There are certain rights, fees and charges that apply when you permanently leave a retirement village as a registered interest holder. A registered interest holder is:
- an owner in a strata scheme or a community land scheme retirement village,
- an owner of shares in a company title scheme giving you a residence right in a retirement village, or
- the holder of a registered long-term lease in a retirement village that entitles you to at least 50 percent of any capital gain that may be made when your unit is sold. A registered long term lease is a lease that has a term of 50 years or more, or runs for the duration of your life.
When does my residence right end?
Your right to live in your retirement village unit only ends when:
- the sale of your unit is completed (if you are an owner), or
- your long term lease is assigned (if you are a holder of long term lease of 50 years or more), or
- you permanently vacate your unit (if you have a registered long-term lease sharing at least 50 percent of the capital gain).
Selling your unit
If you decide to sell your unit, you can:
- set the sale price, and
- appoint a licensed agent, or the operator if they are a licensed agent, to help you sell your unit. You are not required to appoint the operator, but can choose to do so if you wish.
Must I pay the costs of selling my unit?
All costs of the sale of your unit are shared between you and the operator in the same proportion that you would share any capital gain from the sale. Although, 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.
Can the operator refuse to enter into an agreement with the buyer of my unit?
You must refer anyone who is interested in purchasing your unit to the operator so they can provide the prospective resident with information about the village. In some circumstances the operator may refuse to enter into an agreement with a purchaser. For example, if the person is under the required age for entry or if they are not capable of living independently.
A departure fee, also known as an exit fee or deferred management fee, is the amount that you have to pay when you permanently leave the village. This fee can be a significant amount so check your village contract for details.
Your departure fee can be pad out of your ingoing contribution. Go to the fees and charges page for more information.
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. Recurrent charges are for general services, for example management and administration services or gardening and maintenance services.
If you share any capital gain made from the sale of your unit with the operator, you (or your estate) only need to pay the full amount of recurrent charges for the first 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.
Payment of recurrent charges relating to optional services
Recurrent charges for optional services stop as soon as you permanently vacate the premises.
Optional services may include:
- laundry services,
- food and meal services, such as Meals on Wheels, or
- home cleaning services.
Is interest payable on unpaid recurrent charges?
Yes. If you (or your estate) fail to pay the recurrent charges that are due and payable after you leave the village, the operator can charge interest on the unpaid amount. The law sets the maximum interest rate an operator may charge, which is calculated by reference to the cash interest rate set by the Reserve Bank of Australia.
Payment for repairs
In some cases, you may have to pay for repairs when you permanently leave your unit. You must leave the unit in the same condition as when you moved in, less fair, wear and tear.
What is fair wear and tear?
Fair wear and tear is the deterioration that occurs over time with the use of the unit even though the unit receives reasonable care and maintenance. Deterioration could be caused by:
- ordinary use.
You are only responsible for negligent, irresponsible or intentional actions that cause damage to the unit. Some examples are provided below to help explain the difference:
Fair wear and tear - you are not liable
Damage - you are liable
Faded curtains or frayed cords
Missing curtains or torn by resident’s cat
Furniture indentations and traffic marks on the carpet
Stains or burn marks on the carpet
Scuffed wooden floors
Badly scratched or gouged wooden floors
Worn kitchen benchtop
Burns or cuts in bench top
Loose hinges or handles on doors or windows and worn sliding tracks
Broken glass window caused by resident
Cracks in walls from movement
Holes in walls caused by resident moving shelving or picture hooks
Water stain on carpet from rain through leaking roof or bad plumbing
Water stain on carpet caused by overflowing bath or indoor pot plants
Must I renovate the unit when I leave?
No. The operator cannot ask you to renovate your unit when you leave if your village contract started after 1 July 2000. If you started living in your unit before 1 July 2000, check if your contract contains a refurbishment clause. If it does, the operator must give you at least three quotes for the cost of the work unless you agree to use the tradespersons who ordinarily carries out maintenance in the village.
Payment to you on leaving the village
The operator must provide you with any refundable component of your ingoing contribution or the payment of the 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.
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.