Retirement villages offer a number of different contractul arrangements. Below is a brief description on each to provide you with a snapshot of the options available. Contractual arrangements can often be complicated, and as such it's always important to ask the owner of the village lots of questions and if it's all a bit foreign to you seek professional advice before you sign anything.

21 days before you enter into a contract with a retirement village, the operator of the facility is required to provide you with the following documents for you to consider carefully:

- a contract relating to the provision of services to you by the operator;
- an agreement outlining payment of an ingoing contribution or recurring charge;
- the disclosure statement;
- a list of important information for prospective residents; and
- the rules or by-laws of the village.

Further information outlining all the ingoing, ongoing and outgoing costs would be beneficial to enquire about, as well as expenditure, account and income statements of the village for the last three years. You may also wish to ask questions about current and future developments for the village.
It is also advisable to check the terms of the cooling off period in the contract. Usually three clear business days are provided as a cooling off period where you have the option to rescind the contract by giving a signed notice to the village owner.

Contractual arrangements

Under the Strata Title when buying a unit within a retirement village it works very much the same as any other strata title. The main difference being the sale is conditional on the village operator approving you as a resident and the consequential signing of a retirement village contract with the village owner.

A Long Term Lease or License is commonly used in Victoria, where you pay an ingoing contribution, which gives you a lease or license to live in that particular village unit for 49 - 199 years. With this arrangement you will also pay a maintenance charge usually each month or per quarter, which in some villages is a fixed percentage of the age pension.

The Company Title arrangement sees you buy shares in the compay that owns the village resulting in having the right to occupy a paticular unit in the village. When leaving the village you will be entitled to receive the sale price of the shares at settlement, less any outgoing deductions. 

Similar to a Company Title scheme, the Unit Trust is an arrangement where you buy a unit in a trust, which entitles you to occupy that unit. The trustee of the Unit Trust legally owns the village, which holds it for the benefit of the unit holders in accordance with the terms of the trust. When leaving the village you will be entitled to receive the sale price of the unit in the trust at settlement, less any outgoing deductions. The Unit Trust arrangement as well as the company title option can be a complex legal structure and needs careful consideration before signing.

Another contractual arrangement option is a Periodic Tenancy. This is a lease which can be a written or verbal agreement between the resident and the owner, in which there is no fixed date for the end of the lease, running from rental period to rental period. A resident can sometimes pay an ingoing contribution, which some or the entire amount paid by you may be refundable at the end of the tenancy period.

Estate Planning

Estate planning can be defined as the planning and documentation of the wishes of a person for the distribution of all assets under the control of that person following death. The important aspect of estate planning is that it deals not only with those assets owned by an individual personally but the assets that are controlled by an individual.

The Will

For most people, one of the most important estate planning documents is the will. Despite a will being a simple document to prepare, many people die without having made a will, or die leaving a will that is out of date and which does not accurately reflect their current circumstances.

A will is a legal document signed by the willmaker, sometimes called the testator, which disposes of the willmaker's assets to the people of his/her choice, referred to as beneficiaries.

Powers of Attorney

A related area of importance that should be considered as part of a thorough estate plan is the preparation of a power of attorney.

A power of attorney is a formal document by which one person (called the donor) appoints another person (called the attorney) to act on his/her behalf.

The power of attorney is a separate document from the will and operates only during the lifetime of the donor. All authority given to the attorney therefore ceases upon the death of the donor.

The legal requirements for the preparation of a power of attorney are embodied in statute. Each state and territory of Australia has its own Acts of parliament that regulate the preparation of a power of attorney. Therefore, the requirements vary considerably from one jurisdiction to another.

Depending upon the law prevailing in a particular state or territory, there are generally four types of powers of attorney:

For further information in your state please click on one of the following links