Moving into a Retirement Village NSW: What you need to know
When Australians think property we think investment. That’s why it can come as a bit of a surprise that purchasing a villa or unit in a retirement village is not a bricks-and-mortar investment. Instead, you’re actually going into a contract with the village operator and exactly how much you’ll see on your return is down to the details.
Despite heavy regulations retirement villages remain a contentious issue for consumer groups and residents. With confusion over contracts and complaints about ongoing fees it’s important you engage the services of an experienced solicitor to help you through your transaction.
We’ve handled retirement village contracts and disputes for our inner-west community since first opening our doors in 1996. Our staff has experience assisting you in every aspect of your purchase.
Just some of the retirement village cost issues you might face include:
The fact you’re not necessarily moving into a strata property. Over 90% of retirement village contracts are actually long-term leases where the operator retains ownership of the unit and the resident buys the right to occupy the home.
Many residents will assume they or the family have full rights to capital gains made on the property at sale. After all you did pay an entry fee comparable to the median house price! But, most contracts will actually split capital gains between the operator and the resident and in some instance you might not be entitled to capital gains at all.
Living in a retirement village does not entitle you to aged care facilities. Many assume they would. And whilst it’s true some retirement villages have aged care facilities adjoining them, owned and run by the same operator, the two services are covered by completely different legislation. Aged care facilities fall under federal law and retirement villages under state law.
There are many fees and charges and it can be confusing figuring out where your money is being spent. Retirement villages are a “lifestyle choice.” This means your village might have pools, tennis courts or golf courses. This could be great for some, and can be an appealing factor for many considering village living, but it’s important you understand you will be paying for the maintenance and operation of all these facilities through your ongoing fee structure. There are also entry fees (your initial purchase cost) and departure fees.
Your operator may also be operating as your agent when it comes time for you to leave. This means that your home could sit on the market uninhabited while you or your family is forced to pay ongoing maintenance charges.
Many consumers express anxiety over the possibility of having to pay refurbishment costs when they leave. Importantly, residents should know that being pressured to pay refurbishment costs upon departure by your retirement village operator is absolutely prohibited under section 164 of the Act. Consumer groups still receive complaints of residents being pushed to pay for renovations ranging from the repainting of the unit to the installation of a new kitchen.
If you’re thinking about moving into a retirement village our staff can help make the process as stress-free as possible by helping you get the most out of your contract and securing your residence rights. We will:
Investigate and research your selected facilities to ensure your operator has a good reputation.
Ensure your selected facilities provide you with all documentation to help you in your decision.
Overlook your contract and walk you through it so that you and your family understand the purchasing, ongoing and departure fee structure.
Make sure you understand where and how your fees will be spent during your time at the retirement village.
Provide legal advice about securing your refund upon departure and;
Provide legal counsel during disputes with your operator.