Companies, NSW Conveyancing and NSW Business and Franchise

“ Contents ”

“ Retirement Living Council Retirement Villages – Fair Trading NSW ”

“ Purchase of Real Property (NSW) Sale of Real Property (NSW) ”

“ The application of the statutory regime depends on the determination of the following core issues: Whether a resident is either: ”

“ The standard contracts and the statutory regime combine the residency rights discussed above into two groups: Registered interest holders – Including freehold title, company title, and registered longterm leases entitling the resident to at least 50% of any capital gain, and registered longterm ... ”

“ A payment for freehold title is referred to as a purchase price and is not usually refundable by the operator on exit. The former occupant is responsible for obtaining the new entry payment from the person who buys the premises. Any other lump sum payment made under a residence contract or in ... ”

“ The usual consideration should be given to the need for the appointment of an attorney, general or enduring, and also to the appointment of an enduring guardian. This is most likely to come into play where a resident loses capacity during residency and needs to move on to serviced living ... ”

“ The purchase price or ingoing contribution paid for a right to occupy a dwelling within a retirement village, and to be used as a principal residence, will not be included in the asset test for the age pension. The definition of ‘retirement village’ for pension purposes is broad: s 12(3) Social ... ”

“ If the purchase price or ingoing contribution falls under the ‘extra allowable amount’ set out within s 1148(2) of the Social Security Act 1991, the resident will be entitled to rental assistance which can be put towards paying recurrent charges. Although an advertised purchase price or ingoing ... ”

“ The NSW Government has developed mandatory standard contracts which apply to all village contracts under lease or licence, and to all services contracts associated with a residence right under freehold or company title. An agreement to lease or licence usually accompanies these contracts. It is an ... ”

“ The standard contracts are generally composed of: key terms setting out the parties names, the premises and the type of residence rights being offered; ”

“ Section 18(1) of the Act requires an operator to provide a general inquiry document within 14 days after becoming aware that a person is a prospective resident or is acting on behalf of a prospective resident. This includes family members and advisors acting on behalf of the prospective resident. ... ”

“ Section 18(3A) of the Act requires an operator to publish a disclosure statement in the form prescribed within Part 2 of Schedule 1 of the regulations. The disclosure statement must be dated and signed by the operator and annexed to the village contract. It is an offence to enter into a village ... ”

“ Where a retirement village has rules dealing with the use, control or management of the village, a copy of the rules must be annexed to the village contract. In the case of a strata or community land scheme, bylaws under those schemes will apply instead of village rules. Any rule that is ... ”

“ Village contracts under freehold title involve residential land, and thus require a contract for the sale of land, in writing, attaching the mandatory documents as set out within s 52A of the Conveyancing Act 1919 and r 4 and Schedule 1 of the Conveyancing (Sale of Land) Regulation 2017 (NSW). The ... ”

“ A typical retirement village lease is made up of a NSW Land Registry Services lease dealing form 07L, terms and conditions, often in the form of a registered memorandum, and a plan identifying the premises. When acting for couples, the lease must specify whether they are entering as joint tenants ... ”

“ Stamp duty Residence rights granted under freehold and company title are liable to stamp duty. A lease premium paid on the transfer of an assignable lease is also dutiable. Ad valorem rates apply on either the market value or consideration paid, whichever is greater. ”

“ Interest Once a prospective resident demonstrates an interest in becoming a resident, the operator has 14 days to provide the prescribed general inquiry document. ”

“ Within seven days of a prospective resident’s request the operator must make available the documents set out within s 20 of the Act and r 12 of the regulations. These documents include: a site plan for the village; ”

“ A seven day coolingoff period commences from the day the operator receives the signed village contract: s 32 Retirement Villages Act 1999. This period may end sooner: ”

“ The operator can recover its legal and other expenses incurred in connection with the preparation of a village contract from the resident. These costs are usually paid at completion but occasionally will be claimed on exchange. For freehold and company title, recovery of legal costs is governed by ... ”

“ The operator must pay any refund due to a former occupant within 14 days of the new resident moving in, paying the balance of the ingoing contribution or, in the case of a registered interest holder, entering into the village contract. This 14-day refund period does not however apply where the ... ”

“ The resident will be allowed to move in when they have paid the balance of the ingoing contribution, certain legal costs of the operator, completed a condition report, and entered into a residence contract, service contract or both. A condition report is not required where the resident is a ... ”

“ A 90-day settling-in period commences on occupation. The resident may terminate the village contract within this period by vacating permanently or, in the case of a service contract, by providing a notice to terminate to the operator. The operator must refund all money paid by a non-registered ... ”

“ Recurrent charges are payable for the duration of the residency, and in some cases beyond, depending on the terms of the contract. These charges include any amount payable under a village contract, on a recurrent basis, by a resident and include rent. The Act excludes from this definition: ingoing ... ”

“ See generally ss 112 to 119 Retirement Villages Act. A proposed annual budget given with 60 days notice and, if required, consented to by a majority of residents or the Tribunal, will become an approved budget. Expenditure of recurrent charges must be in accordance with the approved annual budget ... ”

“ Quarterly accounts Section 118E of the Act requires an operator to provide the Residents Committee, if any, with a copy of the quarterly accounts of the income and expenditure of the village, within 28 days after the end of the quarter. ”

