Retirement Villages: What to Consider
The decision on whether to enter a retirement village in Queensland is sometimes a difficult one.
Retirement Villages cater for retirees and older members of the community who can live independently and provides independent living units or serviced units with common facilities. If you or a family member is considering entering a retirement village, there are many factors to consider.
You do not own your accommodation
Your right to reside in the retirement village is contained either in a lease or a licence agreement. You will enter into this agreement with the operator of the retirement village and it will generally contain the day to day rules for living in the village which you must comply with. This may include:
- what you can and cannot do in the village – for example, whether you can keep pets;
- how long you can have guests stay with you before needing to obtain permission from the operator;
- what you can and cannot do to your accommodation – for example, whether you need permission to renovate or paint;
- what services you can access and the cost of those services;
- what happens when you leave, or when you may be asked to leave, the village – for example, refurbishing your unit to update it for sale.
If you are selling your family home to obtain a space in the village, the fact that you will not own your accommodation may be concerning. It is important that you read and understand the terms of the lease prior to signing any documents.
You will pay fees when you enter and while you live in the village
You will be expected to pay a fee to enter the village and obtain the right to reside there under the lease, and also fees payable for accessing and being provided with the services the village offers.
The fee that you pay will ultimately depend on the village you enter, and it will generally entail:
- an entry fee equal to the current value of the accommodation;
- legal fees of the operator to prepare documents;
- a monthly service fee for services provided – for example cleaning, gardening and maintenance;
- insurance fees on charged to you by the village;
- the fees for any additional services you elect to obtain.
Your fees will vary significantly depending on the village and it is important that you understand what you are paying for and have this discussion with the operator. All fees must be disclosed to you prior to signing any documents.
You will pay fees and have obligations when you exit the village
If you decide to leave the village, the service provider will charge you a fee on exit. The fee will depend on the village and is generally calculated as a percentage based on the time you have lived in the village, plus any costs you have to pay to refurbish your unit and any costs you agree to cover under the lease.
The village is required to provide to any new residents an example of how their exit fee is calculated. This can be a convoluted calculation, and more often that not, residents will not receive their initial entry fee back on the sale of their unit and the longer a resident lives in the village, the higher the exit fee payable.
In some cases, you may be advised that you will ‘get your money back’ when you leave the village. While you will get some funds back from your entry into the village, you will not receive a full reimbursement.
It is important that you understand how the exit fee is calculated before signing any documents and have this discussion with the operator.
You must be provided with information from the operator explaining all the above
Retirement villages are governed by the Retirement Villages Act 1999 (Qld). This legislation confirms what operators must provide to residents considering entering into the village.
You must receive:
- a Public Information Document that contains information about the village, your unit, the services and the fees payable;
- a copy of the residence contract;
- any by-laws for the village or plans.
Before signing any documents provided to you, you should obtain legal advice on the documents to ensure that you understand your rights and obligations. The above is a general overview of what to expect when entering into a village.