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Retirement Village Contracts : Do You Know What You're Signing?

Are you or someone you know considering moving into a retirement village in NSW? If so, this article is for you.

We will take you through some of the different types of retirement village ownership options available (depending on which village you are looking at moving into) and the fees and conditions you need to look out for.  Different retirement villages offer different types of ownership arrangements. This includes registered and non-registered ownership options.

NSW Retirement Village contracts and regulations are governed by the Retirement Villages Act 1999 (NSW) and the Retirement Villages Regulation 2017. These laws were created protect retirees when buying/leasing a retirement property as well as regulating the retirement operators to ensure the proper disclosure of all rules, regulations, entry costs, recurrent charges and exit fees.

The Contract

The above laws provide that the village operators are to issue a standardised contract with easy to understand terms and conditions so that retirees who are interested in living in the village can fully understand and comprehend what they are signing up to, and what their rights and the fees are if they change their mind and/or of they move out of the village or pass away.

The Contract will cover:

  • The type of ownership of the unit

  • Entry costs

  • The settling in period

  • Recurrent charges

  • Services and facilities

  • Alterations and additions

  • Repairs and maintenance

  • Your share of any capital gain / loss

  • Departure fees

The Contract must include:

  • A disclosure statement

  • A condition report

  • The village rules

  • A list of all the village services and facilities

Needless to say the contracts continue to be very complex and are large documents and it is recommended that if you are considering a retirement village then you should consult a lawyer and your financial adviser as to the risks and benefits of the contract before you sign. 

Important Clauses

All of the clauses in a retirement village contract are important, but some specific clauses which we draw your attention to and for you to consider will include clauses regarding:

  • The operators access to your unit.

  • Pets

  • The notification of changes to your health to the operator

  • Notification rules if you are going to be away for an extended period

  • Visitors

  • Sub-leasing

  • Settling in period

  • Exit charges


If you or someone you know are looking at a unit in a retirement village, you will need to understand the type of ownership that applies to the units in the village. The type of ownership your unit provides different rights and obligations.

Registered Unit Ownership

Some of the types of ownership options provide a registered interest (depending on the retirement village you are interested in) and include:

  • Owner of a lot in a strata scheme - you will become the proprietor of the unit via a sale of land contract.

  • Owner of shares in a company title scheme - If the village is owned by a company, you must buy shares of the company to become one of the owners of the scheme that owns your unit. This gives you the right to occupy the unit.

  • Owner of a lot in a community land scheme - you will become the proprietor of the unit via a sale of land contract.

  • Registered long term lease - You will be a registered lessor of the unit, for a period of 50 years or more. This is known as a leasehold interest. You will be entitled to 50% or more of the capital gain.

It is important to understand the rights that you have in relation to the unit. This will affect your ability of when and how you can sell, as well as the fee structure which will apply, including any exit fees that will apply if or when you choose to leave the village.

Unregistered Unit Ownership

  • Loan and Licence - Some retirement villages (usually those that are not-for-profit such as church or charity organised villages) offer units for loan and licence, rather than for purchase or leasehold.

    A loan and licence arrangement means you pay an ingoing contribution to the owner (usually by way of interest free loan) part of which is non refundable as a donation to the gift or charity. Regular recurrent charges will also be payable with this arrangement.

  • Rental arrangement - Just as you would lease a home or unit from a real estate agent, some retirement villages allow you to lease a unit in the usual way via a form of residential tenancy agreement.

You can find more information about Retirement Villages on the NSW Fair Trading website. NSW Fair Trading have designed a handy retirement villages calculator, which can assist you to determine all the costs and expenses that will be involved in moving into (and out of) a retirement village. If you have the disclosure statement available from the retirement village you are considering, you can try the calculator on the NSW Fair Trading retirement village calculator web page.

We understand that the above information can be very confusing and complex. We would be happy to meet with you at a time and place convenience to you to discuss any of the above, including providing you with legal advice on any prospective retirement village contract you are looking at entering into.

If you have any questions, or would like to arrange an appointment with us, contact our law firm on (02) 4444 6808 or