Issues to consider
Making the decision to sell your property and move into a retirement village is not a decision that should be made lightly. This article outlines some key points to consider and things to watch out for when considering whether a retirement village is the best option for you.
Can you afford to move into a retirement village?
Retirement villages have been described as a “lifestyle” rather than an “investment” choice due to the costs that are involved. Depending on the structure of legal ownership, you are likely to be required to pay not only the initial purchase price, but also an ongoing weekly fee for outgoings (e.g. maintenance of the facility) together with a deferred management fee/accrued facilities fee.
Is it necessary for you to move to a retirement village?
Although they often have such facilities, a retirement village is not a resthome or hospital. If you are considering moving into a retirement village because of health concerns, have you checked to see whether similar health services can be offered to you by the community if you remain in your own home?
Legal ownership – how will you own your unit?
Ownership of units will most commonly be either:
Unit title – you will own the title to your unit subject to various terms and conditions and the rules of the body corporate; or
Occupation licence – you will not own the unit but you will pay a fee which will give you the right to live in your unit, use the community facilities and to receive services.
Do you need to sell your house before moving into the retirement village?
If so, it is important that you have us check the Agreement for Sale and Purchase (before signing it) to ensure that the conditional dates and settlement date will work in with the agreement you have in respect of the retirement village. Also, an Occupation Licence cannot be owned by a Family Trust (although there are ways around that issue), so if your house is owned by a Trust it is essential that you consult us immediately.
Is the retirement village registered in accordance with the provisions of Retirement Villages Act 2003?
If it isn’t you could be liable for a proportion of the costs involved in bringing the village up to standard so that it can be registered. We can check that.
Are there rules for the retirement village?
Yes there are. They vary from one village to the next. Issues covered can include the having of pets, having family and friends to stay and what happens if you go on holiday.
What happens when I die or wish to move out of the retirement village?
This will depend on the terms and conditions of the agreement that you have signed so it is important that you are fully aware of these before signing. Some agreements provide that you must continue to pay an occupational levy until the unit is sold, even when you have moved out of the unit. Also, it may take some time for the unit to sell meaning that you may be unable to buy another house for some time after moving out of the unit.
We strongly recommend that you consult us when considering the move to a retirement village so that you are fully informed and are in a position to make the best decision taking into account your individual circumstances.