Retirement villages contracts – changes you should be aware of
02 Sep 2019
Moving into a retirement village should be a chapter of life that you look forward to – whether it’s for the community living or the additional services and lifestyle choices available. However, contracts associated with retirement villages can be complex. In this article Gerald Santucci outlines recent changes to the Retirement Villages Act 2012 (ACT) that affect those thinking of buying a unit in a retirement village.
Retirement villages are communities of residences owned or operated by an organisation (often described as the provider) that offers accommodation for people aged 55 years or older.
The types of accommodation include independent living in self-contained units and assisted living through serviced premises, with providers delivering support services such as meals and cleaning.
In the ACT, the different rights and obligations of providers and residents can be distinguished by considering where ownership in the residence rests.
Retirement Villages Act 2012 (ACT)
The ACT Retirement Villages Act 2012 (the Act) commenced on 4 March 2013. It requires more information be provided to prospective residents, protects the rights of current residents and contains clear guidance for operators than previously required under the Fair Trading (Retirement Villages Industry) Code of Practice 1999.
Amendments to the Act
Amendments to the Act commenced on 1 July 2019. These amendments followed the Retirement Village Legislation Amendment Bill 2018, which was introduced by the ACT Government in November 2018.
These changes primarily affect those who sell units in a retirement village in the ACT where the unit is part of a units plan. This is to contrast with those ‘purchases’ of leasehold villas in retirement villages where there is basically a lease and a contribution from the lessee (the retiree).
Units in a units plan
A sale of a unit in a units plan, whether or not a retirement village unit, comes under the jurisdiction of the Civil Law (Sale of Residential Property) Act 2003. A new section has been inserted into that Act. This section divides the documents that have to be attached to a contract for sale of a residential property (in a retirement village). These sections are ‘initial’ required documents and ‘later’ required documents.
The initial required documents become the required documents for sale of this type of unit and include:
- the Crown Lease
- the current Certificate of Title
- the Deposited Plan.
These are very similar to the required documents for a property that is not in a retirement village, but exclude:
- a lease conveyancing enquiry
- a building conveyancing enquiry
- an energy efficient rating and minutes of owners’ corporations.
These later documents mentioned above all need to be shown, but they can be shown to a prospective buyer 14 days before a contract is entered into.
How can we help?
If you are thinking of entering into a retirement village contract, you should seek legal advice as these documents are generally complex and include considerations and risks that you may not be aware of. A member of our property team would be please to help you – they can be contact on 02 6285 8000 or by email.