Release of Standard Form NSW Retirement Village Contract – Have Your Say

by Jessica Smythe and Ilana Brooks of Gadens Lawyers, Sydney
On 29 March 2012 NSW Fair Trading Minister Anthony Roberts released the much anticipated draft standard form retirement village contract for public consultation.
The standard form contract will be mandatory and operators must use the standard form for all new village contracts entered into after the standard form contract comes into effect. 
The consultation draft closely mirrors the terms of the Retirement Villages Act 1999 (NSW) and appears user friendly.
The standard form contract is comprised of five parts:
  1. Key Contractual Terms such as party names and identification of premises.
  2. Financial Terms which include entry payments, recurrent charges, capital gain/loss, departure fees, refund payments and liabilities on termination.  The contract provides standard terms for each of these items as well as allowing scope for operators to depart from these standard terms and insert their own formulae, structures and calculations for some items including capital gain/loss, departure fees, refund payments and liabilities on termination.
  3. Standard Terms which relate to key aspects of retirement village living. These standard terms reflect the different types of tenure structures of village residents such as registered interest holders and non-registered interest holders, and the intention is that once the contract is finalised for a particular resident the clauses which are not applicable to their type of tenure are removed.
  4. Additional Terms is a blank section of the contract where operators will be able to insert their own additional terms to the contract.  While amendments to the standard terms will not be permitted, additional terms may be added provided they do not conflict with the retirement village laws or the standard terms.
  5. Annexures and Definitions provides for different documents to be annexed to the contract such as the disclosure statement, and contains the defined terms used in the contract.
The public is invited to provide their comments in relation to the consultation draft.  Submissions to NSW Fair Trading will close at 5pm on Friday, 18 May 2012.
On completion of the consultation period, the feedback will be considered and any necessary amendments will be made. The standard form contract will then be finalised, published and prescribed into law through amendments to the Retirement Villages Regulation 2009 (NSW).
NSW Fair Trading anticipate that the standard form contract will be published during mid 2012 and have confirmed that sufficient lead time will be given to operators to update their existing contracts and associated procedures.
NSW Fair Trading has also confirmed that the NSW Government intends to look at the disclosure requirements under the retirement village laws once the standard contract has been finalised.
To view the consultation draft, click here.
Please contact Gadens Lawyers if you would like advice or assistance in relation to the preparation and lodgment of submissions with NSW Fair Trading or would like to understand the implications of a standard form contract for your village.
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This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.