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When do I get my refund on leaving the retirement village?

Richard McCullagh - Tuesday, October 18, 2011

When do I get my refund on leaving the retirement village?

SHORT ANSWER

You are entitled to a refund shortly after a new resident moves into your dwelling.  In some cases, this is due 6 months after you permanently vacate the dwelling even if no new resident has moved in by then.

LONG ANSWER

1.  In some cases, the operator has to pay your refund within 14 days of the earlier of when

  • the succeeding resident 
    • moves into your dwelling, or
    • pays the full ingoing contribution to the operator, or 
    • enters into a village contract with the operator, or 
  • the operator enters into a residential tenancy agreement with respect to your dwelling, whether with the new resident or someone else
    • unless that agreement specifically excludes the provisions of the Retirement Villages Act, or
  • some other person otherwise moves into the dwelling with the operator's consent.

This applies if you occupied your dwelling as a 'registered interest holder' under a lease that is 

  • registered, and
  • has a term of at least 50 years, or is a life tenancy, and
  • entitles you to at least 50% of any capital gain.

2.  In other cases, the operator has to pay your refund within 6 months of your permanently vacating your dwelling if none of the events above have occurred within that time. 

This applies to 'non-registered interest holders', eg if your residence right is in the form of 

  • a licence, or
  • a lease that is
    • not registered, or
    • is for a term of less than 50 years, or
    • entitles you to retain less than 50% of any capital gain.

If you are entitled to some, but less than 50%, of the capital gain, your share is payable later when a new resident moves in if he or she pays a higher ingoing contribution than you paid. This is a top-up to your partial refund due 6 months from permanent vacation.

3.  In other cases, it is not the operator who has an obligation to pay you a refund. Rather, it is the succeeding resident moving into your dwelling that has the obligation to pay you the purchase price.

This applies if you occupy under, for example,

  • strata title
  • community title
  • company title without a separate lease, or
  • leasehold title where the balance of the term of the lease is assigned (or sold) to the next resident.

4.  Finally, if your contract provides for an earlier time for payment than as set out above, your contract will prevail.