Toomey Pegg's retirement village lawyers are aware of the complexities of retirement village contracts and contracts for aged care facilities and have assisted residents for over 20 years.
Retirement villages are regulated under the New South Wales Retirement Villages Act 1999 and aged care facilities are regulated under the Commonwealth Aged Care Act 1997. They are two quite different regimes and detailed knowledge is required for each kind of residential contract.
Read this if you or someone you know is considering moving to a retirement village or a residential care facility:
1. Speak to us about the issues and options.
We will do this at no charge up to 15 minutes.
2. Obtain financial advice
Before you consider selling a home to pay a retirement village ingoing contribution or an aged care refundable accommodation deposit you should consider obtaining financial advice from a specialist adviser who is experienced in this area. With retirement villages and aged care facilities offering a greater variety of financial arrangements the financial side can be quite complex. So it is important that you obtain the best financial advice on the different options that are offered. The advice will model the financial options taking into consideration any superannuation or pension issues. In one situation a couple had to fund $24,000 a year out of their capital, whereas if they had obtained advice before they sold their home, the outlay would have been only $1,000 a year.
3. Ask us to look at the contract
Once you have decided on the financial model that will be incorporated into the contract, we can then help you with signing the contract and moving in.
If you have any questions about entering into retirement village or nursing home please call us and we will be very happy to talk to you.
From time to time serious allegations are made about the conduct of staff and residents in villages. The village has a duty to investigate the complaint and to carry out the investigation in accordance with the rules of natural justice. If the investigation is not carried out, or carried out in an inappropriate manner, the village can leave itself exposed to action by the person against whom the allegation is made. We have undertaken investigations for institutional bodies and advised on appropriate action to be taken.
How much do you have to pay towards the village's legal costs when you enter into a retirement village contract?
The Retirement Village Act and Regulation say that the maximum amount that a village operator can ask a proposed resident to contribute to the "legal and other expenses incurred by the operator in connection with the preparation of a Village contract" is $50. That sounds clear. However, many village operators ask new residents to sign separate loan and service agreements in addition to the retirement village lease. Should you have to pay extra for those documents?
The decision of the Civil and Administrative Tribunal of NSW in RSL Life Care Limited -v- Lamb clarifies what should be paid. In that case the village operator tried to recover an additional amount of legal costs for preparation of a loan agreement. The Tribunal said that a lease and loan agreement are "bound up with each other" because they were prepared for the purpose of the operator granting the lease to the tenant, and therefore the costs were incurred by the operator "in connection with the preparation of" the lease, as that expression is used in the Retirement Village Act and Regulation. The same reasoning would apply where the resident is asked to pay the costs of obtaining the consent of a mortgagee, which is clearly bound up with the granting of the lease.
We had thought that this issue had been well and truly understood and accepted by the retirement village industry. However, a client of Toomey Pegg Lawyers has recently been asked by an operator to pay additional costs for a loan agreement and mortgagee costs.
If you are moving into a retirement village and are asked to pay any more than $50 for the operator's legal costs you should refer them to the above case.
What is the best way to fund an ingoing contribution?
In times past there was little flexibility as to how a potential resident could fund their entry into a retirement village. However village operators have now become more flexible in structuring entry payments. For the same unit it may be a higher ingoing contribution with a much lower departure fee (DMF) or a lower ingoing contribution with a higher departure fee. Which one you choose would depend on issues such as whether you are on a pension, your superannuation entitlements, and the value of the house you plan to sell to fund the process. With appropriate modelling it is now possible to analyse your financial situation to come up with the best financial structure to provide you with the highest possible ongoing income to preserve capital and enhance your lifestyle. Most large village operators are now agreeable to structuring the ingoing contribution and departure fee to suit your particular circumstances, leaving you in a better financial position.
If you are planning to go into a retirement village please talk to us at Toomey Pegg Lawyers before you take any significant steps.