The first place to start is to understand what a retirement village actually is.
It isn’t aged care. It isn’t an over 50’s or lifestyle community. And it certainly isn’t a property investment.
A retirement village is a community of independent living residences occupied by older, mostly retired people. In addition to the homes, villages may offer community facilities such as a club house, activities & craft rooms, gyms, pools, bowling greens and a café. Most villages are staffed with management and administration personnel, maintenance, grounds and cleaners, while some villages may also employ care staff such as personal carers or nurses.
Villages typically have minimum age limits, usually around 60-65 years, placed on incoming residents to ensure that the community is all largely at the same “age and stage” of life. The average entry age of residents into retirement villages is currently mid to late 70’s, trending towards late 70’s over the last decade as people delay the decision to downsize or move. Retirement villages are able to discriminate based on age under the retirement villages legislation, but they typically won’t directly state that you are too young or too old.
Retirement villages operate under the Retirement Villages legislation in each state or territory, and typically comes under the umbrella of the state property legislation. While the legislation is mostly similar across the country, if you are considering your options in various states you will see some differences, mostly around the residence contract documentation.
Retirement villages are independent living. This means that residents are expected to be able to live independently. This is different to aged care, where residents require significant levels of care or supervision for daily living tasks. Retirement villages may actually refuse entry to prospective residents they believe may not be able to live independently. It is, however, perfectly acceptable for residents to be considered as living independently, even if they require the support of a spouse, family or in-home care services such as cleaning, meals and domestic assistance. Retirement villages do not want residents who cannot maintain a clean unit, do not have regular sustaining meals, become shut-in and do not socialise, or who have behaviours that impact on fellow residents.
Retirement villages have a very unique business model: In a retirement village, you essentially buy a “right to occupy” in the form of a perpetual (or very long term) lease or licence, while freehold ownership remains with the village owner. You pay an ingoing contribution for the lease or licence (similar to a bond) which is refunded when you leave and the right to occupy is re-sold, following the deduction of agreed fees and charges. You can learn more about the tenure in retirement villages HERE and HERE. While you are in residence, you pay a village fee to cover the costs of running and maintaining the village. You can do a deep dive into village fees HERE.
Even though you may have bought and sold property previously, a retirement village contract is very different and in most cases it is well worth getting legal advice from a specialist solicitor. It is also worth considering if a retirement village is actually the best move for you.