The Retirement Villages Act 1999 (NSW) and the Retirement Villages Regulation 2017 govern retirement village contracts and regulations in NSW.

The Contract

The village operators must issue a standardised contract with easy to understand terms and conditions so that retirees interested in living in the village understand what they are signing, their rights, and the fees if they change their mind and/or move out of the village or pass away.

The Contract covers:

• Recurrent charges;
• The settling in period;
• Services and facilities;
• The type of ownership of the unit;
• Alterations and additions;
• Entry costs;
• Repairs and maintenance;
• Your share of any capital gain / loss; and
• Departure fees.

The Contract must include:

• The village rules;
• A condition report;
• A disclosure statement; and
• A list of all the village services and facilities.

Important Clauses

Important clauses in a retirement village contract include those regarding:

• The operator’s access to your unit;
• Pets;
• The notification of changes to your health to the operator;
• Notification rules if you are going to be away for an extended period;
• Visitors;
• Sub-leasing;
• Settling in period;
• Exit charges.

Different retirement villages offer different types of ownership arrangements. The type of ownership that applies to your unit determines your rights and obligations.

Registered Unit Ownership

Some of the types of ownership options provide a registered interest (depending on the retirement village you are interested in) including:

1. Owner of a lot in a community land scheme – you become the proprietor of the unit via a sale of land contract;
2. Owner of shares in a company title scheme – If the village is owned by a company, you must buy shares of the company to become one of the owners of the scheme that owns your unit. This gives you the right to occupy the unit;
3. Owner of a lot in a strata scheme – you will become the proprietor of the unit via a sale of land contract;
4. Registered long term lease – You will be a registered lessor of the unit, for a period of 50 years or more. This is known as a leasehold interest. You will be entitled to 50% or more of the capital gain.

Unregistered unit ownership

Loan and Licence

Some retirement villages (usually not-for-profit such as church or charity organised villages) offer units for loan and licence, rather than for purchase or leasehold.

In a loan and licence arrangement, you pay an ingoing contribution to the owner (usually an interest free loan) part of which is non refundable as a donation to the gift or charity. Regular recurrent charges will also be payable with this arrangement.

Rental arrangement

Some retirement villages allow you to lease a unit in the usual way via a form of residential tenancy agreement.

You can find more information about Retirement Villages on the NSW Fair Trading website. If you have the disclosure statement available from the retirement village you are considering, their Retirement Village Calculator can help you to determine all the costs and expenses involved in moving into and out of a retirement village.

Here to Help

Contact us now for free no-obligation initial telephone advice on a retirement village contract you are considering.