Retirement villages – some questions to ask before signing
The ARQRV suggests that prospective residents considering a retirement village (lease, loan/licence or freehold) should ask the questions outlined below before signing a contract.
Written answers to these questions could prevent disputes in the future. Retirement village contracts are unfortunately long, complex documents, and verbal assurance by the sales person that the contract answers the questions outlined below, should not be accepted. Written answers giving the contract clauses applicable to each question should be supplied to the prospective resident.
Be aware that the sales person may not be able to answer the following questions, but will be able to obtain written answers to them from the scheme operator:
- Who pays for repairs and replacements in my unit?
- Who gets the capital gains on my unit when I leave?
- When my unit is sold how soon will I be paid out?
- How is the exit fee or deferred management fee (if applicable) calculated in this retirement village?
- What fees did the residents pay in the previous three years, and how do they compare with the current charge?
- If the unit sells for less than the purchase price am I liable to pay for this loss?
Most of the above points will be addressed by the Public Information Document (PID) which must be given to an intending resident when paying their initial refundable deposit.