Retirement Villages - 90 day "settling-in" period.

If you buy a retirement village unit and then find you really don't like it and want to move out, under retirement village laws in NSW, SA and the ACT you have a 90 day “settling-in” period which allows you to change your mind and get a refund of the purchase price.  These retirement village laws are state based, so each jurisdiction enacts separate legislation outlining the charges which may apply, including a market rent for occupying the unit during the 90 day “settling-in” period. New residents who permanently vacate their unit within the first 90 days of moving in are only required to pay a fair rent for the time the unit was occupied and a reasonable administration fee to the operator in New South Wales retirement villages. The maximum administration fee the operator can charge is $200, departure fees do not apply, and you are entitled to a refund of your purchase price plus any recurrent charges paid under the contract. Similar laws apply in South Australia and the ACT, and the issue of introducing a “settling-in” period for retirement villages has recently been under review in other states such as Western Australia. If you are in one of the other Australian states which do not currently have a "settling-in" period, or if you have occupied the unit for more than 90 days, you will need to consider the termination provisions which apply under the terms of your contract and the relevant retirement village legislation in your state. If you have bought a retirement property which is not in a designated retirement village, then different legislation may apply, and you will also need to carefully consider the terms of your contract with the operator. As always, it is essential to seek legal advice before you agree to buy a retirement property, to make sure you are fully informed of all the legal and financial consequences. More in the article plus helpful website links on the Seniors Housing Online News page.

Buying a retirement village unit - new standard contracts.

New standard contracts are being introduced for retirement villages.  Standard form contracts have been in place for many years when buying or renting other types of residential property in Australia, and now they are being introduced for retirement villages too.  The NSW Minister for Fair Trading has announced their introduction in New South Wales, and has invited comments on a draft before 18 May 2012.  Victoria is also currently reviewing the issue.

Deciding to sell the family home and move to a retirement village or other type of over 50's property or community may be the best lifestyle decision you ever make - but it is also a major financial decision, so like any other major investment, you need to get expert advice and make sure you are fully informed.  

Buying a retirement village unit is not the same as buying other residential property, as there are many different forms of legal title and rights to occupy which may apply. Arrangements vary considerably from village to village, so it is important to shop around to compare all the costs and facilities, not just the purchase price and type of legal title.  The introduction of standard form contracts will make it easier to make comparisons and understand what is involved.  But most importantly it is essential to get specialist legal and other advice to make sure you fully understand the financial implications - including if stamp duty applies, if any ongoing or deferred management fees or share of capital gains apply, and what is involved when you move out or sell your unit.

Read more on the Seniors Housing Online News and Information page.