Why You Need To Read Your Retirement Village Contract Twice
Retirement village contracts are often longer than the last novel you read. And full of legal terms that you need a dictionary for!
Who wants to read that?
And twice? No way, you say!
But this attitude what will keep you a prisoner in the retirement village of your choice. Not reading your retirement village contract twice can be a devastating decision not only for you, but for your children as well.
One of the latest horror stories we heard of is about Mike, who had to deal with a terrifying retirement village contract his mother had signed, after she passed away. He waited 8 years and went through legal hell while trying to recover her investment in the village.
When it comes to retirement villages there is the good, the bad and the ugly.
Okay, we didn’t mean to scare you off retirement villages. They are a great choice and many seniors are living their retirement happily there.
However, you need to be warned about three main issues when it comes to your retirement village contract.
First, what the management and ongoing fees are and when and how they are collected.
Managerial fees are ongoing fees that include maintenance and care. They are usually accumulated fees that you need to pay upon leaving the village. There are also annual or monthly fees that you pay for facilities. The two should not be mistaken. Many retirement village residents pay monthly maintenance fee just to discover that they own thousands of dollars in managerial fees when they decide to sell their property.
Request detailed financial statements and know what you own.
Second, who and when can sell your property.
This issue comes up at the moment when you decide to leave the retirement village if you no longer feel comfortable there.
Or even worse, your loved ones and children will need to deal with it after you are gone.
Many retirement villages do not give residents the right to sell their property themselves, keeping all advertisement and real estate services strictly in-house. This has several disadvantages including control of the sales price and limitation of finding potential buyers.
Some village managers would even refuse buyers that haven’t been found through their real estate company.
Read your retirement village contract twice and make sure you will not be restricted by such clauses.
Third, how and when you will be reimbursed if you decide to leave.
The most painful issue people report regarding retirement villages is that they need to wait for years until their property is re-sold. And some say, retirement village managers keep properties not sold intentionally, to keep the liquid cash within the village.
Make sure you read your contract, as many times as needed, to understand how long it will take before you get your investment back and if you can ever be repaid the whole amount. It is very disappointing to live your retirement years without being able to rely on your life’s savings. Yet, this is the case for many people that decide to leave a retirement village.
Buying a property in a retirement village requires knowledge of the law. You have bought a house or two before, leased property and rented flats, but a retirement village contract is different and more complicated.
Don’t leave your retirement years to luck. Read your contract twice and ask your lawyer to read it at least once.
Do you need someone to read and explain your retirement village contract?
Contact an experienced retirement village lawyer here or call us for a quick consultation at +61 (2) 9615 9635 (even if you have signed already, we can help you understand what to expect and create a plan together).