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.

Pros and Cons of legal title options in retirement villages.

In many ways, buying a retirement village unit is even more complicated than buying any other type of residential property.  There are different forms of legal title and occupancy rights available, there is the ongoing cost of services and maintenance of facilities in the village, and then what fees, charges or capital gain sharing may apply when the unit is sold again later on. Different transaction costs may or may not apply to a purchase, such as stamp duty, lease registration fees and a village operator’s legal costs.

While these legal and financial complexities should not detract from the benefits of village living, it is very important to obtain legal advice before you buy a retirement village unit. You need to be fully informed of all the costs and issues which may arise and ensure there are no surprises or unanticipated problems later on.

Seniors Housing Online has been fortunate to talk to Richard McCullagh BA LLB, a very experienced NSW solicitor who has specialized in retirement village law for the past 25 years, previously working for village operators and who now works for village residents (or prospective residents).  He has seen huge consolidation in the industry in the last 5 years as well as keeping up with ever-changing government regulation.

We asked Richard to answer some common questions about buying a retirement village unit, including the pros and cons of the different types of legal title and occupancy arrangements.

Read the article on the Seniors Housing Online News page.