Leaving a retirement village

Leaving a retirement village will be different depending on your ‘type of tenure’. This page explains the circumstances and costs involved when moving out.

The information below is not for renters. If you are renting, please see our renting section.

Before leaving a village, you may wish to meet with your operator for a contract check-up meeting. At the meeting, operators are required to provide a verbal and written summary of all of the costs involved as if you were to leave the village on a set date, based on the terms and conditions of your contract.

For ‘registered interest holders’

You are a registered interest holder if you are:

  • an owner in a strata or community scheme
  • an owner of shares giving your residence rights
  • the holder of a registered long-term lease where you are entitled to 50% of the capital gain that may be made by the time you move out.

Your right to live in your unit only ends when:

  • the sale of your unit is completed (if you’re the owner), or
  • your long-term lease is ended or assigned (if you’re a holder of long term lease of 50 years or more).

Selling your unit

If you decide to sell your unit, you will need to make the necessary arrangements just like you would to sell a property outside of a village.

  • You can set the sale price and appoint a real estate agent to handle the sale.
  • If you are using an external agent, operators are required to provide any information and assistance that is necessary to facilitate the sale of the unit.
  • Or, you can ask the operator to sell your unit on your behalf – but you don’t have to use the operator if you prefer to use an external agent.
  • The person who buys your unit will need to sign a sale of land contract with you as the outgoing resident as well as a village contract with the operator.
  • If selling, you must refer anyone who is interested in buying your unit to the operator so they can provide the prospective resident with all necessary information about the village. In some cases the operator may refuse to enter into an agreement with a purchaser (eg the person is under the minimum age to live there).

Selling costs

If you decide to leave your retirement village there will be costs, fees and charges involved.

  • If you are entitled to keep 100% of the capital gain made on your unit, you are responsible for all costs involved in selling the unit.
  • Alternatively, if under the contract the operator is entitled to some of the capital gain made on your unit, the operator must also pay some of the selling costs. This amount will be in the same proportion as the capital gain is shared, which in most cases is around 50%. However, if you wish to appoint an agent to sell your unit rather than using the operator or an agent selected by the operator, you alone will have to pay any commission to that agent.

Departure fees

Also known as an ‘exit fee’ or ‘deferred management fee’, a departure fee is the amount you have to pay when you permanently leave the village.

  • This fee is paid to the operator when a resident leaves the village (and is usually deducted from the sale price of the unit).
  • This payment is often a percentage of the ingoing fee, or the sale price, and is agreed to in the contract upfront.
  • This fee can be a significant amount: check your village contract for details!
  • Departure fees are a source of income for operators which can be used for purposes not covered by recurrent charges, such as improving or expanding the village services and facilities.
  • Departure fees also allow for lower recurrent charges and greater flexibility with entry prices, enabling prospective residents to pay a lower upfront payment by agreeing to an amount being kept by the operator when they leave. This provides more people with access to retirement villages.

Ongoing charges for general services

Ongoing charges for general services (also called ‘recurrent charges’) go towards the upkeep of the village (eg village administration, gardening and maintenance).

  • You must continue to pay recurrent charges for general services when you leave your unit. Payment generally continues until a new resident enters into a contract with the operator or starts living in the unit.
  • If you share any capital gain made from the sale of your unit with the operator, you only need to pay for these general services for a maximum of 42 days after you leave. After this time, you and the operator share the cost of the recurrent charges in the same proportion as you share the capital gain.
  • If you (or your estate) fail to pay for any recurrent charges that are due, the operator can charge interest on the unpaid amount.

What about ongoing charges for options services?

You stop paying these charges as soon as you permanently vacate the premises.

Repairs and renovations

You do not have to make any repairs or renovate your unit before you decide to leave the village. The operator cannot force you to do any work before selling your unit.

Some fixes and improvements may improve the re-sale value of your unit. However, make sure any changes are cost-effective and check first on the permissions you may need to make the changes.

Payments to you when leaving

The operator must pay you any refundable part of your ingoing contribution or proceeds from the sale of your unit, less any fees and charges.

