DON'T be pressured into a quick decision and consult a specialist before signing any contracts, is the advice to prospective retirement village residents from peak body Council on the Ageing NSW.
"Find a solicitor who specialises in retirement village (RV) contracts and seek financial advice from an accountant or financial advisor who also has retirement village experience," said co-acting chief executive Lisa Langley.
"In RV contracts, it's not just like purchasing a house. There are always a number of ongoing fees and charges and more importantly, there are almost always substantial exit fees (or "deferred" fees) when you leave.
"Don't expect to make money when you buy into a retirement village. Expect you will likely leave with less money than you started with. This is an aspect of RV contracts on which clear, well informed independent advice is vital.
"While many retirement village residents regularly report they are happy with their circumstances, there are others who have been badly affected by disreputable or confusing practices that are not focused around residents' best interests and from residents' perspectives."
Ms Langley said that despite NSW having a standardised retirement village contract that must be used by all operators, misleading marketing from some operators and complex contracts and fee structures remain.
"We find that people are confused about retirement villages.
"Firstly, retirement villages are not the same as aged care facilities - they are not obligated to provide care, and you will pay extra for it. If you need care you also do not have to purchase from the village operator, you can buy it in from another provider.
"Secondly, most retirement village units are leased, not bought. This means people don't have the same control over the unit while living in it as if they owned it in the community; and often don't have control over sales processes later. It's a different set of arrangements which is partly why contracts tend to be much more complex and outside most residents' previous experience.
"Retirement villages can offer a relatively cheap housing alternative when compared to other options in the market on entry, but ongoing fees and complications when exiting a village can cause additional costs and unexpected and unwanted distress and anxiety."
NSW residents are currently being urged to have their say on proposed retirement village reforms.
Anyone thinking of moving into a retirement village can contact COTA NSW 02-9286-3860 regional free call 1800-449-102 www.cotansw.com.au or a COTA in their state or territory. NSW Fair Trading also has a number of fact sheets (under tenants and home owners) 13-32-20 www.fairtrading.nsw.gov.au
