March 5, 2015
Moving into a retirement village can be an easy transition for most residents. For others, it can prove to be a confusing experience with confusing long documents to read and understand.
There are some key questions that clients moving into a retirement village should ask themselves and matters which they should have clarified before committing to a retirement village.
1.WHAT TYPE OF VILLAGE ARE THEY MOVING INTO and what level of care is available?
Is it a retirement village? Is it a rental village? Is it an aged care facility? Each type of retirement living has different levels of protection for residents and have different fee structures.
These days there are some villages which offer a wide range of personal services, including some which may be provided at aged care facilities.
If you require some care or services to be provided, care needs to be taken to ensure that the village can service your short term as well as long term needs.
2.NOT UNDERSTANDING THEIR INTEREST IN THE VILLAGE
Is the a freehold village? Is it a leasehold village? Is it shares in a company?
This will help determine the protections (if any) for the residents if the operator was to be insolvent.
It also assists with understanding how the entry into the village can be structured and also the costs of entering the village and exit processes (e.g. transferring leases or transferring shares).
3.NOT TAKING THE TIME TO LEARN HOW THE EXIT FEE IS CALCULATED
There are a number of ways in which your exit fee can be calculated.
It can be calculated by reference to the resident’s ingoing contribution or the ingoing contribution of the new resident who moves in when the unit is vacated.
How the exit fee is calculated will impact on the money that the resident will walk away with when he or she leaves the village.
4.EXPECTING TO RECEIVE THE EXIT ENTITLEMENT IMMEDIATELY ON EXIT
The exit entitlement that a resident receives when leaving the village may not be paid as soon as the resident leaves. This may impact on the ability of the resident to pay an accommodation bond if the resident is entering an aged care facility.
The exit entitlement may be paid on the occurrence of events such as:
- the unit being sold to a new resident; or
- the expiration of a period of time – the period of time is at the discretion of the operator.
5.NOT KNOWING WHAT HAPPENS IF THE RESIDENT TAKE ILL OR IS ABSENT FROM THE VILLAGE FOR A LONG PERIOD
A resident’s interest in a unit with the village may be affected by long absences from the village due to illness.
Also, the resident’s ability to live independently may also impact on the resident continuing to live in the village and the residence contract may give the operator the right to take steps to assist with the resident’s transition into an aged care facility or other village that may be more appropriate for the resident’s level of independence.
6.NOT OBTAINING LEGAL ADVICE BEFORE SIGNING ANY DOCUMENTATION
Signing an application or a Public Information Document may trigger the beginning of the cooling off period.
Once the cooling off period expires, a resident may not be entitled to a refund of any moneys (e.g. a deposit) that the resident has paid to the operator.
We have experience in advising residents on entry into, and exit from, retirement villages, manufactured home estates and aged care facilities.
We ensure that clients understand their obligations (particularly their financial obligations) when entering retirement villages, manufactured home estates and aged care facilities so that there are no surprises when the client exits the village.
Please contact us if you require any further information.