Exiting a retirement village
Most retirement village residents expect they will remain in the village for the remainder of their life. It is a lifestyle choice, not a property investment, and key objectives are security and support. At the same time, it is reasonable to expect that your financial situation will not be destroyed and that you will have some asset values remaining when you do leave the village
And you will leave the village! Apart from death, other unexpected and unplanned for events can overtake you:
- family relocation, grandchildren care, marriage breakdowns, health changes etc.
- unexpected financial issues.
- relationship issues with others in the village that become intolerable.
- declining health of self or partner, possibly needed residential aged care.
The procedure for vacating a residential unit in a retirement village is not the same as a normal real estate transaction. It is largely driven by the “contract” you signed with the village owner/operator when you entered the village. Some provisions to protect you exist in the Retirement Village legislation (the Act, the Regulations and the Code).
2. Caps on recurrent charges
The Retirement Villages Act amendments which came into force on 1 April 2014 contained a new provision:
Residents in non-owner villages (that is residents who have a lease or licence) now have a cap on the length of time that they must continue paying recurrent charges (monthly fees) after they have permanently vacated the village.
Residents whose contracts were dated before 1 April 2014 only continue paying their recurrent charges for 6 months after they have permanently vacated.
Residents whose contracts are dated 1 April 2014 or later only continue paying their recurrent charges for 3 months after they have permanently vacated.
Note that to receive these new benefits you must have resided in a non-owner village - these provisions do NOT apply to residents in strata title or purple title villages.
The Act prescribes the exact steps that must be taken to prove that you have permanently vacated - you must comply with all four of these steps:
(a) if required by the residence contract, the administering body has been given notice of the former resident’s intention to vacate the residential premises; and
(b) the goods and belongings of the former resident have been removed from the residential premises; and
(c) the former resident has ceased to reside in the residential premises; and
(d) the right to exclusively occupy the residential premises has been given up by the former resident (or, if the former resident is deceased, by the estate of the former resident) by returning the keys to the residential premises to the administering body.” (Retirement Villages Act section 23 (1))
For full information on the process and to obtain a worksheet on which to record your actions, download our resource paper here.
Most residence contracts will provide for some measure of refurbishment of residential premises once they have been permanently vacated. The amount of work to be done (and the cost) can vary greatly, largely influenced by the length of occupancy, the age of the residential premises and the demands of the market for attractive and appealing properties.
The Code Requirements
The requirements of the Code can be downloaded here. We have added the emphases to highlight the matters that need to be given careful attention.