May 1, 2021 10:00:00 AM
Retirement village contracts are different from standard property contracts. They outline the costs of residency, your rights as a village resident and the responsibilities of the village operators, among many other points.
Read this short guide to find out how to compare contracts and what to look for before you sign on the dotted line.
When is a contract needed?
As with any other property purchase, you need to sign a contract when buying a home in a retirement village. This written contract between you as a resident and the village operator needs to be completed before you move into your new home.
You do not need to sign a retirement village contract if:
- you are moving in with an existing resident who has already signed a contract
- you are renting a property you don't own (which involves signing a rental agreement)
- you are buying a unit in a strata or community scheme (these have separate contracts)
- you are purchasing an additional garage, storage unit or other non-residential unit in a village you already live in
What does a retirement village contract cover?
Your contract should include all the information you need to decide if the village is affordable and suitable for your needs. Standard retirement village contracts include the following specifics:
- your rights as a resident, including what alterations you can make to the property
- entry and exit fees and ongoing costs
- village rules
- services and facilities
- repairs and maintenance
- how capital gains are calculated
There are different types of contracts that have different inclusions, depending on the type of tenancy agreement you have. Find out more about the types of retirement village contracts.
What are my rights?
Retirement villages must provide you with a copy of the contract at least 14 days before you are expected to sign it, so you have time to consider the decision carefully and compare your options.
After signing a contract, there is a seven-day cooling-off period. If you change your mind during this period, and you haven't already moved in, you can end the contract and receive a refund of any payments by notifying the village operator in writing.
Retirement village operators are required to provide residents with a safe and secure environment with vehicle access and to arrange repairs and maintenance as needed. Residents are also entitled to attend annual management meetings and to request copies of village accounts when required.
What to look for in a retirement village contract
When you're comparing contracts for yourself or a family member, you need to consider whether the terms of the contract are really a good fit. Some questions you might want to ask yourself are:
- Do the care services and facilities meet your needs?
- Can you afford the entry fee, ongoing costs and departure fee if you need to move out?
- What happens if you plan to sell your home in the future, and will you receive capital gains?
- Do you have the freedom to modify your home?
Where to get help with retirement village contracts
If there's anything you're not sure about in your contract, you are entitled to seek independent legal and financial advice before you sign. This could help you to better understand your options so you don't make the wrong decision.
To talk to our property advisors in NSW, call East Coast Conveyancing today on 1300 327 826. You can also download our free ebook below for more advice about selling your home and moving into a retirement village.
