There are two main types of retirement village schemes. The first is where residents buy a unit at current market value and receive a certificate of title. The second is based on a lease or licence arrangement, where residents pay the equivalent of the current market value of a unit to the village developer in return for a lease on the unit, usually for life.
The amount residents or their estates receive on departure from the retirement village can vary. Some villages allow the whole of the capital gain on resale, others allow a share of the capital gain, and others allow no capital gain at all.
Would-be residents must be provided with documentation about the village 21 days before signing a contract. The documentation must include:
- The name, location and ownership of the village
- The village by-laws
- A residence and management contract
- A checklist of important questions to consider before entering a village
Once a contract has been signed a three-day cooling-off period is available. You should seek legal advice about the terms and conditions of the residence contract before signing.