Retirement villages case study

Where a village resident is the owner of their residential premises, the Retirement Villages Act 1999 provides that a village operator who holds an option to purchase any residential premises from a village resident must decide whether or not to exercise the option, and must give the resident written notification of that decision, no later than 28 days after the resident permanently vacates the premises.  If the operator does not give the notification required within the time allowed, the option lapses.

An elderly woman, a retirement village unit resident for 20 years, was hospitalised and relocated to a nursing home for her recovery.  While in the nursing home she continued to own the unit and pay levies, with her goods remaining in the unit.  The woman had let her niece know that she intended to return to her unit, and this information was passed on to the village operator.  However, sadly just over a year later the woman died at the nursing home.

Upon learning of the woman’s death, the retirement village operator sought to exercise a term within the agreement between the deceased and the village which provided them with the option of buying back the village unit.  The executor of the deceased’s estate then applied to the CTTT seeking an order that the buy-back option timeframe had elapsed and was therefore void.

At the hearing the executor claimed that in order to properly exercise the buy-back agreement, a notification stating the village operator’s intention must be sent to the village resident within 28 days of moving out.  The executor argued that the deceased had in fact moved out a year beforehand and accordingly the buy-back option had elapsed.  In response, the village owners argued that the deceased had not in fact moved out as her belongings remained in the unit and she had expressed her intention to move back.

The Tribunal Member found that the woman had moved out of the unit, regardless of what her intentions or wishes were about moving back to the premises, on the basis that the statement given to the village that the deceased might return was uncertain and sufficiently vague that it could not be relied upon.  Under these circumstances, the Tribunal Member determined the village operator had failed to make the notification within the prescribed time and that the buy-back option was therefore inoperative.