Northern Territory

1. Legislation

Retirement villages in the Northern Territory are regulated by specific legislation, being the:

• Retirement Villages Act 1995 (NT); and
• Retirement Villages Regulations 1995 (NT), which contains the Retirement Villages Code of Practice 1995 (NT) (the Code).

Under this legislation, the land comprising each retirement village must be noted on the land registry maintained by the Registrar-General as being used as a retirement village. You should check that the land comprising any village you are considering moving into is noted on that register as being used as a retirement village.

The retirement villages legislation applies to:

• residents, prospective residents and former residents of retirement villages; and
• the owners and operators of retirement villages (referred to in the legislation as administering authorities).

Retirement villages with 'freehold' title (see Item 3) are also regulated under the Unit Titles Act 1975-1976 (NT) (UTA).

The federal fair trading legislation, the Competition and Consumer Act 2010 (Cth), also applies to retirement villages in the Northern Territory.

The above legislation is available at www.dcm.nt.gov.au apart from the Competition and Consumer Act 2010 (Cth), which is available at www.comlaw.gov.au.

2. nformation you must receive

Before you sign a contract to enter a retirement village, you must be given:

• a list of all costs payable to enter the village;
• a list of all recurrent charges, fees or management fees payable by a resident and a statement of the method used to calculate any variation;
• a clear outline of the method used to calculate the aggregate levies;
• a statement of the nature and fee structure of all personal care services;
• a list of any additional or optional services provided at your cost;
• details of the costs associated with moving into and living in the different types of accommodation offered at the village;
• a detailed budget, including any provision for future maintenance, for the current financial year;
• a copy of Schedule A to the Code containing written answers to the questions about the village asked in that Schedule;
• a copy of the 'resident's checklist' set out in Schedule B to the Code;
• a copy of any village rules and any by-laws applying to the village under the UTA (see Item 10); and
• an explanation of the refund entitlement, if any, if you or management terminate the residence contract (see Item 16).

Comparing the information provided for different villages will assist you to choose which village you want to live in.

3. Types of retirement villages

Retirement villages differ in relation to the types of title that residents obtain when they purchase a right to occupy the village. The types of title that may be available include:

• freehold (where you purchase the legal title to your unit and occupy the unit as its owner);
• leasehold (where you sign a long-term lease over the unit that can be registered on the title to the village land); and
• licence (where you sign a contract that gives you a long-term right to occupy a unit in the village but the licence is not registered on title).

Various other (less common) types of title may be available, such as company share title and title arising from a unit trust.

You should seek legal advice about which type of title is best for you.

4. Contracts you will be required to sign

If you decide to move into a retirement village, you will be required to sign 1 or more contracts which will:

• give you a right to occupy the unit you have chosen;
• give you a right to use the shared village facilities and to access the services provided at the village;
• set out your rights and obligations while living in the village as a resident and the fees and charges you must pay; and
• set out what will happen when you leave the village.

There is no standard or prescribed form of contract in the Northern Territory, so the terms of the contracts will differ between villages and will depend upon the ownership and management structure of each village.

At a minimum you will have to sign a residence contract, which is a contract under which you obtain the right to live in your unit. This will be:

• for freehold villages - a contract of sale to purchase your unit from the current owner of the unit;
• for leasehold villages - a lease for a term of between 49 and 199 years; or
• for licence villages - a contract giving you a long-term right to occupy your unit.

For freehold villages you may also have to sign a management agreement or services agreement setting out the services you will receive from the manager and your rights and obligations while living in the village, and a mortgage and/or caveat over your unit to secure the manager's right to receive the fees you are obliged to pay.

Additional contracts may be required depending on the village - for example, you may have to sign a separate licence if you wish to secure the use of a garage, car space or storage locker at the village.

5. Premium/ purchase price

You will usually have to pay a one-off lump sum to secure your right to live in the unit. This will take the form of either:

• for leasehold or licence villages - a premium paid to the administering authority; or
• for freehold villages - the price of the unit you purchase from its current owner (either the administering authority or a current resident who wants to sell his or her unit).

If you need to sell your existing home in order to pay the premium or purchase price, the administering authority or current resident (as the case may be) may agree to make your residence contract conditional upon you selling your existing home first.

6. Stamp duty

There is usually no stamp duty for leasehold or licence villages, but you may have to pay stamp duty to the Territory Revenue Office to purchase a freehold unit. The amount of duty will vary depending on the purchase price.

7. Cooling-off period

After signing a residence contract you have the right to cancel it and receive a refund of all money paid under the contract within a cooling-off period specified in your contract (which cannot be any less than 10 working days, starting on the day you sign the contract).

Your cooling-off period is waived if you commence to live in the unit during the cooling-off period.

8. Your rights and obligations

Your contracts will set out most of your rights and obligations while living in the village.

Other rights and obligations are set out in the legislation, including:

• the obligation of the administering authority to set the recurrent charges payable by residents in each financial year in accordance with a budget (see Item 9);
• your right to enforce your residence contract against a new administering authority of the village if the ownership of the village changes;
• your right to receive certain information about the village's financial affairs; and
• the rights of residents to privacy, quiet enjoyment of their units and autonomy.

