Queensland

1. Legislation

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

• Retirement Villages Act 1999 (Qld); and
• Retirement Villages Regulation 2010 (Qld).

Under this legislation, all retirement villages must be registered with the Office of Fair Trading. You should check that any village you are considering moving into is registered.

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 scheme operators).

Retirement villages with 'freehold' title (see Item 3) are also regulated under the Body Corporate and Community Management Act 1997 (Qld) and the relevant 'regulation module' that applies to the village. That Act, and the Property Agents and Motor Dealers Act 2000 (Qld), also regulate the process of entering into contracts for freehold title.

General 'fair trading' legislation also applies to retirement villages in Queensland. This includes the:

• Fair Trading Act 1989 (Qld); and
• Competition and Consumer Act 2010 (Cth).

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

2. Information you must receive

Before you sign any contracts to enter a retirement village, the scheme operator must give you a Public Information Document for the village. The Public Information Document must be in the form prescribed by the Queensland Government and must set out information about the village such as the accommodation offered, any age restrictions that apply, the costs and fees residents must pay, the facilities available for residents' use, the rights and obligations of residents, and various other matters. The Public Information Document you are given will be deemed to form part of any contract you ultimately sign with the scheme operator.

Comparing the Public Information Documents 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 reside in the village. The most common types of title are:

• freehold (where you purchase the legal title to the unit and occupy the unit as its owner);
• leasehold (where you sign a long-term lease over the unit that will be registered on the title to the village land - generally for a term of 99 years); 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).

There are various other (less common) types of title, 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 a residence contract. The residence contract will:

• give you a right to reside in 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 residence contract in Queensland, so the terms of the residence contract will differ between villages and will depend upon the ownership and management structure of each village.

The contracts you sign will usually be:

• for freehold villages - a contract of sale to purchase your unit from the current owner of the unit, a management agreement or services agreement setting out your rights and obligations while living in the village, and a mortgage and/or a caveat over your unit to secure the scheme operator's right to receive the fees you are obliged to pay;
• for leasehold villages - a lease which will be registered on the title to the village land; or
• for licence villages - a contract giving you a long-term right to occupy your unit.

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. Ingoing contribution/purchase price

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

• for leasehold and licence villages - an ingoing contribution paid to the scheme operator; or
• for freehold villages - the price of the unit you purchase from its current owner (either the scheme operator or a current resident who wants to sell their unit).

Any money you towards an ingoing contribution or purchase price must be held in trust by an authorised trustee until the other party becomes entitled to it in accordance with the legislation.

If you need to sell your existing home in order to pay the ingoing contribution or purchase price, the scheme operator 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 generally no stamp duty for leasehold or licence villages but you may have to pay stamp duty to the Office of State Revenue 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 monies paid under the contract within a cooling-off period of 14 days, starting on:

• the day the residence contract is signed; or
• if the residence contract is subject to a later event happening or another contract being entered into - the day the later event happens or the other contract is entered into.

8. Your rights and obligations

Your residence contract 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 scheme operator's obligation to set the general services 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 scheme operator of the village if the ownership or management of the village changes; and
• your right to receive certain information about the village's financial affairs.

9. Fees and charges you must pay

While living in the village you will be required to pay to the scheme operator certain fees for the services and facilities the scheme operator provides. These charges include:

• a general services charge, which is a recurrent (eg monthly or fortnightly) charge 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 personal services you have chosen to receive individually (such as laundry, unit cleaning or the provision of meals).

The general services charge for each financial year will be set at the beginning of the year in accordance with a budget. The charges must not increase from one year to the next by more than the increase in the Consumer Price Index for that year, except if the residents approve the increase by a special resolution or the increase results from increases in particular costs such as rates, insurance premiums for the village, salaries and wages.

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 general services charges you will be required to pay.

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

• the costs of maintenance, repairs and replacements for your unit and items 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 body corporate legislation, as well as local council rates and water charges payable for your unit.

10. Village rules

Residents may make, change or revoke village rules or by-laws (eg about disposal of refuse, noise, parking of motor vehicles etc). They can do this by making a special resolution at a meeting of the residents (ie 75% voting in favour), provided the scheme operator consents. A village rule or by-law made by the residents will not have any effect to the extent it is inconsistent with a residence contract.

