You've moved into a retirement village but you're no
longer enjoying the lifestyle, require more assistance with daily
living than what's offered or prefer a change in location. It
may also be that it has become more convenient for you to live with
a friend or family member. Moving can be stressful at the best of
times and I often have clients coming to me with questions about
financial obligations, many wondering if the process is even worth
it to begin with.
The following checklist will help you prepare and avoid any
unexpected costs when you walk out the door:
Where are you going to live?
Start discussing your feelings about the future with the ones
close to you. It is important that they know that you are no longer
interested in living in your current village. It is equally
essential that you know where you are going to live beyond the
moving out process. Will you be moving in with your family or a
close friend? Perhaps you will be moving to a retirement village
that is closer to the people you love, or even in an area
you're more acquainted with or have a preference for? Getting
these details straightened out early on can take a load off your
shoulders when you're done with your financial obligations.
Do I pay someone something?
When you moved in, it is likely that you paid the village what
is known as an 'ingoing contribution'. Now, as you are
about to leave the village, it is commonplace for the operator to
keep a percentage of this initial lump sum that you paid them. This
is usually referred to as a departure fee and is standard across
most villages. If you're not sure how much of that initial sum
of money will be kept, you need to revisit the contract you signed
before moving in. Your paperwork will document what percentage the
village operator will be keeping but if you're having trouble
finding the information or would like to confirm the exact figures,
your lawyer can assist you.
In regards to what money you get back from the lump sum,
according to the law, if you are what is called a 'registered
interest holder' (the term will be found in your contract),
then your retirement village operator should have to repay your
contribution (minus their departure fee) within 14 days after the
village enters a new agreement with a new resident.
This can catch out residents who are expecting to receive the
money back within a short time of moving as you can be waiting
significantly longer than you anticipate if the village doesn't
find someone to take your place. Plan for the worst case scenario
so you aren't short of funds when moving into your new
If you find that you are a 'non registered interest
holder', all hope is not lost when it comes to receiving some
of your 'ingoing contribution' back. It just means that the
village operator must repay you within six months of you leaving
the premises so again, you shouldn't count on having the money
straightaway to assist with your relocation.
What about all money I've been paying for services and
maintenance on an ongoing basis?
The recurrent charges you have been paying for things like the
general maintenance of the village, payments to staff and insurance
will cease if you are a 'registered interest holder'.
However, the catch is that these payments will only cease once a
new resident enters the premises you are leaving. Alternatively, if
the village operator is unable to find a new resident within 42
days of you leaving, then you will be able to split the recurrent
charges with the village; in that the village will pay half and you
will pay half until a new resident can be secured. Bear in mind
that this can be a significant ongoing outlay if your property
isn't filled quickly following your departure –
especially if you are moving to another retirement village where
you will also be expected to make regular payments.
Who is responsible for selling my home in the retirement
It might be news to you that real estate agents often don't
deal with retirement village units. In most cases, your village
operator acts as the agent selling the property on your behalf.
This can work in your favour as they are well-versed in dealing
with retirement village contracts and, of course, it is in their
best interests to receive a good return on their property. Make
sure you read over the fine print in any contracts as your
responsibilities for the sale may include paying commission and
advertising costs. In a worst case scenario, you may also be
responsible for paying for updates to the property to make it more
appealing to prospective buyers.
As always, it pays (literally) to do your homework so you know
exactly what costs you may be looking at. Hopefully you will be
lucky and your property will be filled quickly but you should plan
ahead in case your property is slow to move.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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