Brentwood retirement village receiver loses fight with residents on redemptions.

The New South Wales residents association, the RVRA, won an important judgement last week in the NSW Supreme Court that will affect a number of older contracts where residents purchased redeemable preference shares for the right to occupy their ILU.

In the 1990s residents bought into Brentwood Retirement Village on NSW’s Central Coast by being allotted redeemable preference shares in return for the right to occupy. In 2007 Australian Property Custodian Holdings Limited [Prime Trust] bought Brentwood but subsequently went into liquidation.

Departing residents can no longer obtain their exit entitlement because the redeemable preference shares were caught up in the liquidation. The operator argued the Federal Corporations Act took precedent on the state based Retirement Villages Act and so the CCTT tribunal had no role in this dispute.

The RVRA has funded two families, firstly in the CCTT tribunal and then in the Supreme Court.

The judgment however agreed with the RVRA and stated: "The Retirement Villages Act provides that the right under a village contracts are enforceable against the subsequent operator of the retirement village... Any obligation to repay the ingoing contribution which is properly enforceable against the subsequent operator can be enforced against it without dealing with the redeemable preference share”.

The question remains who is going to pay the redemptions given that few sales are being achieved in the village now that it is in liquidation.