A retirement village is essentially a managed community for seniors, although the term is something of a misnomer because you don’t necessarily have to be retired at all.

Entry is generally restricted to people who are over 55 years of age or have retired from full-time employment, and their spouses.

Entering a retirement village usually enables you to ‘downsize’ and move into a new home that will be more suited to your future lifestyle and financial circumstances.

There are many different models and, as with any decision of this type, you should consult your financial adviser, accountant or lawyer before making any decision, to ensure you fully understand the costs and structure of any contracts entered into. Involving your family members in the decision is also a good idea.

Each Australian State and Territory has enacted specific legislation that defines what is and what is not a retirement village and regulates many aspects of the relationship between retirement village operators and their residents and prospective residents.

Before deciding on whether retirement living is right for you, it’s very important to be clear about your current, and ongoing, financial circumstances.

You need to be aware of three different types of costs before deciding to live in a retirement village.

These include:

  • The entry fee or purchase price
  • The service or maintenance fees
  • The exit fee, also known as a departure fee or deferred management fee.

The following sections seek to explain the costs and fees payable in respect of the most common forms of retirement village unit ownership.

Beware, however. Confusion about the financial arrangements and what happens when the home is permanently vacated have historically been the cause of most of the problems and disputes associated with retirement villages.

In most States and Territories, the retirement village legislation has increased disclosure requirements and clarified the resale process, but it is still very important to do proper due diligence and understand the legal and financial arrangements before you make a commitment.

If you need assistance in reviewing or negotiating a retirement village or aged care facility contract, then you may need the services of a solicitor who specialises in this area – please use our Business Directory to find a suitable ‘Contracts Solicitor‘.

Otherwise, please use our Business Search facility if you require assistance in finding ‘Financial Planners, and ‘Property Valuers‘ in your local area, if you’re planning on downsizing your current home.