How a retirement village operator is changing contracts to address a major concern

For a lot of older Australians looking at moving to a retirement village, contracts can be one of the most challenging issues.

A lot of retirees have expressed concerns about charges and fees, particularly exit fees – which can be as much as 40% of the purchase price.

To try and address those concerns, one retirement village operator has begun trialling a new contract, which it claims removes the uncertainty about fees and charges.

RetireAustralia, who operate dozens of retirement villages across the country, developed the contract following feedback from residents and prospective residents.

So, what makes the contract so different?

Well, it removes a number of fees and charges – including refurbishment fees, sales commission or marketing fees and capital losses/gains.

The new contract also caps the three year exit fee at 35% of the purchase price and fixes monthly fees for the duration of your life at the village.

RetireAustralia CEO Alison Quinn said the contract was about “eliminating uncertainty and hassle” to provide residents with the “best possible experience”.

“Our new contract addresses common areas of concern in retirement village contracts across the industry and ensures that residents and their family members know exactly how much they are required to pay and how much they will receive after they leave,” she said.

The RetireAustralia website lists some of the benefits of the new contracts, claiming it allows people moving into a retirement village to work out exactly how much money they will get when they move out.

“We guarantee that your village fees will be fixed upon entry and will not increase while you’re living in the unit,” the website reads.

“This means you can confidently plan holidays, hobbies and other expenses around a fixed monthly cost.”

It also outlines the benefits for you by dropping some of the fees and charges.

“We will prepare your unit for sale at no cost to you (except in circumstances of exceptional wear and tear) and our professional sales and marketing team will sell it in the shortest possible timeframe without charging any fees,” the website reads.

“After your unit is on the market for a certain period of time, we’ll reduce your village fees, and if we haven’t sold your unit within a set timeframe, we’ll buy it back from you.”

The change has been well supported, with the Association of Queensland Retirement Village Residents backing the new contract.

Do you think there should be more changes to retirement village contracts?