- Retirement villages have a range of purchase and payment models. They offer different accommodation types, facilities and services.
- Buying into a retirement village can be much more complicated than buying or selling other property.
- Get independent legal advice before signing a retirement village contract.
- There can be fees for leaving a retirement village and restrictions on how you sell your home.
- Consumers have rights under consumer law when buying into a retirement village.
- Each state and territory also has specific laws around the operation of retirement villages.
What the ACCC does
- We educate consumers and businesses about their rights and responsibilities under the Australian Consumer Law around retirement villages.
- We consider reports people make about consumer law issues in the retirement villages sector. We use those reports to inform our education, compliance and enforcement work.
What the ACCC can't do
- We don’t get involved in individual disputes about retirement villages.
- We don’t give legal advice about retirement village contracts.
- We don’t enforce the specific state and territory retirement villages laws. These laws are enforced by state and territory government agencies.
Type of accommodation, services and facilities vary
Retirement villages differ from residential aged care facilities. Aged care facilities are administered and operated under the federal government’s Aged Care laws. Retirement villages may be operated by commercial operators or charitable not-for-profit organisations.
Different retirement villages offer different types of accommodation, such as self-contained villas, semi-detached units or high-rise apartments.
Facilities and services also vary. Contracts should clearly describe the facilities and services offered and any restrictions, such as:
- communal dining and recreation
- emergency, medical and security services
- in-home support or aged care accommodation
- maintenance and gardening
- whether pets are allowed
Retirement village operators should:
- give clear, honest and complete information when advertising, and in dealings with residents and prospective residents
- give residents and prospective residents clear information about the purchase or payment model, and all applicable and optional fees and charges
- make sure agreements are easy to understand and do not include unfair terms.
Many different purchase and payment models are used
Retirement villages use a range of purchase and payment models.
Retirement village operators must not mislead consumers about fees and charges.
In some cases, residents buy their home within a retirement village. However, buying into a retirement village is often different from buying freehold or strata title property. The contract should clearly explain the payments required and whether residents are buying:
- a title or strata with restrictions on how the property can be used or sold
- a community or company title
- a unit in a unit trust.
In some purchase models, retirement village operators may require the biggest part of the payment at the end of the agreement, such as when the home is sold to another person.
Other payment models
In other models, residents don’t buy their home, but instead pay for the right to live in their home through a:
- rental agreement
- leasehold arrangement
- licence, or
- loan to the operator
- through some other payment model.
Retirement village operators may require residents to pay an upfront payment amount, bond or deposit.
On top of the main purchase or fee payment, most retirement villages charge ongoing fees. For example, there may be charges for:
- energy, water and rates
- residents' association fees.
Contracts need to clearly detail these charges and explain how and when fees may increase.
The process for leaving should be explained
The process for leaving the retirement village should be explained in the contract.
Residents may have to pay one-off or even ongoing fees after they leave, as part of the payment model for the purchase.
The contract should also explain:
- any payments the operator will make to the resident on leaving, such as returning part of the upfront payment amount or returning the bond paid
- when the payments will occur.
If residents own a title to their retirement home, their contract may restrict how, when and to whom they can sell.
The particular purchasing and payment model used may also impact the capital gains from the sale. In some contracts the village keeps all or part of the capital gain.
Get advice before signing a contract
Get independent legal advice before signing a contract.
States and territories have specific retirement villages laws which retirement village operators must comply with. Different states and territories may have different rules about:
- contract disclosure statements and cooling-off periods
- residents’ rights and retirement village operators’ responsibilities under each different purchasing and payment model.
State and territory retirement villages laws also generally include dispute resolution requirements.
Contact your state or territory consumer protection agency for more information.
Changes to your living situation can affect Centrelink or Veterans Affairs payments. It’s wise to check this before signing a contract.
Consumer rights and guarantees
Next steps if you have a problem with a retirement village
If you have a problem with your retirement village, your first step is to contact the operator and explain the issue. Your contract should have information about the operator’s process for resolving a dispute.
If the operator doesn’t resolve the problem, you should contact your state or territory consumer protection agency for assistance. State and territory government agencies enforce the specific rules for retirement villages and also the Australian Consumer Law.