Moving into a Retirement Village
There are so many options around what type of Retirement Village you may wish to move into - they vary in size, price and options in regard to the price and how it can be paid. Here are some helpful tips for your decision around the Retirement Village for you.
Get Financial Advice
It is extremely important to work with your financial advisor to seek the appropriate advice around how moving into a Retirement Village will financially affect you and potentially affect your Estate in the future. If you do not have a financial advisor, ask family and friends or speak with your legal advisor for a referral.
Obtain Legal Advice
Retirement Village Contracts and Agreements are not all the same and require a careful, considered review. There are a number of different arrangements in which a Retirement Village can be purchased:
· Purchase as you would a regular property and be the registered proprietor of the unit following settlement
· Purchase under a lease arrangement whereby you will pay an “ingoing contribution” to allow you to reside at the Retirement Village
Once the review is complete you will likely have further questions and the documents may require further clarification and discussion.
Purchasing Under a Lease Arrangement
When you purchase under a lease arrangement you may have options regarding your ingoing contribution and what amount you pay upfront. Usually if you choose to pay the full upfront cost at settlement this would reduce any fees (known as a deferred management fees) taken out when you vacate and re-sell. In the case when you choose to pay the lesser amount upfront, a higher deferred management fee is payable upon vacating.
Purchasing Free Title
When purchasing under an arrangement whereby you become the registered proprietor on Title, there will be stamp duty implications to consider. You may also be required to enter into a Management Agreement which may require a percentage of the resale value to be withheld at the time you vacate and sell. The types of arrangements can solely depend on what type of Retirement Village you are purchasing and the Owner involved.
What type of fees will be payable when I move into a Retirement Village
· A monthly service charge is usually payable (this is sometimes called an Owner’s Corporation fee if the unit involves freehold title)
· Additional Services may be available at an additional charge and may include laundry, meals, medical services and hairdressing
Things you may wish to consider when choosing a Retirement Village
· Can I take my pet and if so, what are the restrictions around what type of pet?
· What type of Security is offered?
· Is there an emergency system throughout the village and/or units?
· What services and amenities are offered?
· How much is the monthly service charge and what does this include?
· Do I need to pay the rates and water charges on top of the monthly service charge?
· Is there a carport or garage included?
· Is the settlement date flexible, do I need to sell my home first?
· What are the By-Laws and Covenants that I must adhere to?
· Do I share in any capital gain/loss when it comes time to vacate?
· Is there an onsite residential or aged care facility?
· Is there a restriction on having visitors?
Cooling off period
The prescribed cooling off period for Retirement Villages is 21 days and usually starts from the date that you receive the disclosure statement, and all associated documents are delivered to you and your lawyer, if applicable. A holding deposit is required during this period and most likely will be a minimal amount of $1,000-$2,000.
Selling your existing home
If you are selling or need to sell your existing home, you should ensure you discuss this with the Retirement Village Manager. Most Retirement Villages offer to add a special condition within their contracts to ensure that the lease or purchase of the Retirement Village Unit is subject to the Sale of your existing home. This will ensure that you have the security of knowing that you can have the time to sell your home. The wording of the condition should be carefully checked by your legal advisor.
Packing
Moving into a Retirement village unit means you are going to need less furniture than your existing home. Make sure you start to pack early and start giving away or selling those items that you don’t need to take with you or that won’t fit. Most Retirement Villages are very flexible with allowing you to have additional inspections and you may wish to do this especially if you need to measure up for furniture.
Get Excited – This is a wonderful new chapter of your life and a time to build new memories!
Remember your financial and legal situation has more than likely changed following the move into a Retirement Village, so it is a perfect time to consider your Estate Planning to ensure your family is taken care of.