What are the laws that govern retirement villages and are residents protected?
Villages have been operating in Australia for over 50 years and every state and territory has regulations and laws in place covering their operation.
In most cases, the Retirement Village Act is the dominant piece of law.
It has grown out of the fact that joining a retirement village is a property transaction that is similar to entering a lease to occupy a home.
This means the contract and the rules and regulations mostly relate to the rights and responsibilities of the operator who owns the land and buildings, and the village resident who is the tenant paying for the right to be in the village.
At the basic level a retirement village resident has the same rights as anyone who leases a home. If there is an issue you can go to Consumer Affairs and seek arbitration and ultimately go to a Tribunal and even the courts.
But special to retirement villages has been the growth of additional regulations, particularly around the cost of maintenance and budgets similar to a body corporate in an apartment building.
For instance, residents have to approve the operating and maintenance budgets each year and the operator is not allowed to make a profit out of these expenses.
Is the money you pay upfront safe? For church and charity village operators in most cases, you are providing a loan to them. You have to be confident that they will repay it when you leave.
Most private operators provide you with a registered lease in return for your payment, guaranteeing your home and they need to pay you out at a contracted rate to get the lease back when you leave.
It does require an element of faith that the operator will maintain the village well enough to be able to attract new tenants at the right price.
If they don’t they don’t get their DMF fee when you leave.
The retirement village laws are designed to support to age well.