FAQ - Retirement Living

Display Num

Q1. What happens when I decide to leave the retirement village?

Answer: There are many reasons why you might want to move from your accommodation unit. They include changing health, family and financial circumstances.

You must provide the operator of the village with a written notice of your intention to vacate your accommodation unit. Most villages have a pro-forma document that you complete and return. If not, you can write a simple letter advising of your decision.

You and the operator of the village must agree on the resale price of you accommodation unit. If there is no mutual agreement, the operator must obtain an independent valuation from a suitably qualified valuer. You must also agree on any reinstatement work that may be required to return your accommodation unit to the condition it was in when you moved in. This may include work such as painting, for example. Reinstatement work also works to ensure that the resale process is undertaken as expeditiously as possible and that the best possible resale price is obtained. Naturally, the age of your accommodation unit and the village itself must be taken into consideration when working out what work is required.

Depending on the nature of the contract that you entered into when you first moved to the village, the operator of the village has the first right to re-sell your accommodation unit. The scheme operator must on sell the accommodation unit to a suitable person and one who meets the criteria of a resident – e.g. must be 55 years of age or older and able to live independently. This ensures that the integrity of the village is upheld. The operator has six months to resell your accommodation unit at the mutually agreed price. You have the opportunity to introduce people who you think may be suitable for residency to the operator of the village during this period. If the operator has not sold your accommodation unit within that time period, you may appoint an independent real estate agent to sell your accommodation unit for you. Obviously, the person found by the real estate agent must also meet the criteria of resident.

The operator of the village must provide you with an Estimate of Exit Entitlement, noting proceeds to be expected upon the sale of your accommodation unit and detailing any deductions, such as the Exit Fee.

The Exit Fee (sometimes also referred to the ‘Deferred Management Fee’ or ‘DMF’) is the return to the operator for his initial investment in the village infrastructure. The Exit Fee can be calculated on either the ingoing contribution you paid when you entered the village or the ingoing contribution paid by the new resident, dependant on the contract you entered into. It is usually capped at a percentage of either contribution and can accrue over a period of years, depending on the length of your residency. The calculation of the Exit Fee must be disclosed in the Public Information Document and your Residence Contract.

Once your accommodation unit is resold, you must receive your Exit Entitlement – i.e. your share of the sale proceeds - within 28 days of resale.

You can visit the village of your choice as many times as you like and don’t be afraid to ask as many questions as you feel is necessary to get all of the information that you require – talk with the Village Manager, the salesperson, other staff and most importantly, speak with other residents.

Many villages offer you the opportunity to visit the village on a weekend where a special event is being held or during the week to enjoy dinner with other residents. Take this opportunity and take in the atmosphere and surrounds of the village.

Q2. How do I go about entering a retirement village?

Answer: When choosing a retirement village several factors should be considered. The area you choose may be where you have lived for many years, close to family and friends, public transport, shopping centres or near your favourite restaurants and recreational activities. It is important to keep these in mind when selecting a retirement village.

Book an appointment with the village representative – e.g. salesperson or Village Manager – to view the village and accommodation units available. It is a good idea to have a checklist with you about certain accommodation, facilities or services that are important to you – e.g. two bedroom, pool and tennis court, meals etc.

Once you have made the decision to enter the retirement village, you may be asked to pay a holding deposit (usually $1,000), which will secure your interest in the accommodation unit of your choice. This deposit must be held in a trust account with the operator’s solicitor, the public trustee or a real estate agent and you must be issued with a trust account receipt. The deposit will form part of the total purchase price. The deposit is fully refundable if you change your mind about entering the retirement village.

You must also be provided with a Public Information Document (commonly referred to as the ‘PID’) from the operator. This is a statutory document that contains information about the type of accommodation, financial arrangements, facilities and services and resident’s rights and responsibilities. The Public Information Document forms an integral part of the Residence Contract, which is a contractual agreement between you and operator of the village detailing your rights and responsibilities and the rights and responsibilities of the operator.

You will be required to sign an Application Form and the Public Information Document. The Public Information Document is also signed by the scheme operator on the day that they accept your application to reside. Once your application has been accepted, you are entitled to a 14 day cooling off period, which allows you the opportunity to consult with your solicitor or financial advisor and make certain that you have made the right decision. It is strongly recommended that you do consult with such experts. Remember, you can change your mind about moving to the retirement village during this period.

Once you made the final decision to move, your solicitor will liaise with the operator’s legal representatives and start the process for settlement – much like when you purchased your existing property.

Q3. Will I receive nursing care if required?

Answer: This is one of the most frequently asked questions by residents and their families. As a retirement village is not a hostel or nursing home, it is critical that you obtain information from the operator of the village pertaining to ongoing care that may be available to you, if required. Keep in mind, too, that, because a retirement village may be located next to a low or high care facility, this does not automatically guarantee that you can be transferred, if required.

Many villages have established excellent relationships with community based healthcare professionals and service providers. The Village Manager should be able to provide you with contact details of local community based healthcare professionals and service providers.

Q4. How much will daily living in a retirement village cost?

Answer: Most retirement villages are resident funded villages. This means that residents contribute to the costs associated with the day-to-day and ongoing management and maintenance of the village. This is an effective way of ensuring that facilities and services, that would normally be out of reach of most people, are available.

