With our aging population, many Australians are now considering living in retirement villages or aged care accommodation.
Unfortunately most individuals are not aware of the hidden costs associated with entering into such an agreement with a Village Operator. Most Contracts/Agreements are not easy to understand for a person with no legal background. The large number of different retirement options in Australia can also pose a mine field for people looking at entering into this next stage of their lives.
Know all the fees & charges before you sign the contract
It is important that an incoming resident knows what they are signing and knows what fees/charges they will be up for when they leave/vacate the retirement village.
The most secure form of tenure of property is freehold title. Unfortunately most village operators don’t offer this.
Instead the most common arrangement for retirement villages is a leasehold/license arrangement where you usually provide an interest free loan to the Developer of the Village. With this type of arrangement, the incoming resident pays an upfront fee often referred to as a bond, which is roughly equivalent to the freehold value of the property. The resident is also responsible for regular fees during their occupancy and if they have special care needs paying a fee for those services.
When a resident vacates a retirement unit they are normally charged an exit fee which is calculated normally on the length of time the resident has lived in the Village. It is also likely for a resident to be responsible for refurbishment costs, selling costs, contract fees and legal fees.
Depending on how long the resident has lived in the village, the fees and charges can easily eat up what the resident has initially paid to the Village Operator.
So what should you do if you are considering entering into a retirement village? The best advice that the writer can provide is to get proper legal advice on the implications of the Contract before you sign. It is also important to shop around for the best retirement village contract available.
Turner Freeman Lawyers can help you understand your contract
Should you require any assistance in relation to retirement village contracts/agreement, please contact our Wills & Estates Solicitor, Jenna Hutchinson on 13 43 63 to speak with our Wills & Estates experts in Queensland. Our offices are in Brisbane, Logan, North Lakes, Ipswich, Toowoomba, Gold Coast, Sunshine Coast and Cairns.