Different retirement villages offer different types of occupancy and ownership arrangements. The type of village you move into affects some of your rights and the costs you may have to pay under your contract.
This section gives a general overview of the common types of arrangements offered by operators. However, every village is unique and the information may apply differently in individual circumstances. Before you move into a village, make sure to get specific advice about your rights and obligations under your proposed contract.
A leasehold arrangement is when the village operator owns the units and each resident signs a lease. Leases in retirement villages are commonly for 99 years or more. Any lease with a term of more than three years is required to be registered on the title deed held by Land and Property Information.
The amount you pay for the leasehold varies depending on the market, similar to if you were buying the unit. You’ll also pay recurrent charges in a leasehold arrangement.
When you leave the village:
- Your contract may require you to pay a departure fee or other amounts such as ongoing recurrent charges while the unit is on the market.
- If you are a registered interest holder, you have the right to set the selling price and choose the selling agent and you will usually have to pay some of the sale costs, such as commission and advertising. Your might also have to share any capital gain with the operator.
Once the unit is re-leased or occupied, the balance of your refund must be paid to you within 14 days unless your contract provides for earlier payment.
Loan and licence arrangements
A loan or licence arrangement 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.
You pay an ingoing contribution to the operator, usually in the form of an interest-free loan, part of which may be a non-refundable donation. You will also pay regular recurrent charges.
Strata or community schemes
Buying a unit in a strata or community scheme is another arrangement that is available in some villages. You pay the agreed purchase price to the owner of the unit under a sale of land contract. This makes you the owner of the unit and you automatically become a member of the owners corporation or community association. You’ll have to pay levies, on a quarterly basis, to the owners corporation or community association to cover the cost of managing the common property. Visit the strata schemes page for more information on fees, selling in a strata scheme and your rights.
Company title schemes
A small number of villages operate under company title. The village is owned by a company, and you can buy shares at market value. The shares give you the right to occupy the unit. You have similar selling rights as strata villages. A Board of Directors, appointed by the shareholders, manages the property and you need to comply with the company’s constitution.
A small number of villages offer units for rent to retired people. There are no ingoing contributions to pay under the tenancy law when you enter the village, or fees and charges to pay when you leave. You will generally pay a rental bond (maximum four weeks’ rent), regular rent payments and water usage (if you have a separate meter). Visit the renting page for more information on renting.
Registered interest holders and non-registered interest holders
Depending on the type of village contract you sign, you may be either a registered interest holder or a non-registered interest holder:
You are a Registered Interest Holder in a retirement village if you are:
- 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 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.
If you live in a retirement village and do not fit into one of the categories above, then you are a Non-Registered Interest Holder. That is, you live in the retirement village under a rental, loan/licence arrangement or a registered lease that has a term of less than 50 years.
There are some important differences between the contractual rights and obligations and financial terms, depending which category you are in. Registered interest holders generally have more responsibility and independent decision making in relation to their property but may pay additional charges after leaving while their unit is on the market.