The general services charge is a fee that covers the running costs of the village e.g. day-to-day village management and administration, general village maintenance, insurance, security costs and gardening. The general services charge also includes a contribution to a mandatory fund called the Maintenance Reserve Fund, which is a fund that is used for major maintenance and repair of the retirement village’s capital items – e.g. repairs to the village lawn mower. Residents are solely responsible for payments into this fund and the amount required to be paid by residents is determined by an independent quantity surveyor.

Personal services charges are optional services supplied or made available to residents and, usually, are those services, such as laundry, meals and cleaning, which are provided to residents residing in a serviced apartment. Most villages will also provide these services to residents residing in an independent living unit, on a user pays basis.

The cost of services is reviewed with the introduction of each financial year. Residents must be allowed to consult with the operator of the village with respect to the introduction of fees.

Once you leave the retirement village, you will be required to continue to pay the general services charges for a period of ninety (90) days after you leave. After this period, you and the operator share in the costs of these fees in the same manner that you share the costs of sale. If you receive personal services as part of your contract, you will be required to continue to pay these charges for twenty-eight (28) days after you vacate your accommodation unit.

Q5. Do I 'buy' or 'lease' my accommodation unit?

Answer: Just as there are many different types of retirement villages offering different services and facilities, there are many different types of tenure schemes available.

The most common form of tenure available in most retirement villages is leasehold tenure. A lease is, usually, for 99 years or more and is registered with the Titles Office, with you registered as the ‘lessee’. A lease terminates automatically on the death of the surviving resident or when the unit is on-sold to a new resident.

Another common tenure scheme is the loan/loan/licence arrangement. This is quite similar to a lease, however it is not registered with the Titles Office. Some villages are freehold/strata title tenure – you purchase the accommodation unit and are registered on the title deed.

Regardless of the tenure scheme offered at the village of your choice, you are protected by relevant state legislation. Retirement villages offering leasehold, loan/ loan/licence and freehold/strata titles are governed by the Retirement Villages Act 1999.

Q6. How much does it cost to enter a retirement village?

Answer: The cost of your accommodation unit is determinable on many different factors, including location of the village, size and type of accommodation, services and facilities available and market factors.

You are required to pay an ingoing contribution, which is the amount of money you are required to pay the operator of the village in return for a right to reside, which allows you to reside in the accommodation unit of your choice at the retirement village of your choice and enjoy the services and facilities available.

Q7. What can I expect to receive as a resident?

Answer: Security, companionship, less worry with household maintenance and more time to enjoy leisure pursuits are just some of the many reasons people decide to move to a retirement village. Retirement villages can offer you all of the above along with a number of services and use of facilities.

You should expect to receive 24-hour emergency assistance, which enables you to access assistance in the times of an emergency; day-to-day village administration and management, consisting of staff experienced with the retirement village sector; general village maintenance and gardening.

Many villages also offer residents the use of a number of community facilities such as a community centre or clubhouse, pool, landscaped gardens, games room, library, gymnasium, spa, craft/activities room, bowling greens, putting greens, games room and cinema room. You are able to use the communal facilities as often as you like. Some villages also have user pays services such as beauty salons, specialist consulting rooms (e.g. podiatry) etc.

The cost for these services is set in the village budget, which is designed to note the income received from services charges and the estimated expenses to provide the services and facilities of the village. The village budget is reviewed with the introduction of the new financial year. The operator of the village must consult with residents in determining the costs of the services.

Q8. I live in a retirement village. Can I access community care services?

Answer: Yes, providing you meet the eligibility criteria for the specific program/service you are wishing to access.

Different community care programs have different eligibility criteria, based on assessed individual needs.

Living in a retirement village is the same as living in your own home and for most programs, should not affect your ability to access community care.

Q9. What type of accommodation is available at a retirement village?

Answer: Most retirement villages offer residents the choice of independent living units or serviced apartment accommodation. Some retirement villages offer exclusive independent living unit accommodation whilst most others offer a variety of both.

An independent living unit (commonly referred to as an ‘ILU’ or ‘villa’), is an accommodation unit designed for the independent, active retiree who does not require assistance with day-to-day living. An Independent Living Unit can be a 1, 2 or 3 bedroom unit that may form part of a duplex, a high-rise complex, be semi-detached or stand alone. Car accommodation is usually provided, by an internal access garage or a carport. Some independent living units offer dual car accommodation, to cater to the needs of today’s retirees.

A serviced apartment provides supported accommodation for the retiree who requires some assistance with daily living such as cleaning and laundry and personal services such as provision of meals. Serviced apartments are usually one bedroom or studio style apartments however, some retirement villages also offer two bedroom apartments. Most serviced apartments are fitted with a kitchenette, which allows you to make tea/coffee, warm meals etc. You may need to undergo a medical assessment, as conducted by your GP, to assess that serviced apartment accommodation is suitable for you. Check with the operator of the village of your choice.

Q10. What is a retirement village?

Answer: A retirement village is a community of accommodation units and facilities designed to cater to the needs, services and lifestyle choices for people who are 55 years of age or older. A retirement village is not a hostel or nursing home or mobile home/caravan park.