  • This should occur within 14 days after a new resident enters into a contract with the operator or when the operator receives full payment from a new resident for your unit. The same 14-day period also applies for any payments you are entitled to if you terminate your village contract during the settling-in period (also see the information in "What if I leave during a 'settling in' period?" on this page).
  • If you own a unit in a strata retirement village, the proceeds of the sale of your unit will be paid to you by the agent, rather than the operator.
  • If your village contract states that a share of any capital gain made on the sale of your unit must be paid to the operator, this amount will also be deducted from the proceeds of sale of your unit when you leave the village.

For ‘non-registered interest holders’

You are a non-registered interest holder if you have a ‘loan or licence’ type of tenue, or a registered long term lease under 50 years.

Loan or licence arrangements are mainly offered by non-profit organisations such as church or charity village operators.

This arrangement allows you to live in the unit, but you do not own it or have a registered interest in it.

Selling your unit

When you permanently leave the village, the operator determines the sale price for your unit and all other aspects of the re-sale of your unit.

  • You’re not required to pay any costs involved in selling your unit. These must be paid in full by the operator.
  • You’ll receive any refundable money within 14 days after your unit is re-sold or re-occupied.
  • If your unit is not re-sold or re-occupied, the operator must pay you your refund after six months from the date you move out unless your contract says otherwise.

Departure fees

Also known as an ‘exit fee’ or ‘deferred management fee’, a departure fee is the amount you have to pay when you permanently leave the village.

  • This payment is often a percentage of the ingoing fee, or the sale price It is agreed to in the contract upfront. The fee is paid to the operator when a resident leaves the village and is usually deducted from your ingoing contribution
  • This fee can be a significant amount: check your village contract for details!
  • Departure fees are a source of income for operators which can be used for purposes not covered by recurrent charges, such as improving or expanding the village services and facilities.
  • Departure fees also allow for lower recurrent charges and greater flexibility with entry prices, enabling prospective residents to pay a lower upfront payment by agreeing to an amount being kept by the operator when they leave. This provides more people with access to retirement villages.

Ongoing charges for general services

Ongoing charges for general services (also called ‘recurrent charges’) go towards the upkeep of the village (eg village administration, gardening and maintenance).

  • You only need to pay for these general services for a maximum of 42 days after you leave. This is cut short if a new resident moves in during this time.
  • If you (or your estate) fail to pay for any recurrent charges that are due, the operator can charge interest on the unpaid amount.

What about ongoing charges for optional services?

You stop paying these charges as soon as you permanently vacate.

Repairs and renovations

You’re only required to pay for repairs if a condition report was completed when you moved in.If one was, you must return the unit to the way it was when you moved in (as noted in the report).

You are only responsible for negligent, irresponsible or intentional actions that damaged the unit. You are not responsible for ‘general wear and tear’.

Some general examples:

Fair wear and tear - you are not liableDamage - you are liable
Faded curtains or frayed cordsMissing curtains or torn by resident's cat
Furniture indentations and traffic marks on the carpetStains or burn marks on the carpet
Scuffed wooden floorsBadly scratched or gouged wooden floors
Worn kitchen bench topBurns or cuts in bench top
Loose hinges or handles on doors or windows and worn sliding tracksBroken glass window caused by resident
Cracks in walls from movementHoles in walls caused by resident moving shelving or picture hooks

What if I leave during the ‘settling in’ period?

This is the first 90 days of you living in your unit.

If you move out in the first 90 days, you don’t have to pay any departure fees and you’re entitled to a refund of the ingoing contribution or the proceeds from the sale of the premises plus any recurrent charges paid under the contract.

The timing for payment of the refund depends on the type of village contract.

Leaving when a village is closing

Retirement villages are marketed as offering permanent accommodation with the security of being able to live there for life.

It can be stressful to have to relocate.

The Retirement Villages Act 1999 recognises this and provides a long notice period and strict requirements to help protect residents' rights if an operator wishes to close a retirement village.

The main reason a retirement village might close is because the operator wants to sell the land to a developer so that the land can be used for another purpose. This is known as ‘change of use’.

If the operator wants to sell the site to another operator without any residents or wants to evict residents to put the price up, this is not considered to be ‘change of use’. Attempts to evict residents or coerce them into vacating in these situations is a breach of the Act.

