What to Look for in a Retirement Village Lease

Choosing the right retirement village is about more than just location and lifestyle — it’s also about understanding the lease you’re signing.Retirement village leases can vary greatly in terms, costs, and obligations. Knowing what to look for will help you make an informed decision and avoid unexpected surprises.

Understanding Retirement Village Leases

A retirement village lease is a legal agreement that sets out your rights and responsibilities as a resident. It covers how you can live in the village, what you’ll pay, and what happens if you leave.

Unlike buying a standard home, you are often purchasing the right to occupy rather than owning the property outright.This is why it’s important to carefully review the details before committing.

Key Things to Check in the Lease

1. Type of Agreement

Common agreement types include:

• Leasehold – You pay for the right to occupy for a set period, often 99 years.
• Licence – You have permission to occupy but do not own any legal interest in the property.
• Strata title – You own the unit but share common facilities with other residents.

Each type comes with different rights, resale processes, and fees.

2. Entry Fees

Check how much you’ll need to pay upfront. This can include a purchase price or an entry contribution.Understand how this fee is calculated and whether it’s refundable when you leave.

3. Ongoing Costs

Retirement villages often charge weekly or monthly fees for services and maintenance.Review what’s included — such as gardening, security, and community facilities — and whether these costs can increase over time.

4. Exit Fees (Deferred Management Fees)

Many villages charge a fee when you leave, calculated as a percentage of your entry payment for each year you live there.Know exactly how much this could cost and how it affects the refund you or your estate will receive.

5. Capital Gains and Losses

Some leases allow you to share in capital gains if the property value rises, while others do not.Similarly, you may bear some responsibility for losses.

6. Refurbishment and Repairs

Check whether you’ll be required to pay for refurbishments or repairs when you leave, and how these costs are calculated.

7. Services and Facilities

Make sure the lease clearly lists all services and facilities you can access, such as:

• Medical or health support
• Community centres and recreation areas
• Security and emergency systems

Seeking Independent Advice

Before signing, always get legal advice from a solicitor experienced in retirement village contracts.They can explain the fine print and ensure you fully understand your financial and lifestyle commitments.

Making the Right Choice

A retirement village lease is a long-term commitment that can shape your lifestyle and finances for years to come.By carefully reviewing the terms, understanding the costs, and getting professional advice, you can choose a community that truly suits your needs.