Vacating premises recurrent charges

When do recurrent charges apply for optional services?

Where a resident has been temporarily absent from the residential premises for at least 28 days, the resident is not liable to pay recurrent charges for optional services for the remainder of that period of absence.

If the resident has moved out of the premises, the liability to pay recurrent charges for optional services ceases as from the date the resident moved out.

Where a resident has passed away, the liability to pay recurrent charges for optional services continues until the date on which the operator is notified of the resident’s death. Understandably this may be a difficult time, but it is important you formally notify the Operator to avoid any dispute arising.

Where an Operator and a resident or former resident can’t reach agreement on the proportion of recurrent charges payable for optional services, either may apply to the Tribunal for (and the Tribunal may make) an order apportioning the resident’s or former occupant’s recurrent charges between optional services and general services.

When do general services recurrent charges apply for registered interest holders?

Where a registered interest holder resident permanently vacates the residential premises, the liability for payment of recurrent charges for general services that arise after the former occupant permanently vacated the residential premises ceases on which ever situation outlined below, occurs first:

• The date on which the operator of the retirement village enters into:
  • a village contract with an incoming resident, or
  • a residential tenancy agreement with an incoming tenant, in relation to the premises
• the date on which a person takes up residence in the premises with the consent of the operator
• if the operator buys the premises from the former occupant, the date on which contracts for the purchase are exchanged
• if the former occupant is a person whose residence contract is in the form of a registered long-term lease which includes a provision entitling the person to at least 50% of any capital gain, the date that is 42 days after the date on which the former occupant permanently vacated the premises, including by returning to the operator all keys to the premises
• if the contract between the former occupant and the operator provides for a cessation of the liability, the date provided in the contract, or
• if the former occupant is a person whose residence contract is in the form of a registered long-term lease which includes a provision entitling the person to at least 50% of any capital gain:
  • if the Tribunal terminated the residence contract, the date on which the former occupant permanently vacated the premises, or
  • if the former occupant permanently vacated the premises after receiving notice of the operator’s intention to apply to the Tribunal for an order terminating the residence contract, the date on which the former occupant permanently vacated the premises.

When do recurrent charges apply in respect of general services for non-registered interest holders?

Where a former occupant of a residential premises in a retirement village is not a registered interest holder, permanently vacates the premise and their contract does not provide for earlier cessation of liability for recurrent charges for general services their liability to pay recurrent charges that arise after they permanently vacate the residential premises ceases on whichever date occurs first as outlined below, or such earlier date as the operator and the former occupant may agree:

• the date on which the operator of the retirement village enters into:
  • a village contract with an incoming resident, or
  • a residential tenancy agreement with an incoming tenant, in relation to the premises, or
• the date on which a person takes up residence in the premises with the consent of the operator, or
• if the former occupant permanently vacated the premises after receiving notice of the operator’s intention to apply to the Tribunal for an order terminating the residence contract, the date on which the former occupant permanently vacated the premises, or
• the date that is 42 days after the date on which the former occupant otherwise permanently vacated the premises, or
• if the Tribunal terminated the residence contract, the date on which the former occupant permanently vacated the premises.

What is the timing of payment of recurrent charges?

A former occupant may, at their option, either:

• discharge (either wholly or in part) as the liability arises his or her liability for recurrent charges that arise after the former occupant permanently vacated the residential premises; or
• discharge that liability (either wholly or in part):
  • in the case of a former occupant who is a registered interest holder (other than a person who has a residence contract which is in the form of a registered long-term lease that includes a provision that entitles the person to at least 50% of any capital gains) in respect of the residential premises concerned, from the proceeds of the sale of the premises, or
  • in any other case, from the money payable to the former occupant by the operator of the retirement village under any village contract.

Can operators charge interest on recurrent charges?

The operator of a retirement village may charge interest on any outstanding amount of recurrent charges payable by the former occupant. The Retirement Villages Act 1999 prescribes the maximum rate of interest is the rate of interest prescribed under section 101 of the Civil Procedure Act 2005.

Interest may not be charged where a contract between the operator and the former occupant specifies interest is not payable on the recurrent charges.

However, if the operator and the former occupant agree to a lower rate of interest, or if a contract between the operator and the former occupant specifies a lower rate of interest in relation to any outstanding liability for recurrent charges, the interest is payable by the former occupant at that lower rate.