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on the Tuesday, May 27, 2025
Moving into a retirement village is a major life decision - not just emotionally and financially, but also legally. Retirement village contracts and ownership models can be complex, and understanding your legal rights and obligations is essential to avoid surprises down the track.
Whether you're considering downsizing or helping a loved one plan for retirement living, this guide will help you navigate the key legal considerations when moving into a retirement village in Australia.
Unlike buying a typical residential property, moving into a retirement village usually involves a licence, lease, or loan arrangement, not full ownership of the unit. The three main contract types are:
Loan and Licence Agreement: You pay an upfront fee (ingoing contribution) for the right to occupy the unit but don’t own it.
Leasehold: You lease the unit for a long term, often 99 years.
Strata or Freehold Ownership: Less common, you buy the unit outright but still pay village fees.
Each arrangement has different implications for entry costs, ongoing fees, and what happens when you leave.
Tip: Always request a full copy of the contract and disclosure documents well in advance, and have them reviewed by a solicitor experienced in retirement village law.
Retirement village costs typically fall into three categories:
Entry fees (ingoing contribution): A lump sum to secure your place in the village.
Ongoing fees: Monthly or fortnightly payments for services like maintenance, staff, and facilities.
Exit fees (deferred management fees or DMF): Charged when you leave the village, often a percentage of your original or resale price.
Make sure you fully understand how much you’ll pay, when, and what services are covered.
Each Australian state and territory has its own laws governing retirement villages, including rules about:
Cooling-off periods
Transparency of fees and charges
Dispute resolution processes
Safety and maintenance standards
Management responsibilities
These laws are designed to protect residents, but it's important to be familiar with your rights under the legislation in your state.
It’s crucial to understand what happens when your contract ends, either due to a move or death. Key questions include:
How are exit fees calculated?
Who is responsible for reselling the unit?
When will your refund or entitlements be paid?
Are there ongoing costs until the unit is resold?
These terms can significantly impact your estate or your ability to fund future care, such as entry into an aged care home.
To make an informed decision, ask these important legal questions:
What type of legal arrangement is this - lease, licence, or freehold?
What are the exact costs at entry, during residency, and on exit?
Is there a cooling-off period if I change my mind?
What services and amenities are included in ongoing fees?
Who is responsible for maintenance and repairs?
What happens if I need to move into aged care?
Before signing any agreement, consult:
A solicitor with experience in retirement village contracts
A financial adviser who understands aged care and retirement planning
Family members or trusted advocates who can help weigh up the options
This ensures that you're making a decision that’s not only financially sound but also legally secure.
Retirement villages can offer a fantastic lifestyle, but it’s essential to go in with your eyes open. By understanding the legal framework, fees, and your rights, you can make a confident and informed decision about your next chapter.
Use Retirement Living Online to search for retirement villages across Australia, and access information on contract types, services, and pricing. It’s your first step toward making a secure and stress-free move.
