association president Jim Gibbons said the new laws would help ensure vulnerable residents needing care would not be left to “wither on the vine” by “unscrupulous operators”.
Under the previous system, residents may have had to wait years for their property to be sold before receiving exit entitlements, which are calculated by taking into account the owner’s initial buy-in plus any capital gains, minus a delayed service fee based on length of occupation.
Residents also had to continue paying regular maintenance fees even if they moved out, but under the new laws payment of those costs is capped at 42 days.
“Your capital funds can just erode and there was no incentive for an unscrupulous operator – not every operator – to sell the property over any other.”
“Now, if your unit hasn’t been sold you will be entitled to go to the (Department of Fair Trading) and ask them to … force the operator to pay you out.”
While Mr Gibbons said he would have liked to see some of the changes go further, with the onus now on the operator to prove they are not delaying the sale, there was compromise on both sides.
“It is not in the interests (of residents) to send the operators broke, but we want somewhere to turn.
“At the moment we have nowhere to turn when we are being dudded.”
The second big change will allow those going into residential aged care to have village operators pay the daily cost of care while their home is on the market.
The cost will later be subtracted from the exit entitlement.
Coffs Harbour MP Gurmesh Singh said the changes would assist residents with a “level playing field” and create a fairer retirement village market.
“More than 60 per cent of residents transition from villages directly into aged care accommodation,” he said.
“However, under the status quo, many can’t afford these costs if their unit does not sell quickly,” Mr Singh said.
“Under the reforms, the operator will need to cover a portion of the estimated sale price and pay this directly to the aged care provider, allowing a seamless transfer.”
Mr Gibbons said the ideal scenario would have seen exit entitlements paid out within six months all over the state, but he recognised the challenges posed by diverse property markets.
There is often a correlation between the strength of the market and the demand for retirement village living given most people sell their home to cover the cost of entering a village.
“If the property market is strong there are plenty of people prepared to sell the family home and therefore plenty of customers waiting to get into retirement villages,” Mr Gibbons said.
“But if the property market is depressed, then the number of people prepared to move diminishes.”