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Entering a Retirement Village on a Long Term License

Long Term Licenses


Long term licenses are utilised in about 25% of Retirement Villages, and are one of the two dominant legals formats, together with long term leases. Much as in a long term lease, residents enter into a long term license, usually for a period of 49 or 99 years, which provides them with the right to the use and enjoyment of their specific retirement accommodation and the common areas and facilities of the village.

This structure is particularly common in villages owned and operated by church, charitable or non-profit organisations, but this does not mean that the details should not be given as much focus as contracts entered into with private operators. In practice these days there is often little difference between how these organisations operate - with many charities and non-profits now adopting very commercial approaches.

Again, much as with a lease, the license will typically provide for automatic termination on the death of a resident or, if the residents are a couple, the death of the surviving member.

Financial: Entry and Exit

You will usually be required to pay an entry fee in the form of an up-front capital payment - there is no standard name for this fee but it is often called a refundable deposit, accommodation bond or interest free loan.

On terminating the license and vacating your accommodation you will be charged a departure fee (again, often called a variety of names) which will be deducted from your up-front entry fee. Calculating departure fees can be complex, because the factors used vary according to individual agreements, and because you often can't know the precise figure until the accommodation has been sold, leased or licensed to a new resident. This is because some agreements will make you liable for ongoing costs until the accommodation is occupied again and also, if your arrangement includes a sharing of capital gains, you can't necessarily forecast the sale price with certainty.

We deal separately with Exit and Departures fees in much more detail elsewhere.

Ongoing Costs

Residents in these types of Villages are typically responsible for the following types of costs on a personal basis:

  • All utilities and services that are separately metered - including electricity, gas, telephone and broadband
  • Any additional personal services agreed with the operator
  • Insurance of their household contents, and
  • A regular Maintenance or Operating Charge to cover expenses incurred by the Operator in managing and administering the Village. This covers a wide range of costs, including staff costs, utility costs (water and rates), property and public liability insurance and possibly a "sinking fund" to fund major repairs and capital replacement. How this cost is allocated among the residences varies, but often it will based on the relative size of the residences, the number of occupants or sometimes set as a percentage of the Age pension - in any event, it will be set up as direct debit on a bank account.


If you would like to arrange professional advice in relation to the above matters, please complete the Inquiry form below providing details and you will be contacted accordingly. You will receive a fee quotation in advance of any advice or services being provided.