Law Talks Episode: Thinking about moving into a retirement village? What you’re really signing up for

Robyn: Good morning and welcome to another edition of law talks here on 4CRB. Queensland is one of Australia’s retirement capitals with huge growth in lifestyle villages, aged care style villages, land lease communities and hybrid models.

Many people don’t understand that retirement villages are not traditional property purchases. The contracts are complex and very different. Moving in is a major life and financial decision that can affect your estate plan, future accommodation options and aged care planning. To find out more about the key considerations when looking at retirement village living, we are joined by Senior Associate and Accredited Aged Care Professional, Larisa Kapur from Atwood Marshall Lawyers. Thanks for joining us.

Larisa: Thank you for having me.

Robyn: Well, not all retirement villages are the same, and what are the key differences you can tell us about?

Larisa: Absolutely. It’s something a lot of people don’t realise.

In Queensland there are a few main types of retirement village structures, let’s say. So there is the traditional retirement villages which are what most people picture. You buy or lease a unit and get access to great community facilities like clubhouses and you know, great social activities. They’re mostly for independent living.

Then we have the lifestyle resorts style, which are essentially retirement villages, but feel more like holiday communities for retirees and these are gaining a lot of popularity. So, think golf, gyms, pools and lots of social events. It’s all about the activities and social lifestyle.

So, some of the retirement villages are aged care integrated villages for those wanting a long-term plan which allow you to transition from independent living to, you know, some care provided. So, they provide a continuum of care from independent living right through to full residential aged care. You’d have to check with the retirement village if they do offer that service.

Then we also have land lease or manufactured home communities and these are a little bit different. So you essentially own your own home, but you rent the land or lease the land. These are often smaller, more affordable and give residents a lot of independence.

You’re generally responsible for your own maintenance. So, choosing the right village comes down to your lifestyle, health and how much support you might need now, or perhaps in the future.

Each type has its own advantages. It’s just about finding the right fit for you.

Robyn: Yeah. Now the biggest legal misconception is that people are buying real estate. What can you tell us about that?

Larisa: That’s actually one of the biggest legal misconceptions about retirement villages, Robyn. So in most cases, when you enter a retirement village in Queensland, you’re not buying the property itself. You’re usually buying the right to occupy a unit or home under a legally regulated agreement.

So, for example, in the traditional retirement village, you might pay an upfront entry contribution and sign an occupancy contract that gives you the right to live in the unit for the rest of your life, or until you decide to leave or whatever the terms might be. It might be a 99 year lease or something like that. But the land and building usually remain owned by the village operator. So it’s different from a typical home purchase because you can’t generally sell the property on the open market, you have to sell or exit according to the village’s rules or that contract that you’ve signed entering. There are often ongoing fees, like recurring charges for maintenance, amenities and services that you pay to the operator directly, and the contract may include restrictions like who can live there, renovations you can make, or even rules about, you know, pets.

So legally, what you’re buying is access, lifestyle and a community, not a traditional piece of real estate.

That’s why it’s important to read the contract carefully and get advice before signing. Because the rights and obligations can be very different from buying a house or apartment.

Robyn: Sure. So, what are some of the financial traps people don’t realise when looking at retirement village living?

Larisa: So retirement villages can be great, but there are some costs and rules that catch people off guard, if they don’t look carefully, especially when you’re going in. So in your contract, it’s important to review what you’re signing because firstly there’s exit or departure fees. Many villages charge a fee when you leave, often a percentage of your entry contribution. Some people assume they’ll get most of what they paid, but that’s not always the case.

Second, you know there’s recurrent or ongoing fees, so beyond the entry contribution, the person going in usually will pay a weekly or monthly fee for maintenance, gardens, securities and amenities and so forth. These fees can increase over time, sometimes significantly and often tied to inflation or village expenses, which can creep up.

Third, you got to think about the refurbishment or reinstatement costs. So, when you leave or you might be required to restore your unit to the condition it was in when you moved in. That can include, you know, painting, replacing carpets or other repairs, all at your cost.

Fourth, the unclear contracts on capital gains, for example, unlike normal property, you don’t own the real estate. So if a village value goes up, you generally don’t benefit from that increase. A lot of people don’t realise that when selling or leaving.

And finally, there’s limited exit options, so some contracts require the operator to find a new resident before you can leave, which can delay your ability to move or access your funds.

The key takeaway from this is, Robyn, a retirement village really is a long-term financial commitment and I guess the costs aren’t always obvious.

