Types of Retirement Village Ownership
Individuals and couples who are considering living in a Retirement Village can be confronted with a wide variety of legal structures, and often very complex documentation. It is unfortunate, but this complexity can actually deter individuals from taking the effort to fully understand their legal and financial position - something which is critical if they are to make the right decisions at a crucial juncture in their lives, and to ensure they remain financially secure.
Consistent with our approach elsewhere, we provide an overview below of the various legal structures you may encounter, but recommend strongly that you seek experienced legal advice before committing to any village. Legal fees paid at this stage will pale into comparison with those you will encounter later if things should "go wrong" - these types of commitments should be approached on the basis that they are as much as an investment as a lifestyle choice.
The types of legal structure you will encounter include the following:
We summarise each of these options in more detail, and would mention that most "ownership" options such as Strata and Community will attract stamp duty - in contrast to the non-ownership options including leases and licenses. Mainly for this reason, but also because it suits owners and operators, long term or lifetime lease and license arrangements are the dominant legal structure.
Since October 1, 2013 the NSW Government has required the use of standard contracts for retirement villages - which make it easier for prospective residents to compare costs and conditions. The standard contracts are a useful resource for individuals looking to familiarise themselves with these types of documents. Additionally, in 2016 the Property Council constructed a pro forma guide to retirement living contracts containing the "key elements of a good residence contract", to act as a reference.