Leaving a retirement village can be both a relief and a burden to yourself and to your family. Whilst you are saying goodbye to the friends you have made in the village, you may be moving in with a close family member or friend. You must also consider the financial implications that come with departing a retirement village. Set out below are a list of processes that should be followed when it comes time to leave.
When you moved into the retirement village, you will have likely paid a lump sum to the retirement village for the right to reside there. This is called your 'ingoing contribution'. Now that you are leaving the village, the village operator is entitled to take a percentage of that ingoing contribution from you. This is known as a departure fee. The terms of the contract between yourself and the village operator will determine the amount of the departure fee payable, but in general, it will be somewhere between 20% and 30%.
Under the retirement village legislation, if you are a 'registered interest holder', then the village is liable to repay your ingoing contribution (minus the departure fee) within 14 days after the operator enters into a new agreement with a new resident. This could well mean that if the operator is unable find anyone to purchase your residence, then you will not receive what is left of your ingoing contribution for some considerable time. If you are a 'non registered interest holder', then the same provisions apply, except that the village must repay your ingoing contribution to you within 6 months of you permanently vacating the unit.
From the date that you moved into the retirement village, you will have been paying recurrent charges, usually on a fortnightly or monthly basis. These recurrent charges cover general maintenance of the village, payments to staff and insurance etc. If you are a 'registered interest holder' then your liability for recurrent charges ceases as follows:
- The day a new resident enters into an agreement to reside in the unit; or
- If the village is not able to find a new resident within 42 days after you vacating the premises, then yourself and the village are liable for half of the recurrent charges until such a time as a new resident is found.
Sale of the Premises
As most real estate agents do not deal in retirement village space, it is likely that you will appoint the retirement village as your agent to sell the premises. This is because they are experienced in selling retirement villages, and it is in their best interest to achieve the best price possible. As with any property sale, you may be responsible for commission payments and advertising costs.
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.