So always read the contract carefully, ask about fees and exit conditions and get independent legal and financial advice before signing anything.

Robyn: Yeah, Larisa, I think I know the answer to this, but why is legal advice essential when signing a retirement village agreement?

Larisa: Legal advice is absolutely essential, because retirement village contracts are very different from ordinary property contracts.

I mean, when you move into a village, you’re not buying the real estate, you’re entering a legally binding agreement that governs your rights, responsibilities, and your financial contributions.

So, a lawyer can certainly help you with understanding what you’re actually buying or signing or entering into.

So many people assume they’re purchasing a home, but legally you’re often buying the right to occupy the unit under very strict terms. Lawyers can also help identify hidden fees or exit costs, which can be ongoing fees, departure fees, refurbishment obligations and any other financial traps that could affect your savings or what you think you might be getting back. Also, you know we can help spot unfair, unusual contractual terms. Which some agreements have clauses that limit your rights, restricting what you can do with the property or affect your ability to even leave. So you know, get that checked, I’d say. But ultimately, a lawyer can protect your long-term interests, and this just means that you know, a lawyer can ensure that the agreement reflects your needs now and, in the future, especially if your health or care needs change, which you know we can’t predict. So, it’s important to know what happens in that instance.

In short, Robyn, retirement village agreement is complex and can have lifelong financial and legal consequences. So, getting legal advice before you sign is the only way to make sure you truly understand what you’re actually committing to.

Robyn: Yeah, these contracts are so comprehensive and so complex. So, what are the top five questions people should be asking a lawyer before signing anything?

Larisa: This is a good one because the top five that come to mind for me are, ask am I really buying property or is it just the right to occupy, so it’s crucial to understand the legal nature of the contract because in most cases you’re not actually buying real estate as we’ve mentioned.

Robyn: So you’re not actually getting an asset when you pay that money?

Larisa: No, you’re getting the right to live there.

So number two, ask you know, what are all the fees now and in the future? So ask about entry contributions, ongoing fees and exit and departure fees and whether they can increase over time.

Three, I would ask what happens when I leave or pass away, so make sure you understand how your money is returned, who can live in your unit, and any refurbishment obligations that may be applicable at that time.

Four, I would ask, are there any restrictions I should know about? This includes rules on pets, renovations, sub leasing or even who can visit or live with you.

And lastly, I would say what happens if my care needs change? So, if you need higher level care, make sure the village can support you and understand any additional costs or transfers that may be applicable at that time.

So I guess the key point is don’t sign anything until you get proper advice from a lawyer. You’ve gone through the contract and yeah, that that’s very important to note.

Robyn: So Larisa, just on that point you made, what happens if someone’s care needs do change?

Larisa: That really depends on the type of village they’re in. In a traditional retirement village, which is mostly for independent living, residents may need to move out if they require higher level care because on site medical support just isn’t available.

That can be stressful and you know expensive if a transfer is needed quickly. In aged care integrated villages there is that continuing of care and that means that they can provide additional support if needed from low level assistance with daily activities right through to full time aged care or dementia care in some cases.

So, residents can often stay within the same village as their care needs increase which provides peace of mind for both them and their families.

So, I guess the key point is before signing, it’s crucial to understand what level of care the village can provide, how fees may change if that more care is required, and what options exist if you need that higher level support. So legal advice is essential here, because these terms are spelled out in the contract and can have long term financial and lifestyle impacts.

Robyn: Larisa, what’s your final takeaway for anyone looking to move into a retirement village in 2026?

Larisa: Well, my biggest takeaway would be do your homework before you sign anything. Research around to make sure you found the right fit. Retirement villages are not just property purchases, they’re long-term lifestyle and financial commitments. So you have to make sure that you understand the type of village, whether it’s independent living or a lifestyle type of resort, or an aged care integrated community. Know the financial implications, plan for your future, so check what happens if your health or care needs change while you’re living there, and please get legal advice. Get a lawyer to explain your rights and obligations and help you avoid any hidden traps.

So ultimately the right village can offer an incredible lifestyle, community and peace of mind, but getting clear professional advice upfront is what’s going to protect both your wellbeing and your savings in the years ahead.

Robyn: Yeah. Larisa, thank you for shedding light on what is possibly the most complex contract that you will be ever likely to sign.

Larisa: Yes it is.

Robyn: Thanks for your time today.

Larisa: Thank you.

Robyn: You’ve been listening to law talks here on 4CRB which you can hear every Friday morning from 9 o’clock.