Retirement Village Leases

  1. Home
  2. /
  3. Retirement Village Leases

Moving to a retirement home is not only an important lifestyle decision but also an important financial decision. Entry into a retirement village is more complex than purchasing a regular home. Retirement villages are regulated differently in each state and territory and leases comprise of a lengthy contract. Knowing your rights and obligations is crucial, to avoid unforeseen costs. At Lawrep, we can ensure that you understand the process and have a good overview of the extensive and often overwhelming amount of information provided to you. We are here to answer your questions and help you to transition smoothly from your family home to your forever home.

How it Works

Step One

Decide where you want to live, view available homes, speak to residents of the respective villages and to your family and friends. You can also obtain an information fact sheet from each village that you visit, which will outline services, facilities and fixtures provided.

Step Two

Engage LawRep for legal advice and to gain a better understanding of any lease agreement, retirement village contract and the loan agreement that you will be required to sign.

Step Three

Speak to your financial adviser to determine what you can afford and make an informed decision in respect of your budget and lifestyle.

Step Four

Pay your deposit, sign the documentation with LawRep and secure your particular property in the village.

Step Five

Enjoy your new home, you deserve it.

Frequently Asked Questions (FAQ)

1. Who can live at a retirement village?
2. What is the benefit of communal living?
3. What are the different costs involved?
4. What is the purpose of the entry payment?
5. What is the purpose of the ongoing payments?
6. Can the recurrent fees increase?
7. Do I have to pay ongoing charges after I have left the village?
8. What is the purpose of the exit payment?
9. How are retirement villages regulated?
10. Do I benefit from capital growth if I decide to sell the property?
11. Are there hidden costs I need to be aware of?
12. How secure is my ownership in the property?
13. Can I be forced to leave the village?
14. What happens if my partner passes away?
1. Who can live at a retirement village?

Usually, you must be over a certain age (usually 55 years of age) to purchase a unit in a retirement village and you must be able to live independently.

2. What is the benefit of communal living?

Sharing the cost by way of communal living allows you to better plan your costs of living. There will be more certainty over your household budget. Whether or not this works out cheaper for you, depends on your village. You should speak to a financial planner in this respect.

3. What are the different costs involved?

The costs depend on the particular contract that you will enter into. These may include entry costs, ongoing and exit payments, refurbishment fees, capital gains share, holding charge etc. It is best to go through the contract in detail with LawRep to fully understand all of the costs involved.

4. What is the purpose of the entry payment?

In order to occupy the unit, you must pay an entry payment. This payment allows you to secure a unit and takes the form of an interest-free loan for the period of the occupancy. You will then enter a lease where you will have exclusive use of the property.

5. What is the purpose of the ongoing payments?

You will be required to pay a recurrent fee to cover the costs of running the village. These may include building maintenance, council and water rates, lawn mowing, gardening, insurance etc and depend on the agreement you have entered into.

6. Can the recurrent fees increase?

There are laws in place to limit increases of recurrent fees. Usually they are increased by the CPI each year of more if the majority of village owners agree. However, special fees or levies may be raised for refurbishment of dwellings of communal areas. Your lawyer will advise you if you contractually bound by any variation of fees.

7. Do I have to pay ongoing charges after I have left the village?

The operator can continue charging recurrent fees after you vacate the property. This is why it is very important to go through the lease with LawRep so you can understand your obligations once you vacate the premises.

8. What is the purpose of the exit payment?

The Exit Payment or Deferred Management Fee is payable when you vacate your property. The idea is to lower the initial purchase price and pay this off at a later stage. The fees are a source of income for the village owners, in addition to the recurrent payments. It is usually deducted from the re-sale price.  How much you will pay may depend on certain variables such as the duration of your stay and it is calculated as a percentage of your purchase price. While exit fees can provide more flexibility and reduce entry prices, the overall costs can be significant. You should seek legal advice to be clear on the terms relating to exit-fees.

9. How are retirement villages regulated?

Your interests under the leasehold are secured by the residence agreement, the Retirement Villages Act 1992 and the Retirement Villages Regulations 2017. The operators and employees are required to abide by a set of rules of conduct and must act in the best interest of residents. Your lawyer can advise you if operators have acted within their rights.

10. Do I benefit from capital growth if I decide to sell the property?

Depending on the terms of your agreement, you may profit from capital growth upon resale. However, a share of your capital gains may be deducted as part of your departure fee if you leave the village.

11. Are there hidden costs I need to be aware of?

As a resident of a retirement village, you are required to pay recurrent fees on a monthly, fortnightly or weekly basis. You must ensure that you understand fully which services are covered by these fees and which are not. The village operator is required to hold annual meetings that you and a family member can attend. At the meeting, operators must provide a summary of the costs incurred.

12. How secure is my ownership in the property?

Your interest depends on the type of occupancy. A leasehold secures your interest in the property. Leases are required to be registered in NSW. Under a lease, you have an exclusive right to possession and the landlord cannot access the property without your permission. The landlord cannot terminate the lease without giving you notice or reasonable time to rectify any breach that would have led to the termination.

13. Can I be forced to leave the village?

The retirement village operator may be able to terminate the lease if you are in breach of your contract and if they have given you sufficient notice to fix the breach. The notice must also detail the breach. However, termination may also depend on the terms in the lease.  There are different requirements for licence agreements and strata title retirement villages.

14. What happens if my partner passes away?

You can stay in your unit as long as it is obtained in joint names. We strongly recommend adding both your names to the contract.

Have A Question?
Contact Us!

  • This field is for validation purposes and should be left unchanged.
Menu