Retirement Villages and Homes - Top 10 Tips
There is a lot to do and think about before you move to a retirement village. The following list should help you get started.
Think about whether retirement village living is right for you.
Community living has many benefits, but it also requires a degree of flexibility and invariably involves some trade-offs.
Don't leave it too late.
Moving to a retirement village is essentially a lifestyle decision so it doesn't necessarily make sense to put it off until your health starts to fail, your mobility starts to deteriorate, or your spouse moves into a hostel or nursing home or dies. Depending on the village, remember that there could be a waiting list to get in.
Walk the walk and talk the talk.
Go over the unit, the village and the surrounding area in detail to satisfy yourself that they are appropriate for your requirements. Talk to village management and current residents, particularly members of any Residents' Committee, and carefully observe daily life in the village. The Retirement Village Handbook has extensive checklists you can work through.
Satisfy yourself that the village will be able to efficiently meet your needs in the future if you require additional assistance as you age.
Understand the implications and issues raised by the different legal structures.
There are at least 8 different legal structures that have different implications and raise different issues in terms of applicable legislation, stamp duty, GST, service charges and levies, responsibility for refurbishment and capital replacement costs, security of tenure, operator default, termination, vacating the premises, capital losses and credit risk. The Retirement Village Handbook can be particularly useful in this regard.
Understand the departure fee.
Find out if there is a departure fee and work out how much it could be in a range of scenarios. You can use our Departure Fee Calculator to do this. Satisfy yourself that the structure is appropriate for your intended or likely period of occupation. Remember that in most cases capital gain foregone or handed back is effectively part of the departure fee. You can find more information about departure fees on our Financial Considerations page.
Remember it's a job lot.
Don't make decisions based solely on the initial entry price or the service charges or the departure fee structure. Retirement villages offer a range of benefits and involve a number of costs and risks, all of which should be taken into consideration.
It's a good idea to look at several retirement villages before you make a final decision. You will then have at least some basis for comparison, which is usually the best way to identify value for money. Be aware that the variety of different legal structures and departure fee structures can make it very difficult to sensibly compare different villages. The Retirement Village Handbook can be particularly useful in this regard because it develops a methodology for comparing different villages on an "apples and apples" basis. You can Search our Retirement Village Directory to find information about hundreds of retirement villages.
Read the documentation and find a lawyer with retirement village experience.
You should receive a pile of disclosure material and legal documentation. Read it, and don't rely on anything that's not in writing. Give a copy to your lawyer. Retirement villages are a complicated and specialized area of law so it makes good sense to use a lawyer who has suitable experience and doesn't have to muddle through or reinvent the wheel. You can search the Legal Services category in our Products & Services Directory to find law firms that may be able to assist you.
Don't forget the big picture.
Always remember that as well as a home, you need money to live on. Put a financial plan in place that will ensure that you can have your cake and eat it too. If you don't have a will or it no longer reflects your wishes, make one or have it updated.
Top Tip # 11
Get a copy of The Retirement Village Handbook.
It's a small investment that will help you work through the complexities of retirement villages and make informed decisions. Topics covered include the many different legal structures, departure fees (also known as deferred management fees and exit fees), service charges and levies, stamp duty, GST, refurbishment and capital replacement costs, security of tenure, operator default, termination, vacating the premises, capital losses, credit risk, parking, documentation and more. It also includes detailed checklists and useful summaries of the Retirement Villages Act 1999 (NSW), the Retirement Villages Act 1999 (QLD) and the Retirement Villages Act 1986 (Victoria). You can read more about it and order a copy here: The Retirement Village Handbook