Attwood Marshall Lawyers, Wills & Estates Lawyer, Emily Edmonds, discusses Retirement Village Agreements and the importance of having a lawyer look over the contract before you sign the dotted line.
It can be tempting to enter into a Nursing Home or Retirement Village Agreement without having a lawyer review and advise on the content beforehand. People often think this advice is unnecessary or decide against getting advice in order to save time or money. However, not seeking legal advice before entering into one of these agreements can result in spending a lot more money than what you would have paid to get the right advice in the first place. Retirement Village Agreements are usually quite complex and many people find them to be confusing. Without getting help from a solicitor experienced in these agreements, you will be vulnerable to hidden costs and rules you may not fully understand.
What is the difference between nursing homes and retirement villages?
There are a few different types of facilities that someone can move into when living at home no longer suits them. There can be a number of different names used to refer to the same type of facility, but the two main ones are nursing homes and retirement villages.
Generally, a nursing home is a facility that provides a higher level of care for someone once they reach a certain stage in their life where they need assistance with looking after themselves. This can include help with feeding and personal care. When entering these facilities, a bond may be payable, which is usually fully refundable.
How is a retirement village different to a nursing home?
A retirement village is an assisted living community for seniors. These villages provide different levels of care. The types of care available to residents can include:
- Low care: which is independent living, and you have just your meals and laundry services provided;
- Mid to high levels of care: where additional services are provided such as medication management and personal care.
Retirement villages usually offer social and recreational activities to their residents.
Attwood Marshall Lawyers mostly deal with Retirement Village Agreements and have many clients who love living in these villages. Before choosing the most suitable facility and living arrangement, it is important to make the appropriate enquiries with both types of facilities.
What should you do if you would like to move into a retirement village?
If someone is interested in moving into a retirement village, they need to inspect the property multiple times. It’s a good idea to have a look at all the available facilities in your area so that you can compare them and work out what you like and what you don’t like.
Once you have decided which facility you want to move into, you can communicate your interest to the facility manager. It’s at this time that you should be provided with some preliminary documents such as a Disclosure Statement and facility information brochures about the village and what your life there could be like.
From there, contact should be made with a lawyer so that you can discuss the process and understand what to expect moving forward.
What is the process after choosing a retirement village?
- Step 1: The facility will have their solicitor provide you with a village contract or agreement.
- Step 2: It’s at this stage you should have your lawyer take over the matter on your behalf.
- Step 3: Your lawyer will thoroughly review the agreement, looking at fees payable upon entry, exit fees, and the main rules – including those regarding pets.
- Step 4: Your lawyer will then write a letter of advice based on the agreement.
- Step 5: Sit down with your lawyer to run through the agreement and discuss anything you are unsure of, and if required, re-negotiate any terms of the agreement as needed, before signing.
With the help of your solicitor, you can ensure that you are making an informed decision about the facility of your choice prior to signing the agreement.
How detailed can Retirement Village Agreements be?
These agreements can be a very detailed contract which is why it is important for a lawyer to review them. They can be quite overwhelming as they’re usually over one hundred pages long and they set out everything from the costs involved, to your entry and exit of the facility. They also cover the village rules that you must abide by during your time living there.
What are some examples of rules which may be outlined in the agreement?
Most retirement villages have a list of rules that all residents need to follow. These cover things like whether you’re allowed to have pets and if so, what kind. Other rules may include the sorts of things you can add to your room, such as hanging paintings on the walls, or expectations in relation to any visitors you may have when living in the village and time-frames around visiting hours.
It’s important to be familiar with these rules because if you are not, you can find yourself in a position where you’ve broken rules without even realising it. For serious breaches of the rules, your agreement may be terminated, and you could be asked to leave the village.
What can happen if you don’t have a Lawyer check the fine print of an agreement?
If you don’t receive legal advice on a Retirement Village Agreement, you risk missing vital information which could lead to a situation where you’re legally bound by an agreement that you’re not happy with. That can cause a lot of emotional and financial stress.
An example of a resident being unhappy with their Retirement Agreement:
We recently had a retirement village resident come to us who wanted to move out of a village after she’d been living there for approximately 18 months. When the resident told the retirement village of her intention to leave, she ended up with an exit fee of around $150,000.00 that she was obligated to pay. This was on top of the weekly fees she had already paid during her stay.
If the resident had have received legal advice before signing the agreement and moving into the village, this fee wouldn’t have come as a surprise. The stress and anxiety that she experienced as a result of this shock bill could have been avoided.
What happens once the agreement is signed?
Once the agreement has been signed, it is then sent back to the solicitor acting on behalf of the village. The agreement will then be checked and if everything is in order, arrangements are made to settle the matter – which is much like the settlement of a conveyancing matter. This usually involves liaising with the solicitor acting for the village, and most people will have a sale of their current property that needs to be coordinated as well.
Juggling these matters may sound like a lot of work, but it’s something that lawyers are experienced in, and are able to take care of to ensure a smooth transition to retirement living.
Does a Retirement Village Agreement affect other elements of general estate planning, such as a Will?
The agreement won’t affect your Will as such, but entering into a Retirement Village Agreement can definitely affect your estate. This is because when you enter into a Retirement Village, you usually sell your home to fund your entry fee and then if you decide to move out of the village or you pass away, the village will take an exit fee. This can be around 35% of what you paid to enter the village, plus any other refurbishment and administration costs on top of that.
This is a really significant amount. The result is that the value of your estate can be greatly diminished – that’s why it’s so important that you and your family understand the Retirement Village Agreement properly before signing it.
How can Attwood Marshall Lawyers help?
As an essential business unaffected by the lock-down directives, we remain open for business. We continue to provide our legal services to the same exceptional standards. Our offices are located at Kingscliff, Coolangatta, Robina Town Centre and Brisbane. Our 24/7 phone line is 1800 621 071.