A residence contract is a legal agreement between the resident and the retirement village operator.
It contains information about the resident's right to live in the retirement village and both parties' rights and responsibilities.
By law, an operator must register the retirement village scheme before entering into a contract. Residence contracts for unregistered village schemes are invalid and can be terminated.
Before you sign a contract, ensure the operator has given you a copy of the village´s public information document.
Purpose of the contract
The contract gives the resident the right to live in a village unit, use shared facilities and access services. It also restricts how the resident's right to reside can be sold or transferred.
By law, the residence contract must contain certain information, including:
- the start and end dates of the cooling-off period
- the resident's right to withdraw the contract before the cooling-off period ends
- the ingoing contribution amount (the one-off amount a resident pays to secure their right to live in a retirement village)
- the general services charges (the charges a resident pays for general services such as management, administration, garden, maintenance and recreation) and the dates they are due
- the personal services charge (the charge a resident pays for optional personal services, such as laundry, meals and cleaning) and the dates they are due
- the maintenance reserve fund amounts (the amounts of general services charges that residents pay for village maintenance and repair) and the dates they are due
- any relevant statutory charge
- insurance details
- the exit fee amount (the amount residents may pay or credit the operator when their unit is sold)
- any conditions on a resident's right to live in the village
- a residents' exit entitlements (the amount an operator must pay or credit the resident when their unit is sold)
- whether can re-sell their right to live in the unit
- the resident's right to see the village´s financial statements
- the dispute resolution process
- the operator´s and resident's rights to terminate the contract.
Other information required
When a resident signs a contract, the operator must immediately give them a document containing:
- a signed copy of the residence contract
- the public information document, if the resident has not already received it
- an unsigned copy of any additional contract that forms part of the contract, such as a lease or loan agreement.
Once a resident signs a residence contract, they have 14 days to withdraw it without penalty. This is called a cooling-off period.
If the cooling-off period´s end date changes, due to another contract or event, the operator must tell the resident, in writing, within 14 days of the resident signing the other contract or the event occurring.