When buying a home in an over 50’s village, not all villages are the same and there are many different types of villages, and many different types of village contracts. You will need to consider much more than the advertised purchase price, and get legal advice before buying, to ensure that you are fully aware of all the legal and financial obligations involved and what you can expect in the future.
Some villages have no deferred management fees or exit fees; there is a big variation in ongoing monthly maintenance charges between villages; residential stamp duty does not apply to many villages; residents may be eligible for government rental subsidies; some villages offer residents access to capital gains on re-sale.
Some lifestyle villages offer a relocatable home for sale, on a leased site. This is often called the land-lease model.
In retirement villages it is common for legal occupancy rights to be determined by loan and licence agreements; leasehold title; strata or community ownership schemes or company title, so it is very important to obtain legal advice before signing any agreement.
Your legal adviser will also be able to confirm what legislation is in place to protect your rights in relation to the specific village you are interested in. This will vary from state to state, and according to the type of village you are considering.
Retirement village legislation applies in each Australian state to protect residents, and requires the prior disclosure of certain information and allows a cooling off period before a purchase is binding.
Residential tenancy legislation also exists in each Australian state to protect residents of those villages who have some form of rental agreement in place.
Most states and retirement village operators are now moving to a standard form sales contract, however there may be older existing contracts which have been in place for many years in some villages, which complicates the legal situation for some long standing residents of retirement villages.
So the important take-out message is you must SEEK LEGAL ADVICE FIRST before signing any contract to enter a retirement village or other type of lifestyle village, so you know exactly what you are getting into before you commit.
Having said that, there are many excellent Australian villages with very happy residents – who are enjoying a much better and more active retirement lifestyle, at a very affordable price point because they found a location and a village to really suit their needs. A village setting can offer a new low maintenance home, with resort style facilities, compatible neighbours, and attractive social activities at a lower cost than comparable residential real estate in surrounding areas. Village living offers a lifestyle package, not just a new home.
Happy House Hunting!