Buying into a retirement village is different from buying other residential property. The financial structures and legal titles can vary from village to village, so it’s important to talk to your lawyer so that you understand their implications.

Get independent legal advice before you sign up with a retirement village. You are required to do this by the Act. Find a lawyer with experience in retirement villages, who is independent of the village you’re thinking about. If your lawyer doesn’t have this experience, ask them or go to the Law Society to find a lawyer experienced in retirement villages.

Legal titles
There are four basic legal titles commonly used for retirement villages:
• Licence to occupy
• Unit title
• Cross lease
• Lease for life

Some villages combine the features of ‘licence to occupy’ with ‘unit title’ to create their own type of title. The Act requires all legal titles to include a ‘memorial’ that protects a resident’s interest in their unit and helps to ensure the village’s continued operation.

Licence to occupy
A licence to occupy gives you the right to live in the unit, but it doesn’t mean you own the unit. This usually means that you can’t borrow against the value of your unit, though some villages may offer this option.

Unit title
In a village based on a unit title structure, you own your own unit. You also become a member of a body corporate that is responsible for the upkeep and maintenance of communal areas. Often the body corporate has a management agreement with the village manager (who is responsible for looking after the day-to-day operation of the village) to administer and look after the affairs of the body corporate.

Cross lease
If you have a cross lease, you share ownership of the land and its units, and grant leases to one another to live there. The leases include agreement about the length of the lease, the use of the land, and the residents’ rights to live there.

Lease for life
In this case, you have a lease for a unit or property in the village, which remains in place until you die or leave the village. Some villages also offer rental units.

Why not schedule a meeting with a Financial Adviser today?
Disclaimer – Information current as at 12 November 2015 – This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.

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