Important – operators cannot evict anyone simply because they want to up put up the price of accommodation.

The process for closing a retirement village can be different depending on each circumstance.  This is a general guide:

Informally telling residents

The operator may first tell residents (usually by calling a meeting or distributing a letter) that they intend to close the village. When this happens, you don’t have to move out or even start looking for other accommodation yet (if at all).

Operator must obtain development consent

The operator must first obtain development consent (usually from the local council) and any other approvals that are necessary for the change proposed to the village. In most cases, residents, along with other affected members of the public, can lodge submissions with the local council at the time the operator seeks the development consent. It may take some time for the council to consider the operator’s proposal and development consent may be declined for a number of reasons.

If the operator has not yet obtained the required approvals, residents don’t have to think about moving yet.

Operator must find alternative accommodation 

If the operator is planning to close the village, they must offer or help find alternative accommodation for the residents.

This accommodation must be approximately the same standard as the resident’s current home. This may be at another retirement village or in the general community. Importantly, it must not cost more to move into or live there than the resident’s current home.

Residents can reject an offer made by the operator:

  • that’s not of the same standard or cost, or
  • is located too far away from family or other social supports.

The operator’s first offer may not be the last one and a more suitable place may become available later on.

Residents who choose to relocate should ensure they:

  • negotiate a suitable timeframe with the operator
  • do not face any costs to move to the new location.

No resident should feel pressured into moving or that they have to go because other residents have left.

If a resident wishes to stay, they do not have to leave until ordered to do so by the NSW Civil and Administrative Tribunal (the Tribunal).

The formal process - going to the Tribunal

If the operator has obtained all required approvals (eg from the local council) and worked with the residents to find alternative accommodation, they must then apply to the Tribunal to terminate each remaining resident’s contract. Residents must be given at least 12 months written notice of the operator’s intention to do this.

The operator must prove their case to the Tribunal. Each resident will also have the right to state their case.

The Tribunal may or may not make a termination order. It will consider factors such as a resident's age or health condition. It may also consider any undertakings given to them by the operator when they moved in (eg. they were told they could stay for life).

A resident can agree to move voluntarily instead of going through the Tribunal process, but this should be their own decision. They should not feel pressured into moving or feel that they have to go because other residents have left.

What about compensation?

If the Tribunal terminates a resident’s contract and requires them to move, it may also order the operator to pay compensation for:

  • removalist and utility expenses,
  • loss of access to services or facilities,
  • higher accommodation charges at the new location.

If a resident's contract is terminated by the Tribunal, the Tribunal will determine their compensation before they move. If a resident voluntarily vacates, they should negotiate with the operator to be paid compensation before they move.

Further information

Contacts for owners and residents

Seniors Rights Service

Provides free, confidential advocacy, advice, education and legal services to older people in NSW. This includes advice to residents of retirement villages about retirement village contracts and other disputes.

Tel: 9281 3600 or 1800 424 079

www.seniorsrightsservice.org.au

Solicitor referral service of the Law Society of NSW

Can refer you to a solicitor specialising in retirement village matters.

Tel: 9926 0300

Email: lawsociety@lawsociety.com.au

Council on the Ageing (COTA)

Produces directories of retirement villages in both the metropolitan and country areas. These include details about the contracts, services and costs of each village.

Tel: 9286 3860 or 1800 449 102

www.cotansw.com.au

Law Access Service

Provides free legal information and advice in NSW.

Tel: 1300 888 529

TTY: 1300 889 529

Retirement Village Residents Association (RVRA)

A non-profit organisation which represents the interests of residents.

Tel: 1300 787 213

www.rvra.org.au

Seniors Information Service (SIS)

Provides information to seniors and others on a variety of issues.

Tel: 13 12 44

www.seniorsinfo.nsw.gov.au

Aged & Community Services Association of NSW & ACT

Represents retirement village owners and managers within the non-profit sector.

Tel: 8754 0400 or 1800 424 770

www.agedservices.asn.au

Contacts for operators

Retirement Living Council, a division of the Property Council

It represents the retirement village industry including investors, property owners, developers, the industry’s professional service and trade providers.

Tel: 9033 1900

www.retirementliving.org.au/industry

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