If you’re an older Australian, downsizing from the established family home to an independent living arrangement or retirement village apartment might be on the horizon.
It’s an exciting step, but it can also be daunting. It is important to have a good grasp of the often-complicated contractual and financial aspects of such a move.
Changes to the Retirement Villages Act 1986 (Vic), effective 1 July 2014, may give you more information to make this important decision about your future. All Victorian retirement villages will be required to provide greater detail about important features of their property, such as costs, size, services and facilities. These must be given to you in standardised forms, making it easier to compare the pros and cons of each retirement village.
Before you enter into a residence contract
The retirement village will be required to provide you or your representative with a free fact sheet, in a prescribed and approved form, within seven days of you asking for it. In addition, if a village sends you targeted promotional material, requested or unsolicited, it needs to include this pro-forma fact sheet. If a residence contract is on the cards, the retirement village needs to provide you with the fact sheet 21 days before you enter into the residence contract. If you’ve already been provided with this statutory information, the retirement village has fulfilled its obligation and does not have to provide any further fact sheets unless material details have changed about the service and the fact sheet needs to be updated. In addition to information about the property and service, the fact sheet will reinforce the importance of obtaining independent legal and financial advice about the residence contract, make sure you appreciate the financial commitment involved in living at a the retirement village and ask you to consider carefully whether retirement village living is appropriate for you.
What will they need to tell you?
Each fact sheet will need to include prescribed information including owner details, construction year, the manager’s contact details, number and size of units, future planning permissions, details of facilities and services and their costs, budgetary matters and estimated sale price ranges for units on the property as at a stated date. The fact sheet also needs to outline rules about pet ownership, car parking, security, insurance and waiting lists. Should you ask for them, a retirement village owner or operator is also required to make documents like site plans, financial statements, examples of previous contracts, planning permissions and dispute resolution paperwork available for your inspection within seven days of your request.
21-day disclosure statement
Retirement villages have long been required to provide a prospective resident with a disclosure statement 21 days prior to entry into the residence contracts. From 1 July 2014, the content of the disclosure statement will be significantly expanded to assist prospective residents better understand the financial costs of entry, exit and of day-today living in a retirement village. Each disclosure statement will now need to be specific to a particular unit and detail amounts payable on entry, ongoing costs, and liabilities and entitlements on departure.
A retirement village owner can’t compel you to…
Residence contracts will be required to be in a standardised form. A residence or management contract cannot contain clauses requiring you obtain an insurance policy or a Will, or to tell the manager where your Will is located. Nor can it require you to pay any costs for correspondence or the preparation of any information for you. The owner or manager cannot relocate you to other premises without your consent, except in an emergency-for example where your premises are destroyed or severely damaged, or where your safety, health or property is endangered. Neither can they restrict the operation or membership of a residents’committee.
Good news – but lots to process
There’s a lot of information to process, and while the amendments to the retirement village legislation are good news for prospective residents – because they keep retirement village owners honest-there’s a high volume of documents to review.
Now – perhaps more than before – it will be important for prospective residents to obtain independent legal advice on resident contracts before making a long-term commitment . We are always happy to review any documents you might receive from a prospective retirement village before you enter into what should be a trouble-free, enjoyable phase of life.