o you’ve decided to move into a retirement village? 5 legal matters you may need to sort out
Moving into a retirement village is often talked about as one decision: choosing the village and choosing the unit.
But from a legal point of view, there are usually several things happening at the same time.
There is the Occupation Right Agreement, which is the main village document. There may be the sale of the family home. There may be Wills and Enduring Powers of Attorney that need updating, or entirely new documents if none currently exist. And sometimes there is a family trust sitting in the background as well.
Because of all of these moving parts, it is a good idea to start speaking with your lawyer as early in the process as possible.
1. Occupation Right Agreement
There is a lot of paperwork to go through.
Getting independent advice on your Occupation Right Agreement is important because it is not the same as buying a normal house. It gives you the right to live in the unit, but the terms of that right are set out in the agreement.
The ORA deals with things like how much you pay to secure the occupation licence, what your weekly fees will be, the village rules, your obligations, the village’s obligations, how you get your money back, when you get it back, how much you get back, and what happens if you lose capacity, leave the village, or die.
When you sign your application form and pay a deposit to secure your new home, you will sometimes receive a Disclosure Statement and other disclosure documents. If you do not receive them directly from the village sales person, your lawyer will receive a copy and share those documents with you.
Those documents give information about how the village operates, how to access its financial statements, how many units, apartments or other homes are available for occupation, and how long it has taken for units to be re-licensed. It also includes what your obligations and rights are, what the villages obligations to you are and how to deal with disputes (if they arise).
Because the documents are significant, the financial commitment is usually large, getting your money back can take time, and the arrangement is different from ordinary home ownership, the law requires intending residents to receive independent legal advice before signing an Occupation Right Agreement.
2. Selling your property
For many people, moving into a village also means selling the family home.
That brings in timing issues, settlement dates, title issues, and questions about how the sale lines up with the village move.
This is where the process can become more involved than people expect. It is not unusual for people to focus on the village unit and then realise the sale of the family home has its own legal issues and timing pressures.
If the home is owned by a trust, or if one owner has lost capacity, or if the title has issues that need sorting before sale, you do not want to be finding that out at the last minute.
3. Your Will
A requirement of moving into a retirement village is often to have a current Will.
If you do not have one, this is the time to put one in place. If you already have a Will, it is worth checking whether it still meets your needs.
The move may impact on what you own and how your assets look. The family home may be sold. Your asset ownership may have changed - or needs to change to suit your new circumstances. The people you appointed years ago may no longer be the right people. If you're unsure about any aspect of your Will or estate planning, your lawyer can guide you through.
4. Enduring Powers of Attorney
You will usually be required to have a current set of Enduring Powers of Attorney before moving into the retirement village: one for Property and one for Personal Care and Welfare.
If you already have EPAs, check whether the attorneys you appointed are still the right people. Relationships change. People move away. Adult children may have different availability. The person who was the obvious choice years ago may not be the best choice now.
EPA documents have also changed a lot over the last two decades. They now require more thought and detail than many older documents. Your lawyer will talk with you about your options, who you trust to act for you, and what matters most to you, so you can put documents in place that you are comfortable with.
5. Family trusts
If there is a family trust involved, that needs to be looked at carefully too.
Many villages require individuals to enter into the Occupation Right Agreement in their own names. So if trust funds are being used, the trustees need to consider how to deal with that payment. Is it a distribution? Is it a loan? Does the trust deed allow the distribution/loan? How will it be recorded? And more broadly, is the trust still relevant and doing what it needs to do? That is a whole topic on its own, and I have written more about whether your family trust still works.
Start earlier than you think
These things take a bit of time.
You do not want to put unnecessary pressure on yourself by leaving everything until the last minute.
Moving into a retirement village is a good time to review everything together: the village documents, the sale of your home, your Will, your EPAs, and your family trust.
It can feel overwhelming, but it is much easier if you start early. The process can take several months from start to finish, and a good lawyer can help you work through the important pieces in the right order.
That way, what matters most to you is covered off properly, and you can get on with enjoying your new retirement village lifestyle.
If you are thinking about moving into a retirement village and would like help working through the legal side, please get in touch or make a time to meet.