Buying into a retirement village – Do you need an interpreter?
16 February, 2012 | Carolyn Ranson
Retirement villages can offer peace of mind and a great lifestyle but the legalities of the process and understanding the future implications can be daunting. Expert friendly advice, that is easy to understand, takes away the stress.
Each retirement village operator has unique documentation so what may apply in one village may be very different in another. However, retirement villages are required by law to provide you with a disclosure document that clearly sets out your rights and obligations. It is important to study this carefully before making any commitments.
Some of the questions to consider are:
- What is the type of ownership? For example Unit Title, Occupation Right / Occupation Licence or Lease, and what does this mean? Especially the legal risks to this type of ownership. How are you protected? Can your family trust buy your new home?
- What can you and your family expect to receive on the resale of your village unit/apartment and how much control do you have over the process? Will you or your family receive any capital gain? Are there any deductions taken by the village from the original purchase price? What happens if the unit sells for less than the original purchase price?
- What are the ongoing monthly outgoings/fees and what is covered by the charge? How long do you or your family have to continue to pay these outgoings once you move out?
- What happens during the resale process? When will you receive payment? Will you be reimbursed for any improvements you make? On average, How long does a resale normally take?
- What sort of facilities and services are available and is there a separate charge for these?
- What future development is planned and how might this affect you?
- What are the grounds for termination, by the village, of your lease or right to occupy?
- Are you future proofed – can you transfer to a serviced apartment or rest home on site if you need to? If so, what is the procedure?
- Is the village financially stable? Is there adequate provision for future maintenance requirements?
- What will your lifestyle be like? Will there be adequate security? Can you have a pet? Can you have friends/family to stay?
It is a legal requirement that intending residents must obtain legal advice before committing to the contract. The items listed above are only some of the things that you should consider when buying into a retirement village. Lawyers specialising in retirement village law are well versed in all the different types of documentation and ownership models. We know the fish hooks to look for.
Don’t let the foreign language put you off. We can interpret the issues into an easy to understand format and discuss with you all the implications. Make sure you have all your questions answered before taking the plunge.