Understanding your contract

Retirement village contracts are different from normal residential real estate contracts, so it’s important to understand your rights and responsibilities and obligations under the contract, before you sign.

from different villages so you can compare and decide which village is most suitable to your needs.

It is important you read and understand the various clauses in the contract as it will be a legally binding document for both you and the village operator once you decide to accept accommodation.

It is strongly recommended you seek legal advice and ask for a copy of the contract before signing. If there are parts of the contract you don’t understand, highlight them and seek further written clarification.

Residence contract

There are different types of contracts that residents and operators enter into depending on the arrangements in place at the village. You are more likely to make the right choices if you know what you want.

Before you sign a retirement village contract, shop around and do your research. Visit several villages that fit your requirements before deciding, talk to residents, look at the facilities and compare contracts.

Don’t rush into making a commitment, instead, visit the village often, get to know the management staff, as well as the residents’ committee, and seek expert advice and answers to all of your questions.

Disclosure documents

If you have found the retirement village you see yourself living in, ask village management for the following documents so you know what to expect and can make an informed decision before signing on the dotted line.

◆ A copy of the resident contract

◆ A copy of the village rules and dispute resolutions

◆ Financial information about all applicable costs and charges

◆ A document detailing your rights and responsibilities as a resident of the village

◆ Remarketing policy detailing how your accommodation will be resold/let if you decide to depart the village

◆ Any other policy which may impact on the premium you are asked to pay.

These documents will give you insight into your rights and obligations as a village resident. You are encouraged to request a number of disclosure documents

The residence contract is a comprehensive document that details all the important information as part of the sale between you as the buyer and the village operator.

The contract should include references to:

◆ The parties in the contract and any associated conditions

◆ Residence details such as its location, type, layout plan and size, the certificate of titles on which the village is situated, and the form of tenure (like Strata Title, a lease or licence) or purchase which applies to you

◆ Settling-in period and your right to ‘cool-off’

◆ The action required to terminate a contract

◆ Communal facilities available to residents and/or separate or additional facilities allocated to you, or any optional personal services such as cleaning, laundry or meals

◆ The amount payable, how and when it is to be paid, the basis on which any premium refund will be calculated and returned to you

◆ The recurrent charges that apply to the village and the way they are calculated

◆ Any current, planned or proposed expansions to the village and future extra facilities or future services offered

Make sure you are satisfied with the information provided to you in all the disclosure documents before signing any agreements.

It’s important you understand the village rules and policies early on in the process so you know exactly what the legal structure is and you are aware of the village regulations.

For instance, some villages have a definite no pet rule. If you have a dog or cat that will be moving with you, it is pointless pursuing opportunities with that retirement village further.

Cooling-off

Even when you have signed a contract there will be a period which allows you to withdraw from the contract if you change your mind.

This ‘cooling-off’ period will give you the opportunity to seek further advice or discuss the matter with others.

The cooling off period can be anything from 3-14 days, depending on what State or Territory you are in. Your contract will detail the exact number of days that apply to your agreement.

During this period you can withdraw from the contract and receive a refund of any money paid by you under the contract, however some administrative charges may be incurred.

If you didn’t do so prior to signing of the contract, it is recommended you use this cooling-off period to seek the advice of a lawyer to ensure you understand the financial and legal implications of the contract. A financial advisor may also be able to help you.

Settling-in

After signing the residence contract and moving in, you may find that the residential village does not meet all of your needs or expectations, or you may simply decide to leave for personal reasons.

In some States or Territories, you are entitled to a ‘settling-in period’, which, depending on the village, generally is about 90 calendar days after the date of the contract or the date on which you are first able to occupy your residence. The length of the settling-in period will be specified in your contract.

It is during this settling-in period that you may choose to leave the village without it impacting on your premium refund. However, you may be required to pay any costs and market rent for the period of occupancy as detailed in your contractual agreement.

It is important to remember that the premium will be held until your residence is re-licensed, although you should not be required to pay any penalty for terminating your contract during the settling- in period.

Make sure you find out if a settling- in period applies in your State or Territory before you sign any agreements.

Know your rights

It’s essential that you are familiar with the legislation in your State or Territory and know your rights and responsibilities when you decide to move into a retirement village.

Retirement legislation is set by individual State and Territory Governments and each has different requirements of what information and documents need to be supplied to you before you commit to a retirement village.

In Western Australia for example, you must be given a disclosure document outlining your contract, all applicable costs you will be charged for and a document detailing your rights, at least 10 days before signing a contract.

In New South Wales, retirement villages are required to use a standard contract and it is compulsory that you receive a disclosure document at least 14 days before signing a contract.

South Australia has a cooling off period of 10 days and on top of that you are entitled to a 90 day ‘settling in’ period, in which you can receive a full refund of the purchase price minus any rental costs for the time a unit was occupied and costs for services used.

You will generally not receive your exit entitlement back until the residence has been re-licensed if you leave the village during the settling-in period.

To enter a retirement village in Queensland, there is a 21 day precontractual disclosure process to give prospective residents easy access to information and financial or legal advice. You must receive a Village Comparison Document and Prospective Costs Document which ultimately assists you in comparing villages and also provides information about the costs of a village before you enter.

In Victoria the operator needs to give you a copy of the contract at least 21 days before you sign, while in Tasmania if you sign a residence contract, you can change your mind within five days of signing and be released from the contract.

The legislation for State and Territory Retirement Acts can be found online at agedcareguide.com.au/information/ renting-or-owning, together with Resident Associations for each State and Territory who can help with advocacy, legal aspects and also promote the rights of residents to all levels of Government.