Retirement Village Living
Retirement village living offers an accommodation and lifestyle alternative which suits many people in the later years of their lives. A retirement village is essentially a community for seniors and you don’t have to be retired to enter into a Village – often a misconception!
Entry into a Village is often for those over the age of 55 years of age, however, the average resident’s age is somewhere in the low to mid-70’s with the average entry age being in the mid to high 60’s.
There are normally two forms of retirement village – resident funded and donor funded. The latter is invariably owned and operated by “non-profit” organisations and the former can be operated by a non-profit organisation or the private sector and they are conducted on a commercial basis to produce a “surplus” or profit respectively.
There are at least eight common legal structures for Retirement villages in Australia.
- Long-term lease
- Long-term licence
- Strata title
- Community title
- Company title
- Unit trust
- Manufactured home
- Conventional Lease
The structure adopted by a particular Village will depend on where it is located.
Different structures can have different implications and raise different issues in terms of applicable legislation and I can help you “wade” through the maze of legislation applicable.
The ACT has enacted specific legislation that regulates the operation of retirement villages, which also defines what is and what is not a retirement village – they can all be different.
Management Agreements or Contract/Licence
With each Village there will be a form of Management Agreement or Contract/Licence to be entered into.
These Agreements will include who is responsible for:
- Service charges
- Refurbishment and capital replacement costs
- Security of tenure
- Operator default
- Vacating the premises
- Capital losses
- Credit risk
- Referred Management fees
Residents of a retirement village may be required to pay:
- An initial entry fee or “ongoing contribution” when they move in; and
- Rent and/or recurring service charges during their stay and perhaps beyond; and
- A fee called a “departure fee”, deferred management fee or exit fee when you leave.
The above price will depend upon the particular legal structure of the retirement village.
When entering a retirement village and the legal documentation, I work closely with your Financial Planner or Accountant to ensure that your financial security is in place and that you take the most attractive course financially.
Why do you need Judy Morris & Associates?
Legal documentation is often extensive and complicated and will almost certainly vary from Village to Village.
The documentation will have financial implications that you perhaps had not envisaged and this in itself is very complicated if the processes are not explained effectively. Each Village has a different departure fee structure and it is important that you fully understand the consequences upon leaving the Village.