Retirement Village Contracts: Key Tips and Traps to Watch Out For
Making the decision to move into a retirement village is an exciting step toward a new lifestyle. You’ve met with the sales consultant, the village looks ideal, and you’re eager to settle in. But before signing on the dotted line, there are some crucial steps to take.
- Do Your Research
As with any major life decision, thorough research is essential. Consider the village’s rules and location, and think ahead:
- Village Rules: Can you have overnight visitors? What are the policies on smoking in your apartment or the common areas? Are pets allowed?
- Accessibility: Is the village close to shops and public transport? This may be particularly important if you no longer drive.
- Amenities: What facilities are offered? Indoor swimming pools, wellness facilities, or social clubs could enhance your experience.
2. Talk to Current Residents
Most retirement village operators encourage prospective residents to talk to those already living there. Ask current residents about their experience:
- What is day-to-day life like?
- Are there any downsides or unexpected challenges?
Hearing first-hand experiences will help set realistic expectations.
3. Involve Your Family
It’s important to discuss your decision with family members to ensure they’re supportive. Moving into a retirement village is a significant financial commitment, and while the lifestyle may be appealing, alternative accommodation options exist.
Consider how your health may change over time, and what steps your family would need to take should your care needs evolve. It’s essential to factor in future accommodation and healthcare requirements.
4. Seek Specialist Advice
You’ve found a village you love, the price is right, and your family is on board. What’s next?
You’ll be presented with a detailed contract and a mandatory cooling-off period of at least 10 business days. This is a legislative requirement, giving you time to seek independent financial and legal advice.
Financial Advice
There are multiple costs to consider when moving into a retirement village, including:
- Ingoing Costs: The upfront contribution and costs of moving.
- Ongoing Costs: Regular maintenance fees, which could be charged weekly, fortnightly, or monthly.
- Outgoing Costs: The fees payable when you leave the village, which might be required from your estate in the event of your passing.
A financial advisor can help assess the financial viability of the move based on your personal situation.
Legal Advice
Obtaining independent legal advice is crucial, and it’s important to consult a lawyer experienced in retirement village contracts. They can:
- Conduct necessary due diligence searches.
- Identify additional costs, such as marketing fees or contributions to capital replacement funds.
- Ensure compliance with legislative requirements.
- Advise on your rights, such as cooling-off periods and settling-in rights.
5. Understanding Retirement Village Contracts
Retirement village contracts differ from standard property contracts. Here are key features to be aware of:
- Ownership: You don’t “buy” the apartment. Instead, you make an ongoing contribution that gives you the right to live there until the contract is terminated, usually upon passing or moving into a nursing home.
- Title Registration: Your name is not on the Certificate of Title because you are not considered the property’s owner.
- Legislative Protections: Your rights are governed by specific legislation. In South Australia, this includes the Retirement Villages Act 2016 and the Retirement Villages Regulations 2017.
- Deferred Management Fees: These fees, paid to the operator when you leave, are typically calculated on a sliding scale based on your tenure.
Final Thoughts
The benefits of living in a retirement village are numerous, but the contracts are complex and varied. Seeking specialist financial and legal advice ensures that you fully understand the terms and protect your future. Always consider all aspects of the contract before making your decision.