“ Residents Committee The majority of retirement villages have a Residents Committee elected by the residents: s 70 of the Act. The contact details of the current secretary or chairperson must be shown in the disclosure statement of the general enquiry document. ”

“ Rules of conduct for operators of retirement villages Schedule 3A of the Retirement Villages Regulation 2017 prescribes the Rules of Conduct for Operators of Retirement Villages. The rules cover operator professionalism, training, competencies, performance and behaviour in connection with the ... ”

“ While maintenance can be funded through recurrent charges, replacement cannot. An operator can use recurrent charges for this as provided for in the approved annual budget, but must use other unregulated funds for replacement of items of capital that it is responsible for. The approved annual ... ”

“ Village operators will need to prepare and maintain an emergency plan for the village and ensure that all residents and staff are familiar with the plan. Village operators will need to undertake an evacuation exercise for residents at least once each calendar year, to display key safety ... ”

“ – Commencement date yet to be set Section 101A of the Act requires an operator to ensure that an up-to-date asset management plan for the items of capital for which the operator is responsible is prepared in accordance with the regulations. ”

“ On death, all property of the resident vests in the NSW Trustee. If the resident had a valid will, then on grant of probate all property vests in the executor. If there is no will, an eligible person may apply for letters of administration and the property will vest in the administrator from the ... ”

“ Permanent vacation and termination of residence rights ”

“ Recurrent charges for general services for registered interest holders are dealt with in s 152 and for non-registered interest holders in s 153 of the Act. Optional services ”

“ The departure fee is covered in Division 3 of Part 10 of the Act. A departure fee is: ”

“ It is usual for operators to provide for a non-refundable component of the ingoing contribution and this must be set out in the disclosure statement or village contract. It is usually represented as a lump sum or a percentage of the entry payment. This is not a ‘departure fee’ as defined by the ... ”

“ While the sharing of any capital gain and capital loss as between an operator and former occupant is not regulated under the Act, any sharing must be disclosed in the disclosure statement and the village contract. As with departure fees, the formulation for the sharing of capital gain is open to ... ”

“ Repair and refurbishment are dealt with in Division 4 of Part 10 of the Act. While ‘refurbishment’ is defined in the Act, reinstatement is not. Refurbishment means any improvement of the premises in excess of that required to reinstate the premises to the condition they were in, fair wear and tear ... ”

“ A former occupant who is a registered interest holder has a right to appoint any agent of their choosing and to set and revise the listing price: ss 166 and 168. If an agent other than the operator is appointed, the resident must advise the operator of the details set out in s 168(6) of the Act to ... ”

“ Jurisdiction of the Tribunal Section 129(2)(f)-(h) provides for how and when the Tribunal can terminate a residence right or contract. There is no monetary limit on the jurisdiction of the Tribunal: s 127. ”

“ Where a contract provides for an operator to provide a refund to a former occupant following permanent vacation, the Act stipulates when such a refund is payable. At the same time payment is made, the operator must give the former occupant a statement showing how the amounts were calculated: ... ”

“ A former occupant can apply to the Tribunal for an order directing an operator to pay an overdue refund together with interest: ss 180(4) and 181(7). The prescribed rate of interest to be charged on the unpaid amount is set out in r 36.7 of the Uniform Civil Procedure Rules 2005 (NSW). This is ... ”

“ The first step in the dispute resolution process is for the village’s internal dispute handling procedures to be followed. Where that is not an option or that has failed to resolve the dispute, Fair Trading NSW’s Property Enquiry / Complaint - Dispute Details form should be completed, also linked ... ”

“ See Fair Trading NSW’s Retirement Villages – Disputes for details on mediation and the retirement village complaint service. Regulations may make provision for the mediation of disputes arising under the Act, including the circumstances where mediation will be mandatory: s 203(d) Retirement ... ”

“ The NSW Civil and Administrative Tribunal is the primary venue for dispute resolution under the Act and regulations. See Part 8 of the Act and Part 6 of the regulations. Section 123 of the Act sets out the jurisdiction of the Tribunal and s 128 of the Act specifies some of the orders that the ... ”

“ A resident, residents or an operator can apply for an order. Two or more residents who claim that a dispute has arisen may nominate, in accordance with the regulations, any resident as their representative in the dispute. The nominated representative may apply to the Tribunal for an order in ... ”

“ The NSW Civil & Administrative Tribunal’s Retirement Villages Application form is available on the matter plan. Proceedings are dealt with in the Consumer and Commercial Division. After lodging the application for orders to resolve a retirement village dispute, a first hearing can be expected ... ”

“ Enforcement is dealt with in Part 5 of the Civil and Administrative Tribunal Act 2013. A certificate can be obtained from the Registrar of the Tribunal for the amount owed and filed in the appropriate court for enforcement as a judgment. See s 78 of the Civil and Administrative Tribunal Act 2013. ... ”

“ Applying to the Tribunal Part 6 of the Civil and Administrative Tribunal Act 2013 deals with appeals generally, including external appeals, internal appeals and appeals to the District and Supreme courts. ”

“ When finalising a matter it is important to terminate the retainer. This informs the client in writing that all work on the matter is complete and that no further work will be undertaken unless the firm is otherwise instructed. If the matter is finalised in such a way that the client retains ... ”