Making the right decision about your retirement living options can be challenging, especially when it comes to retirement villages, villas, gated communities or independent living.
Many older Australians are often misled by complex contracts and differing opinions from loved ones as to their future living arrangements. This article will look at common questions we get asked as lawyers, and important things to consider before, during and after moving into retirement living.
Remember, this article is not a replacement for legal advice. We strongly recommend contacting our friendly team, particularly before entering into any contract related to buying, selling, building or leasing. There are important timeframes and disclosure obligations that must be met, and it is important you obtain proper advice to ensure you understand what you are entering into.
Why Consider Retirement Villages?
As we age, our housing needs naturally change. It’s important to consider your current and future requirements, physical and emotional needs, and financial situation to ensure you're making a choice that will benefit you long-term.
Ultimately, your decisions now could shape your options later, so it’s important to think ahead, and discuss your options with trusted loved ones, your legal representation (us), and your healthcare providers and professionals.
For over 40 years, RHC Solicitors has been providing trusted advice to seniors in our community. With a comprehensive in-person meeting with our most senior solicitors, we discuss your unique property or leasing contract, ensure all required documentation is executed correctly, assist with financial obligations under the contract, and make sure you understand the terms of any agreement.
Our fixed-fee conveyancing team can also assist in your property transaction, and ensure your rights and obligations are being protected and met. With our caring and straightforward approach, we help clients make informed decisions about their retirement care and living arrangements.
Key Lifestyle Considerations
Before diving into the legalities, let's focus on a few lifestyle factors that might affect your decision.
Services Offered
Retirement villages offer a wide range of services and amenities. You should consider your current needs, and anticipate what you might require in the future.
Common features include:
Recreation rooms
Community buses
Social outings
Emergency medical care
Senior lifestyle activities
Your Current Home
As noted before, if you need to sell your current home, our dedicated and affordable conveyancing team can help. We’ll coordinate the sale to ensure it aligns with your move to the village, preventing any gap in housing. This is an important consideration, as many seniors have found themselves temporarily without a place to live during this transition.
Understanding The Legal Side Of Retirement Villages
The process of 'buying in' to a retirement village can be confusing. Unlike purchasing a traditional home, moving into a lifestyle village typically involves a long-term lease registered on the village’s title, not a transfer of ownership.
How It Works:
Entry Fee
This is essentially the 'purchase price' of your unit or villa.
Ongoing Fees
Think of these fees as rent, paid regularly for the use of the unit and the village’s facilities.
Loan Agreement
The money you pay is treated as a loan to the village, giving you exclusive use of the property under the village’s rules.
Each village has its own set of rules and guidelines, often designed to foster harmony within the community and ensure the upkeep of shared facilities. These can include minimum age requirements, and stipulations around residents' ability to live independently without nursing care.
What Happens When You Leave?
If you decide to leave the village, or if it becomes necessary, the property will be re-leased to a new resident. At this point, you (or your estate in the event you have died) will be repaid the loan amount, minus an exit fee, which will be outlined in the original agreement.
Exit Fee
Typically, this is a percentage of your entry fee, calculated based on the number of years you spent in the village (e.g., 3% per year, capped at 30% after 10 years).
Property Value Increases
If the value of your unit has increased, any profit may go to you or your estate.
Again, we note that the above may not apply to your specific contract or retirement village, and it is important you have sought legal advice to ensure you understand what will happen when you leave.
The Documentation You’ll Need
When entering a retirement village, you will generally be presented with numerous documents.
Amongst others, the key documents include:
Lease Agreement (also known as a Residence Contract)
Pre-Contractual Disclosure Documents
Village By-Laws
There may be additional paperwork depending on the village, and it’s crucial that any prospective resident obtains legal advice before signing anything. This is where our senior solicitors can assist, guiding you through the documents, and ensuring they are in your best interest.
Ready to Make Your Next Move?
Once you’ve reviewed and understood the documents, and are happy to proceed, we will handle the settlement process for you. Unlike buying a home, there are generally no title documents involved.
If you have any questions, or are ready to get started, consider booking a consultation with our senior solicitors to ensure your retirement journey is smooth and seamless.
If you want to learn more about retirement living, consider reading our comprehensive breakdown by clicking here.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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