11. Resident input and participation

Residents may hold their own election and form a 'residents committee' for the purpose of interacting with the scheme operator about the village. If a village has a residents committee, the committee has the right to request certain financial information from the scheme operator throughout the year.

The scheme operator must hold an annual meeting of the village residents at the end of each financial year to present the village accounts for that year and the budget for the upcoming year. The scheme operator will also use the annual meeting to request any approvals required from the residents for increases in general services charges.

12. Dispute resolution

The legislation sets out the process for resolving any dispute you may have with the scheme operator. You must first attempt to resolve the dispute informally. If the dispute remains unresolved, you may apply to the Queensland Civil and Administrative Tribunal to appoint a mediator to assist you and the scheme operator to reach an agreement. If an agreement is still not reached, you may apply to the Tribunal for a hearing. The Tribunal may make a range of orders after hearing the dispute.

13. Terminating your residence contract

You may terminate your residence contract and leave the village at any time by giving 1 month's notice to the scheme operator.

The scheme operator may only terminate your contract on certain limited grounds that are set out in the legislation - for example, if you intentionally or recklessly injure someone in the village.

14. Reinstatement of your unit

When you terminate your residence contract and leave your unit, the legislation requires you and the scheme operator to negotiate and try to agree on the work required to bring your unit to a 'marketable condition' (this is called reinstatement work). The scheme operator must perform that work.

If you are a freehold resident the legislation requires you to pay all of the costs of the reinstatement work, however if you are a leasehold or licence resident you are only required to pay a proportion of the costs. That proportion is the same proportion in which you share the 'capital gain' when the unit is sold to a new resident (see Item 16).

15. Finding a new resident

The legislation also requires you and the scheme operator to negotiate and try to agree on the current market value of the right to reside in your unit. This is so the right to reside in your unit can be marketed and a new resident can be found for the unit.

Under the legislation, your residence contract may only give the scheme operator the exclusive right to find a new resident for your unit for up to 6 months after your residence contract is terminated.

16. What you will receive when you leave the village

For leasehold or licence villages, your residence contract will set out what you will be entitled to receive when you terminate your residence contract and leave the village (this amount is known as your exit entitlement). How your exit entitlement is calculated will vary between villages. It will normally be a refund of the ingoing contribution you paid to enter the village (and 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). Your right to receive your exit entitlement is protected by the registration of your lease with the Department of Environment and Resource Management (for leasehold villages) or by a 'charge' on the village land created by the legislation which prevails over most other interests in the village land (for licence villages).

Your residence contract will specify the time within which the scheme operator must pay you your exit entitlement after you terminate your residence contract. However, this cannot be any longer than 14 days after a new resident purchases the right to reside in your unit.

For freehold villages, instead of receiving an exit entitlement from the scheme operator you will be able to sell your unit to a new resident who the scheme operator 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 to the new resident.

17. What you must pay when you leave the village

Your residence contract will specify any amounts you must pay to the scheme operator when you receive your exit entitlement (for leasehold or licence villages) or when you sell your unit to a new resident (for freehold villages). The most common payments are:

• an exit fee (which will be calculated in the way set out in your residence contract);
• for freehold villages, a share of the capital gain;
• reinstatement costs (see Item 14);
• your share of the scheme operator's costs of finding the new resident, worked out in accordance with the legislation (freehold residents may also be required to pay any commission owing to the scheme operator if the scheme operator is the real estate agent that sold the unit);
• any unpaid services charges (including any services charges accruing after you have left the unit that the legislation says you are responsible for);
• administration fees; and
• legal fees.

If you have a leasehold or licence interest, these payments will be deducted from, or set off against, your exit entitlement. If you have a freehold interest, the scheme operator will require you to make these payments out of the purchase price you receive from the new resident.

18. Websites

The Office of Fair Trading (which is a division of the Department of Employment, Economic Development and Innovation) is responsible for the regulation of retirement villages in Queensland. More information about retirement villages can be obtained from the Office of Fair Trading's website at www.fairtrading.qld.gov.au. The Office of Fair Trading's pocket guide to retirement village living in Queensland, 'Retire Smart', is available on that website.

The Queensland Civil and Administrative Tribunal has jurisdiction for retirement village disputes. For information about the Tribunal, visit www.qcat.qld.gov.au.

For information about stamp duty, see the Office of State Revenue website at www.osr.qld.gov.au.