Retirement Living

As you approach retirement age, it is a good idea to investigate the living options available to you.
By Michael Osborne

Following the interest from the ‘Planning Ahead’ article that was featured in the Winter 2002 issue, we present further information on retirement living. With so many living options now open to the retiree, it can be difficult to decide on what type of home will suit you best for your ‘golden years’. In the interest of narrowing down the field, I have compiled some important tips and guidelines on two of the most popular choices; retirement villages and residential caravan parks. As with any major life decision, choosing a retirement abode should only occur after thorough research and assessment of the pros and cons. Take the time to discover the best option for you and once you have decided, become completely familiar with all the ins and outs before committing yourself.

Moving into a retirement village
As an option, moving into a retirement village must be carefully considered, as the lifestyle may be quite different to what you have been used to. People have many different reasons for moving into a village. Difficulty in maintaining their current home, safety and security concerns, care and support or the company of people their own age are a few of the factors that may contribute.

Choosing a village
After considering the options and deciding on village life, you then have to shop around for one that will suit your needs. A few things to consider:

- Where is it located? Is it close to family and friends, shops, services and public transport?

- Is there adequate parking for visitors?

- Accessibility – one day you may need to use a wheel chair or walking aid.

- What options are available if you become too frail to live alone?

- Will community care services be available?

- Are family and friends able to stay and for how long?

- Are pets allowed?

- What is the cost? These can include entry costs, recurrent charges, extra fees for services, the cost of moving to a higher level of care, departure fees and the cost of leaving the village.

- Type of contract? Is it loan/licence, lease, strata or company title? These will make a difference to your rights as a resident and the costs you may face.

- How many vacant units are in the village and what is the average time for re-sale of the type of unit you are interested in? You or your estate may be responsible for the ongoing payment for all fees until another
resident is found.

Buying or renting a caravan or relocatable home
Buying or renting a caravan or relocatable home may offer a relatively inexpensive and low maintenance option. Usually located in residential parks, which can include caravan parks, manufactured home estates and established mobile home villages. While the set-up costs may be low, care should be taken to examine the ongoing expenses likely to be incurred apart from the rent. These can include visitors’ fees, electricity, gas, telephone and water usage. Drawbacks can include the lack of privacy (holiday periods), and the high cost of relocating. Check out several parks and their facilities for a trial period to see if the lifestyle suits.

Tenancy: There are two types of Agreement:

- A Residential Site Agreement: a site for a caravan with a rigid annex or a site for a manufactured home

- A Moveable Dwelling Agreement: a site for a caravan without a rigid annex or a home or a site rented from the park owner.

Before signing: Before signing an Agreement, the park owner must give you the following items:

- A copy of the proposed Agreement known as a Residential Site Agreement or a Moveable Dwelling Agreement, filled out by the park owner or manager. Seek advice before signing.

- A copy of the booklet Residential Park Living.

- A copy of the park rules.

- A list of all fees and charges (including entry costs) the resident will have to pay on signing the Agreement.

Operators obligations to prospective residents
The Retirement Villages Act 1999 places a number of obligations on operators when dealing with prospective residents. Prospective residents must be given a copy of the Department of Fair Trading’s Retirement Village Living booklet. The booklet outlines some of the basic rights and obligations under the Act. They must also be given a disclosure statement, in the form set out in Schedule 1 of the Retirement Villages Regulation 2000.

Waiting List fee: It is a matter for each operator to decide if they have a waiting list, and if so, whether a waiting list fee is charged. However, the list fee cannot exceed $200. The fee can only be charged if the village has a written policy setting out the way in which the waiting list operates. A copy of this policy and a receipt must be given at the time of payment.
A full refund can be asked for at any time and any reason. Refunds must be made within 14 days of a written request.

Protection: The Consumer, Trader and Tenancy Tribunal (CTTT), is a new Tribunal created in February 2002 designed to streamline procedures by having one body handling all consumer issues. The CTTT is not the same as a court and acts on as little formality as possible. It is not bound by the rules of evidence. However, parties can be placed on oath and persons can be summoned to give evidence. Issues handled include:

- Rental bond and other residential tenancy issues.

- Budget disputes in retirement villages.

- Rent increases and park rules changes in residential parks.

The Legal Structure: When you buy into a retirement village, you may not necessarily own the unit you live in. The legal structure provides the basis for your occupancy. The four different legal structures commonly used in retirement villages are loan/licence, lease, strata and company title.

Loan/licence: This scheme has traditionally been offered by non-profit organisations where the developer retains ownership of the village. You pay an in-going contribution in the form of an interest free loan, part of which may be a donation. In exchange, you receive a licence to occupy a unit and to share the village. The right to occupy ends when you die or leave the village and a refund is made to you or your estate, within a fixed period.

Lease: This scheme is usually offered by private sector village operators under which the developer retains ownership of the village. You pay an in-going contribution in the form of a lease premium or pre-paid rent. In exchange you receive a long term lease on a unit and the right to share the use of the village amenities. The lease ends when the resident dies or gives notice to surrender the lease. As an outgoing resident, you are entitled to a refund of the lease premium, less any departure fees and other charges. You may be required to pay any recurrent charges until the lease is finalised.

Strata: You own your own unit under this scheme. The common areas may be owned by the Owners’ Corporation or the village operator. The Owners’ Corporation usually enter into a contract with the village operator, who provides services to residents. You are entitled to the sale price and the operator may get a departure fee and a portion of the capital gain. You are usually required to pay recurrent charges until the unit is sold.

Company Title: Here the village property is owned by the village company which sells shares to residents. Under the company’s articles of association, residents who own shares may occupy a unit and use the facilities. When the shares you own are sold, you are entitled to the sale price less any departure fee. The operator may be entitled to a portion of capital gain. Recurrent charges also apply until finalised.

This information is to be considered as a guide only and not legal advice. For full details you should contact the appropriate authority.