PARADOXICALLY, as a person grows older some decisions appear to become more complex and the decision to enter into a retirement facility requires careful consideration of the financial and legal implications.
On a positive note, from July 1, there will be changes to the level of disclosure required by operators of retirement villages before potential residents enter into any contractual arrangements for retirement village living.
The Retirement Villages Amendment (Records and Notices) Regulation 2013 and Retirement Villages (Contractual Arrangements) Regulation 2013 will require retirement village operators to:
provide an information fact sheet to prospective residents to allow them to better compare the financial benefits of a particular retirement village;
allow prospective residents to inspect particular documents regarding the retirement village;
provide extended pre-contractual disclosure information to prospective residents; and
use standardised content and layout in contractual documents to make them easier to understand and for comparative purposes.
The prescribed information to be included in the fact sheet to be provided to the prospective resident is similar to the information that landlords are currently required to provide to prospective tenants under the Retail Leases Act.
They contain an overview of the services and facilities available at the retirement village, the estimated ongoing financial obligations for prospective residents and the entitlements upon departure from the retirement village.
The documents to which prospective residents will have access include site plans, planning permissions for future development, annual reports and statements regarding capital works or maintenance funds.
Retirement village contracts will also need to include prescribed information which must be included.
There is also provision for information that cannot be included in retirement village contracts.
For example, it will no longer be acceptable for a restriction to be placed on a residence's absence from a retirement village, unless the length of such absence is such that it would mean that the retirement village was not the resident's principal place of residence.
Together with the increased disclosure obligations, the amendments to the Retirement Villages Act also create an onus for the retirement village operator to ensure that the prospective resident is made aware of their rights pursuant to the amendments.
While it is anticipated that the fact sheet and disclosure statement will help inform prospective residents about the financial obligations associated with retirement village living, it is still recommended that prospective residents seek legal and financial advice before entering into a retirement village contract.
Disclaimer: Readers should seek independent legal advice as this article is for information purposes only. Kim Packer is an associate at Beck Legal, Bendigo.