The Property Council has concerns about the impact the current exit entitlement policy will have on the retirement living industry. The Property Council is not opposed to an exit entitlement policy, and that is why we are proposing an alternative approach, one which supports residents as well as ensures the retirement living industry remains viable.
The current NSW Government proposal will require a retirement village operator to sell or buy back a unit within six months of a person leaving a retirement village in metropolitan areas and 12 months in regional NSW.
These proposed timeframes will result in:
- Significant reduction in access to capital and debt, resulting in a withdrawal of investment in seniors housing, both current and new, by all size of operators;
- Reduction in the choice of contract for the incoming resident;
- Forcing smaller operators into liquidation; and
- Decreasing sales prices of the dwellings, impacting both the operator and residents.
The Property Council recommends:
- For new residents, every operator must offer at least one contract option that includes:
- for residents who live in a village in the Sydney metropolitan area, a requirement for the resident to be paid their exit entitlements at 6 months (from vacant possession)
- for residents who live in a village in a regional area, a requirement for the resident to be paid their exit entitlements at 12 months (from vacant possession)
- Introducing protections for residents moving to aged care by implementing an Aged Care Rule, similar to that which applies in South Australia
- A safety net mechanism which requires the resident to be paid their exit entitlement after 18 months (from vacant possession). This should not apply to owner residents.
- A reduction in the period for which a registered interest holder resident is required to contribute to recurrent charges to a maximum period of 6 months after departure.
The Property Council proposal will achieve the Government’s objectives as well as ensure that residents still have choice and are not in financial hardship.
The industry holds a strong commitment to find solutions giving residents and their families certainty on departures alongside ensuring the continued sector viability
Any questions or would like to meet to discuss?
Emma Ashton – Senior Policy Advisor on email@example.com