If you are approaching the age of 55 years you are probably in the midst of planning your retirement. One of the big decisions to make is where you will live.
There are many options depending on what your lifestyle and finances will allow, but many people will consider moving to a retirement village.
What is a retirement village?
A retirement village is a community which contains a range of accommodation and usually provides facilities to cater for your lifestyle. Most retirement villages offer independent living units which are sometimes called “self-care units” or “apartments” and provide a range of general services for the benefit of all residents. Many also offer additional services, sometimes including personal care, on an “as required” and “pay as you go” basis. As your needs change, services you receive can be adjusted accordingly. Some retirement villages also offer serviced apartments, which are sometimes called “assisted living units” or “assisted living apartments”. These apartments are usually offered with a standard package of services such as housekeeping, meals, laundry, and linen.
What can I expect to receive as a resident in a retirement village?
Retirement Villages are maintained by the village which gives you more time to actually enjoy your retirement! Most retirement villages also provide 24-hour emergency assistance. Finally, there are usually a number of facilities provided within the village, such as pools, tennis courts, bowling greens as well as third party services such as hairdressers and doctors.
Do I buy into a retirement village?
There are many different types of retirement villages, some of the most popular being either leasehold or a loan and licence agreement. Regardless of the type of scheme, you will be required to contribute an “ingoing contribution” which is an amount of money that is required to be paid upon entering a retirement village. This amount is assessed and based on the size of unit, size of village, etc.
All retirement villages will allow you to be able to “sell” your unit, however, most require an “outgoing contribution” which is an amount of money that you are required to pay to the village upon exiting the village. Again, this amount depends upon the retirement village itself and varies from village to village.
What are the fees payable to live in a retirement village?
As retirement villages provide you with services and facilities, all villages have a maintenance fee or lease fee or recurrent charge, which is payable. The amount is usually set annually and is based on the cost of maintaining the village as a whole.
Do I own my retirement village unit?
Generally speaking you don’t “own” your unit; however, you are entitled to the sole use of your unit and you will have rights and protections under the Retirement Village legislation.
Are there any rules associated with living in a retirement village?
All villages have rules with which you need to comply. These rules cover things like whether pets are allowed within the village and whether other people are able to reside at your unit with you. You need to have read and be happy with the village rules before entering into the retirement village.
Leaving a village
When you leave a retirement village, you may be required to pay certain costs and charges including:
- Departure fee;
- Charges and costs relating to repairs and sometimes refurbishment; and
- Costs relating to the sale of your unit.
The amount you are required to pay may vary depending on whether or not you are a “registered interest holder” or a “non-registered interest holder”.
You are a “registered interest holder” in a retirement village if you are:
- An owner of a strata scheme or community land scheme retirement village;
- An owner of shares in a company title scheme giving you a resident right in a retirement village; or
- The holder of a registered long-term lease that entitles you to at least 50% of any capital gain that may be made when your unit is sold. A registered long-term lease is a lease that has a term of fifty (50) years or more or runs for the duration of your life.
You are a “non-registered interest holder” if you live in a retirement village and do not fit into one of the categories referred to above. That is, you live in the retirement village under a loan/licence agreement, a registered lease that has a term of less than fifty (50) years or a residential tenancy agreement where there is no term in your contract excluding the provisions of the retirement village laws.
We can assist you by helping you understand the terms and conditions of a retirement village contract so you and your family are fully aware of the short term and long term implications of any decisions you make regarding the future. Call Baker Love on (02) 4944 3322 or contact us here.