Some key provisions in the Retirement Villages Act 1999 (NSW) (the Act) will be amended from 4 July 2014 with the commencement of the Statute Law (Miscellaneous Provisions) Bill 2014 (the Bill).
In summary, the key provisions of the Act amended by the Bill are as follows:
- The definition of “registered interest holder” at section 7 of the Act has been amended to change the term “registered” in the definition to “registrable”. This means that a resident will be treated as a registered interest holder without the lease having yet been registered at Land and Property Information NSW (LPI).
It removes the risk of a resident being classified as a non-registered interest holder for the period between occupying the premises and the lease being registered. In practice, there are sometimes delays with registration due to mortgagee’s consent, surrenders of lease being registered or the LPI experiencing delays.
- The definition of “capital gain” at section 7A of the Act has been amended to remove the words “less any costs associated with the subsequent sale or lease of the premises”. This amendment in our view improves the provision and removes the issue of any sale costs being tied up in the payment or calculation of capital gain.
- The meaning of “prescribed CPI variation” at section 102A of the Act has been amended so that at subsection (a), a variation in recurrent charges is calculated at “the CPI published most recently before the date that was 12 months before the date of the proposed variation”. This section currently states “the CPI published most recently before the village contract was entered into”.
- Section 180 of the Act relating to the payment of a refund to a former occupant who was a registered interest holder has also been amended so that the note at the beginning of the section is removed and the terms “following the sale of the premises” are replaced with “under a village contract” at subsection 180(2).
This amendment brings consistency to other parts of the Act. It confirms the intention of the section that an operator’s obligation to repay an ingoing contribution under a village contract arises within 14 days of the specified events set out in the section including ‘entering into a village contract’.
Operator’s should review their processes, particularly in relation to when they enter into a contract and the payment of a refund to outgoing residents who are registered interest holders to ensure that they are making payments in accordance with the timeframes set out under the Act.