It is very important that you fully understand all documents you receive on entering a Retirement Village and what the legal and financial implications are for entering, remaining in and leaving the village, as well as the implications for any spouse or partner you may have.
- The Residence Contract sets out your rights and obligations and ultimately governs the relationship between you and the village.
- In addition, the Retirement Villages legislation contains provisions to protect residents.
- Double check that any verbal promises discussed have been included in your contract.
- There is a 15-business day cooling-off period.
- It is during this period that you can also withdraw from the contract and receive a refund of any money paid by you under the contract.
Ownership of unit
- In a retirement village you do not own the residence in which you live, but rather have a lease or licence.
- You will not be able to transfer your interest in the residence or borrow money against the property.
Premises condition report
This gives you information about the condition of the fixtures, fittings, who will be responsible for repairing or replacing any item, when any item is due to be repaired or replaced and how the cost of repairing any item is to be funded.
- You are entitled to a settling-in period, which is 90 calendar days (or any greater period referred to in the contract) after you take occupation of your residence.
- It is during this time that you may decide that the retirement village is not suitable for you and you may elect to leave the village. If so, you may be required to pay costs as detailed in your contractual documents.
Recurrent charges are payable at regular intervals. These might cover expenses such as administration (eg stationery); wages and related costs (eg village manager, or gardener); property management (eg council rates, insurance); food.
You may also be required to contribute to a Capital Replacement Fund or a Sinking Fund. These funds are used to replace capital items or to meet non-budgeted, unplanned expenses or items requiring long term maintenance.
Terminating the contract
You can terminate your residence contract at any time by providing written notice to the village. The circumstances where a village can terminate your occupation include:
- breach of the residence contract &/or rules,
- your residence becoming unsuitable due to physical or mental incapacity, or
- your death
However, if the village wishes to terminate a resident’s occupation, this must be approved by SACAT (South Australian Civil & Administrative Tribunal).
Refund of premium
Once your residence has been re-licensed, you will be advised as to the amount you will be refunded. There may be deductions from this refund which may include:
- any outstanding charges;
- costs associated with refurbishment, painting, remarketing, management, depreciation;
- an amount indicating a percentage of the premium retained by the administering authority (their profit); &/or
- an amount retained for capital replacement (often calculated on your length of stay in the village eg x% for each year of the period of occupancy).
It is important to be aware that it is unlikely that the amount of your refund when exiting the village will be equal to or greater than the amount you paid to enter the village you should get advice before entering the village to ensure you are aware of all financial implications.
Under the terms of the Retirement Villages Act you must be repaid the amount due to you on the earlier of 10 days after the unit is relicensed or 18 months since the date of your vacation. If you need to go into residential care before you receive your refund then the legislation now provides that if you request the village operator to pay your care fees during the time that the unit is being marketed for relicence then the operator must do so and deduct it from the amount finally due to be refunded to you.
Once you have decided to terminate your contract and have provided written notice to the village, the village can take preliminary steps to remarket your residence in accordance with their remarketing policy.
To download information about Retirement Village Contracts click here.
We have offices in the city, at Tea Tree Gully and Morphett Vale for the convenience of clients. In addition, for the elderly or infirm, visits can be made to clients at home or in hospital.
Call us on 08 8415 5000 or send an email to make an appointment.