There are many things to consider when moving into a retirement village – price, location, availability, suitability. Here are three important things to consider in regard to laws behind the Retirement Villages Act.
You may have heard of the DMF or Deferred Management Fee.
It’s sometimes known as Departure Fee. This is a fee that is deducted from the amount received when you sell the property and leave the village. It is a capped amount, commonly calculated as a percentage of your home's value multiplied by the years you’ve been in the village.
This is paid in addition to the Weekly Fee.
The weekly fee is paid to the village operator to cover general running expenses. In Queensland, it is not allowed to increase more than the CPI. In New South Wales, any increase must be approved by residents. If there’s no agreement, the issues goes to the Consumer, Trader & Tenancy Tribunal for adjudication.
You might wonder what happens to capital gain on my village property?
This depends upon the village - it can be entirely received by you, entirely by the operator, or, in some cases, shared between you both. The nature of the arrangement often affects the size of the DMF when you sell.
There are many matters legal and otherwise to consider before joining a retirement village. And remember, while some conditions are universal, many differ from state to state.
More information is available here at villages.com.au, though residents associations in each state and from the operators themselves.