Purchasing An Interest In A Retirement Village: What You Need To Know

Purchasing an interest in a retirement village is not like purchasing a residential property. There is an ongoing relationship between the village operator and the resident which is governed by the terms and conditions set out in what is called an "Occupation Right Agreement".

The Occupation Right Agreement must comply with the provisions of the Retirement Villages Act, the regulations and Code of Practice.

There are many matters to consider in addition to feeling comfortable and happy with the unit. For example, you will need to consider what "legal interest" you are purchasing. It may be a licence to occupy, a unit title, a cross lease or a lease for life. The most common form is the licence to occupy which grants the resident the right to live in the unit. Ownership of the unit remains with the village operator and the resident is unable to use the licence as security for a bank loan.

You should also consider whether you are likely to need an increased level of care in the future. Many villages are marketed as "lifestyle villages" and do not have rest home and/or hospital facilities. For a husband and wife, this may mean being separated if one requires a higher level of care that is unable to be provided at the village.

The Retirement Villages Act requires prospective residents to receive independent legal advice before entering an occupation right agreement.

Our residential team specialises in the retirement village area. We can access the legal documentation for any village in the country online and give you simple and thorough advice in relation to your purchase before you sign up.

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