Kathryn Greiner led the NSW Government inquiry into the state’s retirement village sector – in 2017 after persistent reports of alleged misconduct. Ms Greiner who has decades of experience in the private and public sector later became an ambassador to represent the interests of residents.
The Inquiry came up with 17 recommendations, and as a result legislative changes were introduced which included a mandatory Code of Conduct for all retirement village operators, greater transparency and improved dispute resolution.
On the plus side, retirement village living offers camaraderie, a sense of the community, activities and engagement in the local community. The financial advantage is that it’s good for people who don’t have a lot of capital.
However, Ms Greiner strongly advises you get good legal and financial advice, to shop around and visit as many villages as you can and ideally talk to residents. Make a check list to ensure the village meets your needs and suits you. You will receive marketing information, and if you interested in leasing a place in the village you will be given a copy of the contract. You must go through it very carefully with a lawyer experienced in retirement village contracts, an accountant and your family.
Ms Greiner explains that in around 90% of cases you lease your accommodation unit in the village, rather than purchase it. You therefore pay a lump sum up front, and a fortnightly or monthly maintenance fees for services and facilities. She explains a retirement village unit is a real estate deal wrapped up on a blanket of care and potential buyers need to approach it as such. It’s important to know that retirement villages are not aged care facilities so it’s important to consider whether the village will meet your future care needs.
Also, be aware you put up capital for the lease, but you don’t get it all back in the situation of moving to aged care. There is often an exit fee, called a deferred management fee, and you don’t get all of the capital gains on the increase in the value of your unit. You also need to factor in the maintenance fees that go towards staffing and facilities costs.
While retirement villages are often marketed to over 55s, the average age of entry is 70. Ms Greiner suggests it’s good to see it as your last move, except to an aged care facility. She also suggests when you move into a retirement village, ask if they are pet free or pet friendly.
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