Moving into a retirement village is not an investment choice, it is a lifestyle choice and can be a very exciting time. Living in a private and secure environment with people of a similar age are just some of the reasons why the move may be a positive change for you. However like any other major life decision, there are a great many things to consider before signing an agreement. From a lawyers perspective, Carrie outlines some of the things you should think about when considering moving into a retirement village.
What is a retirement village?
A retirement village is a residential complex where the people that live there have entered into a contract with the operator of the village, either to live in the premises and/or to receive other services that may be available. It is important to remember that support services and facilities available in villages can differ depending on the provider and you should visit multiple providers to find what best works for you.
Within the retirement village framework there is a variety of accommodation types available including:
Self-contained premises for people who are able to live independently;
Serviced living arrangements (also known as assisted living apartments) which also provide cleaning meals and other needed services; and
A mixture of both which allows those who live there to take on services as the need arises.
What laws apply to retirement villages?
In New South Wales the main legislation that applies to retirement villages is the Retirement Villages Act 1999 and the Retirement Villages Regulation 2017. It is important to note that this does not include or cover nursing homes. This legislation sets out what is required of the operators and the rights of the residents, what information should be provided to people interested in living within their facilities, explain how and when the contract can be ended and set out the process of entering into a village contract.
Types of village contracts
In New South Wales there is a variety of contract types used by retirement village operators to engage new residents and manage their facilities. Some of the contractual arrangements used are:
Loan and Licence Arrangements – this option is generally used by not for profit organisations such as a church that owns a village. In these circumstances you pay a contribution going in to the facility in the form of an interest free loan in return for the right to occupy the premises. You may also pay recurrent fees. You do not own the unit or have a registered interest in these arrangements;
Leasehold Arrangements – this is where the operator owns the residential property and you as the resident lease the property. The lease is registered on the title deed which provides you with some extra protection if the retirement village is sold. The amount you pay depends on the village you choose and the market. When you leave you may be required to pay a departure fee;
Strata and Community Schemes – this type of arrangement has many similarities to standard strata schemes where you will be a member of the owners corporation or community association and be required to pay levies to cover the cost of managing the property. However, unlike these schemes, you will be required to enter into a service contract with the operator before you can move in; and
Company Title Schemes – Some, although very few privately run villages may also use this scheme. The village is owned by a company and instead you purchase shares at market value which in turn give you the right to occupy the premises. A Board of Directors which are appointed by the shareholders run the village.
Things you should consider
There is a variety of things you should consider before entering into an agreement with a retirement village. Some of these include:
Seek expert advice from a lawyer before making a commitment. A solicitor can go through the contract, explain your rights and requirements of you if you choose to enter into an agreement with a retirement village;
Think about the type of village you want to live in and what you can afford on a continuing basis;
Visit the village and get a feel for the culture of the community to make sure it is a place you are happy to live; and
Read and understand the policies of the village on guests and pets look into the health and lifestyle programs available at the facility.
You are more likely to make a decision that suits your needs and lifestyle choices if you are well informed and seek advice from the very outset of your journey into a retirement village.
If you need further information or assistance in navigating your rights and responsibilities or understanding the contract please contact:
02 4036 3307