In brief - Plain English documents aim to remove complexity and
A new standard form of plain English retirement village contract
specifies all costs, services, facilities and alterations, as well
as arrangements for performing repairs and sharing capital
New standard form of contract, general enquiry document and
The NSW state government has released a new standard form of
contract and a general enquiry document as well as a revised and
simplified disclosure statement to be put in place by all
retirement villages by 1 October 2013.
"These reforms will make moving into a (retirement) village
easier and less stressful for retirees and their families,"
the Minister for Fair Trading, Anthony Roberts, had said.
"Under the new standard contract, the confusion and
complexity that currently exists will be removed, with the new
documents written in plain English so they are easier to
What is covered by the new standard form of contract?
The new standard form of contract for retirement villages covers
various issues such as:
The type of residence being acquired in the village
All costs the resident must pay for entering, living in and
leaving the village
If there are capital gains, how they will be shared with the
Any settling in period
All services and facilities to be provided
Any alterations and additions that are agreed to be done
All repairs and maintenance
General enquiry document summarises financial matters,
services, regulations and governance
In addition to a new village contract, there is also a new
general enquiry document. This sets out in summary information
about the village, management, accommodation, financial matters,
facility services and village life.
"Village life" covers the controversial issues of
whether pets are allowed, whether residents do their own gardening,
whether there are organised social activities in the village,
whether the village has a residents' committee and whether
there is a secretary or chairperson.
Prospective residents encouraged to seek independent legal or
The disclosure statement will be reduced by nearly fifty per
cent, with some of the information being moved across into the
general enquiry document. The disclosure statement is still
required to be given at least 14 days before the resident enters
into a village contract.
The statement recommends that the resident seeks independent
legal or financial advice if they are unsure about the information
contained in the statement. The new disclosure statement is written
in plainer English.
When doesn't the standard form of retirement village
The new standard form of village contract does not apply to:
stand alone contracts giving rights to use a garage, parking
space or storage room, provided they are not contained within a
resident contract or services contract
a resident's contract relating to premises that are subject
to a community land scheme, company title scheme or strata
New documents to be used by retirement villages from October
Accordingly, where the standard form contracts do apply, village
operators will need to have the new general enquiry document, the
revised and simplified disclosure statement as well as the new form
of standard contract on and from 1 October 2013.
If you require more information you should read the NSW Fair
Trading publication Moving into a Retirement Village? as that gives an
overview of the retirement village industry and contains useful
checklists for prospective residents.
The article discusses the legislative requirements and then provides some comments on common mistakes made by caveators.
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