Tips for Retirement Village Contracts
Retirement villages are mainly occupied by retired people aged over 55. The village usually consist of a residential complex which can also include other facilities depending on the level of care provided. Moving into a retirement village doesn’t have to be a difficult decision however there are certain rights and obligations surrounding retirement village contracts that are important to understand and consider.
The Retirement Villages Act 1999 (NSW)
The relevant legislation regarding retirement villages is the Retirement Villages Act 1999 (NSW). The objects of the Act are:
- to set out rights and obligations of residents and operators of retirement villages;
- to facilitate the disclosure of information to prospective residents of retirement villages;
- to require contracts between residents and operators of retirement villages to contain full details of the rights and obligations of the parties;
- to facilitate resident input, where desired by residents, into the management of retirement villages;
- to establish appropriate mechanisms for the resolution of certain disputes between residents and operators of retirement villages; and
- to encourage the retirement village industry to adopt best practice management standards.
It is important that the resident and the village outline with transparency the roles and operations of the parties prior to the resident entering into care.
If a resident makes an enquiry with a retirement village operator, the operator has 14 days to provide a disclosure statement. This may occur prior to receiving the retirement village contract. The statement will be a useful summary of key information regarding the contract, listing all anticipated fees and charges. This information will indicate the financial obligations of a resident to determine whether the retirement village is suitable to their needs.
Retirement village contract
If a prospective resident has inspected the property and is interested in proceeding, a retirement village contract must be provided by the operator and list the rights and obligations regarding the residency. It will contain traditional information such as details of the residence, occupancy, fees, maintenance, repairs, and whether there is any applicable code of conduct.
It is important to carefully read the residence contract and understand these key points. The details should match the disclosure statement received upon enquiry.
Variable factors to consider before signing
The contract will also contain additional information, which is important to consider, and it may vary between different villages.
Residents are not automatically entitled to aged care services. It is important to explore different villages and learn about the costs involved for extra levels of care.
Upfront and ongoing payments will be required throughout the period of occupancy. Determine and list the frequency of required payments.
Residents (or prospective residents) are entitled to a cooling-off period of 7 business days after entering a village contract and may rescind a contract without reason during this time.
Termination of contract
Residents may leave a retirement village at any time and terminate a retirement village contract. There are no requirements for a resident to occupy the premises prior to terminating a contract. However, it is important to understand when ingoing contributions and departure fees are due, and that termination will only occur on the completion of the sale of the premises.
If you would like advice on a retirement village contract, please contact a member of the Cheney Suthers team.