03 Jan Residents Could Wait Indefinitely For Vacating Refunds
The recent introduction of Registered Interest Holders can severely disadvantage residents by delaying their refunds as well as increasing the time they have to pay recurrent charges after vacating the premises.
These changes completely shield the village operator from any risks that apply in a traditional commercial environment. Instead, these risks and associated costs have been passed on to the residents. This seems to be a common occurrence in some provisions of the Act.
Residents waiting more than 6 months to receive payment
For a Non-Registered Interest holder, after the resident delivers up vacant possession of the premises; repayment has to be made within 14 days after the village operator receives income from the sale. The worst case scenario for receiving a refund will be 6 months, even if there is no sale.
However for a Registered Interest Holder, there is no cap on how long the residents will have to wait for their refund. As a result, the wait could be indefinite.
Residents forced to pay recurrent charges after vacating
For Non-Registered Interest Holders, the former resident’s liability to pay recurrent charges ceases when a new resident moves in, or until 42 days later.
However, for Registered Interest Holders, the liability does not cease after 42 days. It continuous indefinitely with a split of the recurrent charges between the former resident and the village operator in the same proportions as the capital gain is split in the contract.
The combined effect of Registered Interest Holders and Departure Fees has a tremendous financial and psychological impact on elderly individuals.
The uncertainty and unfairness caused by the Act should be corrected as soon as possible.
How does one plan for the future? This is a completely untenable position to be in, particularly for a senior citizen, 65% of which are grand and often great grandmothers. The village operator retains the funds and receives interest, when in extreme cases a resident may become homeless.