Leaving a retirement village when it's closing
If a retirement village closes, residents have specific rights including a long notice period, alternative housing support and possible compensation if required to move.
Residents' rights when a village is closing
Retirement villages are marketed as offering permanent accommodation with the security of being able to live there for life.
It can be stressful to have to relocate.
The Retirement Villages Act 1999 (the Act) recognises this, providing a long notice period and strict requirements to help protect residents' rights if an operator wishes to close a retirement village.
Reasons for closure
Change of use
The main reason a retirement village might close is because the operator wants to sell the land to a developer so the land can be used for another purpose. This is known as ‘change of use’.
Sale without residents or eviction to put price up
If the operator wants to sell the site to another operator without any residents or wants to evict residents to put the price up, this is not considered to be ‘change of use’.
Attempts to evict residents or coerce them into vacating in these situations is a breach of the Act.
Part closure of the retirement village
In some cases, part or all of the retirement village may close for rebuilding, refurbishment or repairs. There are provisions for this under section 136 of the Act to ensure residents are given notice of when the closure will happen and what options there are for alternative accommodation and eventual return.
The retirement village operator may apply to the NSW Civil and Administrative Tribunal (the Tribunal) to end a resident’s contract. The Tribunal must be satisfied the operator plans to carry out major works to improve the village and needs the resident to move out.
The Tribunal will not approve the termination unless all of the following conditions are met:
- the operator has given the resident at least 12 months’ written notice of their intention to apply to the Tribunal
- the operator has obtained development consent and any other required approvals to carry out the works, and
- the operator has obtained or made available alternative accommodation acceptable or reasonably ought to be acceptable to the resident.
If the Tribunal ends a resident’s contract, it must set a vacation date and must specify penalties the operators will face if works are not substantially commenced, or action is not taken to facilitate the use of the land for the other purpose, within six months of the date set for the resident to vacate the premises. It may order compensation to the resident, and it may order the operator to allow the resident to return under a contract identical to the terminated contract on completion of the works.
As a resident, you should:
- review your contract for clauses about closure, repairs and exit entitlements
- understand your rights as a resident related to repairs and maintenance
- if it is a temporary closure for repairs, discuss with the operator the possibility of temporary relocation and importantly the conditions for returning
- consider getting independent legal advice to understand your rights and obligations.
What to expect from the closing process
The process for closing a retirement village can be different depending on each circumstance. This is a general guide.
Operator must tell residents
The operator may first tell residents by calling a meeting or distributing a letter that they intend to close the village. When this happens, you don’t have to move out or even start looking for other accommodation yet (if at all).
Operator must get development consent
The operator must first get development consent, usually from the local council. They must also get any other approvals that are necessary for the change proposed to the village. In most cases, residents, along with other affected members of the public, can lodge submissions with the local council at the same time. It may take some time for the council to consider the operator’s proposal, and they may decline development consent for several reasons.
If the operator does not have the required approvals, residents don’t have to think about moving yet.
Operator must find alternative accommodation
If the operator is planning to close the village, they must offer or help find alternative accommodation for the residents.
This accommodation must be approximately the same standard as the resident’s current home. This may be at another retirement village or in the general community.
It must not cost more to move to or live in than the resident’s current home.
Residents can reject an offer made by the operator:
- that’s not of the same standard or cost, or
- is located too far away from family or other social supports.
The operator’s first offer may not be the last one and a more suitable place may become available later.
Residents who choose to move should ensure they:
- negotiate a suitable timeframe with the operator
- do not face any costs to move to the new location.
No resident should feel pressured into moving or that they must go because other residents have left.
If a resident wishes to stay, they do not have to leave until ordered to do so by the NSW Civil and Administrative Tribunal (the Tribunal).
Operator must apply to the Tribunal
The operator must get all required approvals (for example, from local council) and work with residents to find alternative accommodation before applying to the Tribunal.
The operator must then apply to the Tribunal to terminate each remaining resident’s contract.
Residents must be given at least 12 months' written notice of the operator’s intention to apply to the Tribunal.
The operator must prove their case to the Tribunal.
Each resident will also have the right to state their case.
The Tribunal may or may not make a termination order. It will consider factors such as:
- a resident's age
- a resident's health condition
- undertakings given to residents by the operator when they moved in. For example, they were told they could stay for life.
A resident can agree to move voluntarily instead of going through the Tribunal process, but this should be their own decision. They should not feel pressured into moving or feel that they must go because other residents have left.
Compensation for moving
If the Tribunal terminates a resident’s contract and requires them to move, it may also order the operator to pay compensation for:
- removalist and utility expenses
- loss of access to services or facilities
- higher accommodation charges at the new location.
The Tribunal will determine a resident's compensation before they move if the Tribunal terminated their contract.
If a resident voluntarily vacates, they should negotiate with the operator to be paid compensation before they move.
Contacts for retirement village information
Find a list of useful contacts for retirement village residents, owners, prospective residents and their families.