Retirement Villages Regulation in New South Wales has undergone some recent changes.
The Retirement Villages Regulation 2009 (NSW) has been changed with the aim of making it easier for prospective purchasers of a retirement village home to compare costs and conditions between retirement villages.
By making these changes, the NSW government is acknowledging how complex retirement village contracts can be and how difficult it can be to be clear on the differences between retirement villages. This in turn makes it very difficult to make an informed decision.
From October 1st 2013, in New South Wales, three new compulsory documents will be created. These are:
- General Inquiry Document
- Disclosure Statement
- Standard Retirement Village Contract.
Retirement Villages General Inquiry Document
The first new document that becomes mandatory in October is the General Inquiry Document. This is a short, two page, document that outlines some basic information about the Retirement Village they are enquiring about, such as:
- the type of village it is
- who runs the village
- how many units in the village and whether more will be built
- some of the general costs including range of prices for units and recurrent charges, and
- the type of facilities available in the village
This document is to be provided to anybody making an initial enquiry about purchasing in the village. It is also to be provided to anybody making an enquiry on someone else’s behalf, such as a family member, friend or solicitor.
This document allows people considering going into a retirement village the opportunity to find out some basic information without having to put their name on a waiting list or pay any money to the village upfront.
Retirement Villages Disclosure Statement
The second new document is the Disclosure Statement. This document is for those who have already done their checking around and have decided on a specific village and unit within the village.
This document is required by law to be given to a prospective purchaser at least fourteen days before they can sign a contract and is far more specific than the General Inquiry Document.
It highlights some key legal obligations for both you and the village owners, such as the 7-day cooling off period applicable after signing the contract, amongst others.
It recommends that you seek independent legal and financial advice prior to signing the contract.
The document provides specific information about:
- the type of contract you will be signing
- future village development
- ownership of the village
- village services and facilities
- financial management of the village
- insurance of the village
- security and safety within the village
- dispute resolution and compliance with legislation
as well as highlighting other village documents or information you are entitled to view if you wish.
Retirement Villages Standard Retirement Village Contract
The final new document is the Standard Retirement Village Contract. Prior to this change to legislation there was no requirement for consistency in any Retirement Village contract which made it very difficult for individuals and specialists (e.g. solicitors) to be clear on what each contract meant and required.
Although retirement villages are likely to add their own clauses to the end of the standard contract, which is their right, at least the key information about entry costs, recurrent costs, repairs and maintenance, sharing of capital gains and departure fees will be clearly and consistently provided to all prospective signatories to a retirement village contract.
These changes in New South Wales are very positive and will provide more clarity and transparency when it comes to planning to move into a retirement village in that state. Retirement village contractual arrangements are still a very complex area, and signing a contract is certainly not a decision to be entered into lightly, but these legislative changes are a step in the right direction.
To see the act, go to www.legislation.nsw.gov.au.
For further support with these and other matters relating to moving into a retirement village go to www.retirementvillageinfo.com.au.
May 2013
The information retirement village residents wish they had before they bought their retirement homes.
