25 September 2023

Retirement villages face cost crackdown

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NSW Fair Trading has unveiled plans to crack down on retirement villages who charge former residents ongoing service fees and other costs after they’ve left.

In a statement, Fair Trading said it wanted to hear from retirement village residents and their families, operators and anyone involved with the sector about the reforms.

It has published a discussion paper to inform the consultation and said community feedback would help shape reforms and how they’re implemented.

It said most NSW retirement village residents continued to pay costs until their premises were sold and a new resident took up the accommodation.

“Outgoing residents may also face uncertainty and financial stress regarding payment of their exit entitlements.” Fair Trading said.

“Under the current laws, this payment can be delayed until their premises are sold and a new resident moves in.”

It said the proposed reforms addressed issues highlighted in the 2017 Inquiry into the NSW retirement village sector, including concerns about financial constraints on residents transitioning to aged care.

According to fair trading the Government had an intention to introduce a 42-day cap on the amount of time general service fees and charges must be paid.

It said the proposed reforms would require payment of exit entitlements to former residents within six months in metropolitan areas and 12 months in regional NSW.

The 54-page discussion paper can be accessed at this PS News link.

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