Research any retirement village fees
If you or anyone in your family is considering a move to a retirement village, be aware that it is not a care option nor is it likely to provide an easy transition to a co-located aged-care facility.
Retirement villages are for independent living, so they should not be thought of as a low-care option.
Some elderly residents have moved into a retirement village only to then find a short time later that they had to terminate their residence contract to move into residential aged care. When they left the retirement village they had to pay a range of exit fees which reduced the amount of money they had to pay for their aged care.
It is important you find out upfront how much you will be required to pay if you leave.
The Retirement Villages legislation requires potential residents to be provided with a disclosure document which clearly sets out all of the fees payable to enter, live in and leave a particular retirement village.
The types of initial and ongoing fees may include:
An entry payment called a “premium”. The premium is often described as an interest-free loan and is usually equal to, or above, the market value, of an equivalent unit if you were to purchase as a residential owner. Many people do not understand that in most instances they are purchasing a right to live in premises — and not the property itself.
Special levies charged to residents to cover periodic expenses.
Recurrent weekly or fortnightly fees charged by village operators.
Maintenance fees for repairing or replacing things like ovens.
Some of the exit fees may include:
Deferred management fee which averages 30 per cent of the entry payment. Refurbishment charges. Sales and marketing fees of something like 3-5 per cent, to on-sell the lease.
Some retirement village contracts grant sole marketing rights to the owner/operator giving residents little control over the resale or releasing process.
Before we even get to this point, we need to understand how any capital growth of the unit is shared with the village owner and what time frames are likely to affect the proceeds of the sale.
Before you sign any contract, obtain legal and financial advice or talk to the trained Seniors Housing Advisory Centre officers at Consumer Protection on 1300 367 057 or email firstname.lastname@example.org or commerce.wa.gov. au/consumer-protection/ seniors-housing.
There is a seven-working-day cooling-off period that starts once you have signed a residence contract.
If you cancel the contract at any time after you move in you will have to pay all fees specified in the residence contract.