Retirement Villages
A retirement village is a residential complex, occupied predominantly by retired persons aged 55 years and over.
What is a Retirement Village
Villages may consist of freestanding cottages, villas, and low or high rise blocks of units. The majority of villages offer car parking; it may be an attached garage or designated parking within a short distance of the villa or unit.
The NSW Retirement Villages Act
Retirement villages are regulated in New South Wales by the Retirement Villages Act 1999 (as amended) and Regulation 2000.
Self-care or serviced apartments
Self-care villas or units are designed to be occupied by residents who require no assistance with daily living activities. Generally, the villas or units are self-contained, with their own laundry facilities. Recently constructed villages have wheelchair access, with internal halls and doorways that are designed to accommodate residents using disability aids.
Serviced apartments are designed to meet the needs of residents requiring assistance with their daily living activities. Dependent on the needs of individual residents, assistance can be provided in preparing meals, laundry and cleaning. Meals are served in a communal dining room, but some villages will provide meals to the resident's apartment. Residents usually have access to personal and or nursing care, generally on a fee-for-service basis.
Entry requirements
Prior to moving into a village, the prospective residents will be provided with a Disclosure Statement by the operator. The Disclosure Statement contains information relating to the ownership, conduct and financial affairs of the village. It is essential that prospective resident/s fully understand the information provided.
Prior to entry, the operator will require the incoming resident/s to sign a contract and a personal services agreement.
If the village is strata or company titled, the prospective resident/s will enter a contract for the purchase of the property or shares, and on settlement, in the case of strata units, their title will be registered, a providing legal title. As a condition of purchase, the incoming resident/s will be required to execute a service agreement.
Apart from strata and company title, the majority of villages offer either a lease of the premises, or a loan/license agreement, which provides a right of occupancy, in consideration of making a 'loan' of the entry contribution.
The money paid under a lease or loan/license agreement, is referred to as the 'entry contribution'. In the majority of contracts, there will be a term that a certain percentage per annum will be deducted from the entry contribution when the resident/s move from the village, or on payment of funds to the executor of their estate. This is referred to as a 'departure fee'. The percentage can vary from village to village, but generally, it is 2.5 percent per annum for a period of 10 years.
The daily operation of a retirement village is resident funded; there is no subsidy. Fees are paid on either a fortnightly or monthly basis; they are referred to as 'recurrent charges'. Residents are called upon to approve an annual statement of proposed expenditure. The amount of monthly recurrent charges levied, is based on the terms of the contract; it can be a fixed percentage, either of the aged pension or CPI; based on floor area or number of bedrooms of each villa/unit, or apportionment of the proposed expenditure.
There are legislative provisions relating to the process that must be followed when an operator seeks the residents' approval of a statement of proposed expenditure (budget).
Attached to the resident's contract will be a copy of the Village Rules. The Rules regulate such things as noise, pets, visitors, car-parking, garbage disposal and other matters essential to the good management of the village communal lifestyle.
The Aged-care Rights Service Inc. recommends that prospective residents seek independent legal advice in relation to the village contract. This service assists residents of villages with the ongoing application of their contract and any difficulties they may have associated with the village.
Call us on 9281 3600, or 1800 424 079 for country callers, to discuss any issues you may have.