9. Fees and charges you must pay

While living in the village you will be required to pay certain fees to the administering authority for the services and facilities provided. These charges include:

• recurrent charges, which are recurrent (eg monthly or fortnightly) charges that you pay as a contribution to the costs of operating and maintaining the village, such as the costs of providing the common services and facilities and carrying out required maintenance; and
• charges for any optional services you have chosen to receive individually (such as laundry, unit cleaning or the provision of meals).

The recurrent charges for each financial year will be set at the beginning of the year in accordance with a budget. The administering authority must consult with the residents before finalising a budget.

If you are considering moving into a village that is still being developed and not all units or community facilities will have been built by the time you move in, you should check the residence contract to see how this will affect the amount of the recurrent charges you will be required to pay.

In much the same way as if you owned a home, your contract may also require you to pay for:

• the costs of maintenance, repairs and replacements for your unit and any items that you own inside the unit; and
• any services separately provided to your unit, such as water, telephone and electricity.

For freehold villages you must also pay levies to the body corporate under the UTA, as well as local council rates and water charges payable for your unit.

10. Village rules

A village may have 'village rules' (eg about disposal of refuse, noise, parking of motor vehicles, etc) provided they are consistent with the general principles set out in Part 1 of the Code.

The administering authority must allow residents to contribute to the establishment of the rules and have input into, and agree on, any changes to the rules.

A resident who believes a village rule is harsh or unconscionable or contrary to the Code may apply to a court for an order about the village rule.

11. Resident input and participation

The Code requires management to create appropriate structures for resident input, where desired by residents, in consultation with current residents.

12. Dispute resolution

The administering authority must establish a Disputes Committee to hear disputes that arise within the village. A resident may apply to the Disputes Committee to hear a dispute. The committee must meet as soon as possible and decide the dispute in accordance with its charter and issue a decision within 30 days of receiving notice of the dispute.

If a resident or the administering authority believes the dispute is still not resolved, they may apply to a court to resolve the dispute provided the dispute materially affects a party and it is in the public interest to apply to the court.

13. Terminating your contract

If your wish to terminate your contract and leave the village, your contract will set out the process for doing so. That process will involve:

• for freehold villages - selling the unit; or
• for leasehold or licence villages - following the process in your contract for terminating your lease or licence.

For leasehold or licence villages, the administering authority may terminate your contract and require you to leave the village if it obtains an order from a court. The administering authority may apply for such an order only on certain limited grounds that are set out in the legislation - for example, if you cause or permit serious damage to your unit or injure a person in the village.

14. Reinstatement work

Your contract may require you to perform work on your unit when you leave the village that will assist in it being marketed to prospective new residents. For example, you may be required to restore the unit to the same condition it was in when you first moved in. Alternatively, the contract may allow the administering authority to carry out that work and require you to pay all or a share of the costs.

At a minimum your contract will likely require you to pay for any damage you have caused to the unit or work required due to accelerated wear and tear.

15. Finding a new resident

Your contract will set out the process that will apply for finding a new resident for your unit, including any rights you have to appoint a real estate agent. You may be required to pay a fee to the administering authority for performing work to assist in finding a new resident.

16. What you will receive when you leave the village

For leasehold or licence villages, your contract will usually give you a right to receive a refund of your premium. You may also receive a share of the increase in the value of your unit since you first moved in - known as the capital gain.

If you have a right to receive a refund of your premium, that right is protected by a 'charge' on the village land created by the legislation which prevails over most other interests in the village land.

Your residence contract will specify the time within which the administering authority must refund your premium. Under the legislation this cannot be any longer than:

• if you terminate your contract - 14 days after a new resident purchases the right to occupy your unit, or 6 months after the date you give notice to the administering authority terminating your contract, whichever happens first (in any event the administering authority is not required to refund your premium any sooner than 1 month after you vacate your unit); or
• if the administering authority terminates your contract - 14 days after the next resident takes occupation of your unit or 1 month after the contract is terminated, whichever happens first.

For freehold villages you will not receive a refund of a premium from the administering authority as you will have paid a 'purchase price' to purchase the unit, rather than a premium. However you will be able to sell your unit to a new resident who the administering authority approves. The new resident will pay you the agreed purchase price for the unit and that price will be paid to you when you settle the sale with the new resident.

17. What you must pay when you leave the village

Your contract will specify any amounts you must pay to the administering authority when you leave the village. These payments may include:

• a deferred management fee (which will be calculated in the way set out in your contract);
• for freehold villages - a share of the capital gain;
• reinstatement costs (see Item 14);
• any sale or marketing fees or costs you must pay under your contract;
• any unpaid services charges (including any services charges accruing after you have left the unit that your contract says you are responsible for);
• administration fees; and
• legal fees.

For leasehold or licence villages, these payments will be deducted from, or set off against, your refund of the premium and any capital gain share you receive. For freehold villages, the administering authority will require you to make these payments out of the purchase price you receive from the new resident.

18. Websites

Consumer Affairs (which is a division of the Department of Justice) is responsible for the regulation of retirement villages in the Northern Territory. More information about retirement villages may be obtained by contacting Consumer Affairs.

For information about stamp duty, see the Territory Revenue Office website at www.revenue.nt.gov.au.