Once the kids have moved out, your once bustling home can feel empty and …a little too quiet? If you’re energetic and enjoy an opportunity for a chat or activity, what does this mean for the longer term?
Perhaps it’s time to start taking the glossy over 55s property marketing more seriously.
With so choices competing for your attention, the whole exercise can feel daunting. As with any significant life decision, a well informed decision is always the best decision.
A lifestyle community is not the same as a retirement village and vice versa. Why should this matter, and why is it important that you can differentiate between the two?
Here is what you need to know before making a decision between buying into a retirement village versus a lifestyle community.
Update 16 January 2017: note from author based on reader feedback
Please note, the purpose of this article is to help raise awareness about the importance of doing your research and seeking professional advice before making any significant investment. The legislation and contractual terms and conditions differ based on:
- which state or territory based legislation the accommodation you are considering falls under
- the type of title, license or lease that the contract binds you to
- the operator or developer you are entering into an agreement with.
This article is not claiming to be legal advice but is based on the author’s interpretation of independent research. It was intentionally written without bias toward one type of accommodation over the other.
What are the benefits of moving into an over 55s residential community or village?
If you’re keen to enjoy your later years, selling up to move into a ready-made over 55s residential community is a lifestyle choice you might want to indulge in.
Making the decision to move into a residential development designed for seniors and retirees can be an attractive option.
Over 55s accommodation is purposefully designed to enable more:
- Opportunities for leisure, socialising, sports, hobbies and holidays because costly and labour intensive property maintenance is taken care of.
- Social opportunities, events and activities – both organised and informal – within walking distance, or a shared bus ride away.
- Neighbours that share similar lifestyle aspirations. Marketing of over 55s accommodation is targeted to attract people just like you!
- Resort style facilities such as indoor heated swimming pools, bowling greens, bars, libraries and gymnasiums just to name a few.
- Security features to reassure you and your family as you age. Property developers plan over 55s villages and communities with security in mind. Security features such as well lit paths and roadways, 24 hour by 7 day a week emergency systems, security entries, mobility friendly floor plans and shared infrastructure, can be reassuring.
- Conveniently located access to shopping centres, medical centres and hospitals and public transport.
Both lifestyle communities and retirement villages offer most, if not all, of these benefits – and more.
What is the difference between a lifestyle community and a retirement village?
When you are planning to invest in the next phase of your life based on finite funds, it is essential you make well informed decisions.
Marketing of over 55s residential communities can blur which consumer protection legislation you’ll be covered by.
Understanding the differences between a retirement village and a lifestyle community (also known as lifestyle village, over 55s community or residential park), can help you avoid potential hazards.
Well sourced information and professional advice will ensure that you make the best decision to protect your future and your investment.
Differences between a retirement village and lifestyle community driven by state or territory legislation
There are a number of differences between a retirement village and a lifestyle community, in terms of legal structure; the legislation they fall under in each State or Territory; and the benefits they offer those living there.
Both Acts have certain provisions in place around the rights and responsibilities of residents and operators. This includes rules around conduct of residents and operators; contractual terms and conditions including cooling off periods and breaches of contract; maintenance of shared grounds and facilities; and rights and responsibilities when it comes time to sell.
While both Acts roughly cover similar provisions, the provisions differ significantly. The differences are driven predominantly by the type of residency you are buying in to.
Lifestyle communities are broadly governed by the same legislation that applies to mobile home and caravan park residents – legislation that is more closely aligned with a tenancy agreement.
Retirement villages are generally governed by legislation that is more closely aligned with strata title property ownership.
This means that some of the key differences between retirement village residency and lifestyle community residency is:
- In some instances you may pay stamp duty when you buy into a retirement village villa or unit depending on the title, leasehold or licence – the type of title varies according to the state or territory legislation and your individual contract with that particular retirement village.
- In a lifestyle community you own the building and pay weekly or monthly rental on the site the building sits on. For this reason, stamp duty is not applicable.
- Because you are effectively renting in a lifestyle community, you may be able to apply for rental assistance; you can’t apply for rental assistance to help cover maintenance fees in a retirement village.
- In a retirement village, depending on the contractual agreement you enter into, in some instances you may keep some or all of any capital gain, minus any deferred management fees.
So, the most important question you need to ask first when considering buying into a retirement village or lifestyle community is which state or territory consumer protection legislation you will be covered by.
Once you’re clear on your residency rights, your next challenge is to understand that each developer or operator will have a contractual agreement unique to that development.
As with signing any contract that commits you to a significant investment, make sure you understand the terms of the contract before signing.
Yes, this article is only scratching the surface. Understanding the options for over 55s accommodation is complex and can be baffling. Fortunately, quality industry operators are aware of this and are increasingly working to simplify communications, marketing and contractual terms and conditions.
Given the lifestyle rewards for those that aspire to the benefits of living in over 55s communities, investing time upfront in understanding what you’re signing up to is worthwhile.
Always, always, always seek expert advice from a legal adviser that is knowledgeable about retirement living choices.
Whatever decision you make, it is important that you fully understand what you’re signing up to, and that you are aware of your rights. Protect yourself, and you can enjoy a future free of unnecessary worry.