Residents with a long-term lease at a retirement village will in most cases not receive their exit entitlement from the village on the day they leave.
Generally, you are not entitled to your exit entitlement payment until 14 days after a new resident has paid for or moved into the unit.
If there is a delay in reselling the unit, and you are classed as a non-registered interest holder, you are entitled to receive your exit entitlement no later than the date that is 6 months from the date you moved out.
A non-registered interest holder includes a resident who either has a lease of less than 50 years or who is entitled to less than 50% of the capital gains on resale of the unit.
But if you are a registered interest holder (meaning you have a lease of at least 50 years and are entitled to at least 50% of the capital gain on the resale of the unit), you may be left waiting for your exit entitlement payment until the unit re-sells. In certain limited circumstances a resident may be entitled to obtain an order for early payment known as an Exit Entitlement Order.
Outgoing residents may find themselves in dire straits without the money to pay for their new accommodation, which can be very stressful and costly when moving into aged care.
However, since July 2021, the NSW Retirement Village legislation was amended to make things easier for residents moving into aged care.
If a registered interest holder is going straight from the retirement village into a residential aged care facility, they can direct the village operator to make payments towards the resident’s aged care accommodation fees.
Limitations:
- The operator can be asked to pay the daily accommodation payment, but not the refundable accommodation deposit.
- The operator can only be asked to pay up to a maximum of 85% of the exit entitlement that is due to the resident.
- The payment is deducted from the resident’s exit entitlement – the operator is not paying for the resident’s daily accommodation costs, they are making the resident’s exit entitlement available to them earlier than they have to, solely for the purpose of paying the daily accommodation fees.
- This provision does not apply residents in strata schemes, company title or trust villages.
If eligible under this provision, the operator must make the first payment to the aged care facility within 28 days of receiving your request.
Benefits:
- This allows residents to transition to aged care when they need to.
- If the unit is not resold within 2 years, the now aged care resident can seek complete payment to them of their refund after 2 years from entering the aged care facility.
These are only some of the legal provisions that may apply on leaving a retirement village. It is best to get expert legal advice to know your rights and obligations and facilitate as smooth a transition as possible
