South Australia

1. Legislation

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

• Retirement Villages Act 1987 (SA); and
• Retirement Villages Regulations 2006 (SA).

Under this legislation, the certificates of title for the land comprising each retirement village must be endorsed and noted by the Registrar-General of the land registry as being used as a retirement village. You should check that the certificates of title for any village you are considering moving into are endorsed as required.

Also, all retirement villages established on or after 1 November 2006 must be registered with the Office for the Ageing. You should check that any village you are considering moving into that was established after 1 November 2006 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 administering authorities).

A retirement village (or part of a retirement village) may also be a 'supported residential facility' under the Supported Residential Facilities Act 1992 (SA) (and regulated by it) where residential accommodation is provided or offered together with 'personal care services' as defined in that legislation.

Retirement villages with 'freehold' title (see Item 3) are also regulated by:

• if the village is a 'strata scheme' - the Strata Titles Act 1988 (SA); or
• if the village is a 'community scheme' - the Community Titles Act 1996 (SA).

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

• Fair Trading Act 1987 (SA); and
• Competition and Consumer Act 2010 (Cth).

The above legislation is available at www.legislation.sa.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 administering authority must give you a copy of the following:

• any residence contract you must sign to be come a resident (see Item 4);
• the financial statements presented at the last annual general meeting of the residents, including a written statement of any subsequent change in the affairs of the village or administering authority;
• a 'premises condition report' for the unit (see Item 15);
• the residence rules (see Item 11);
• the remarketing policy of the administering authority (see Item 16);
• any code of conduct to be observed by the administering authority; and
• the dispute resolution procedures for the village that are applied by the administering authority.

The administering authority must not charge you a fee for preparing or providing these documents.

If you ultimately sign a residence contract, it will be deemed to include a warranty that the information in the above documents is correct, subject to any alterations you agree with the administering authority.

Comparing the documents 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 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 - generally for a term of between 49 and 99 years); and
• licence (where you sign a contract that gives you a long-term right to occupy a unit in the village).

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 South Australia, 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 administering authority, 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 administering authority's right to payment of the fees you are obliged to pay;
• for leasehold villages - a lease for a term of between 49 and 99 years; 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. Premium/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 - a premium paid to the administering authority; or
• for freehold villages - the price of the unit you purchase from its current owner.

Any premium you pay under a residence contract must be held in trust by an authorised trustee until you either move into your unit or advise the administering authority that you will not proceed with moving into the 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 generally no stamp duty for leasehold or licence villages but you may have to pay stamp duty to Revenue SA 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 15 business days after the date you sign the residence contract or the date you receive the last of the documents required to be given to you before you sign a contract (see Item 2), whichever happens last.

8. Settling-in period

You have a right to terminate your residence contract within a 'settling-in period' of 90 days, starting on:

• the date you sign the contract; or
• the date you are admitted to occupation of your unit,

whichever happens last.

If you terminate your residence contract within the settling-in period the administering authority may require you to pay:

• fair market rent for the period in which you occupied the unit (less any amount payable for services that would otherwise be included in the assessment of fair market rent); and
• any other amount your residence contract says you must pay (except a penalty for having exercised your settling-in rights).

9. 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 administering authority's obligation to set the 'recurrent charges' payable by residents in each financial year (see Item 10);
• your right to enforce your residence contract against a new administering authority 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.

10. Fees and charges you must pay

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

• recurrent charges, which are recurrent (eg monthly or fortnightly) charges 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 recurrent charges for each financial year will be set at the beginning of the year in accordance with a budget determined in consultation with the residents committee (see Item 12). The charges must not increase from one year to the next beyond a level shown to be reasonable in view of the accounts for the previous year, and estimates for the current financial year, as explained at a meeting of the residents.

A special levy or levy for additional works or services cannot be charged to the residents unless authorised by special resolution passed at a meeting of residents (ie 75% voting in favour).

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 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 strata or community corporation under the relevant legislation, as well as local council rates and water charges payable for your unit.

11. Residence rules

The administering authority may make the 'residence rules' with which it will expect the residents to comply (eg about disposal of refuse, noise, parking of motor vehicles, etc).

A residence rule is deemed void if it is harsh or unconscionable.

If the administering authority changes the residence rules, it must give every resident a copy of the changed rules.

You must be given a copy of the residence rules free of charge on request.

12. Resident input and participation

Residents may hold their own election and form a 'residents committee' for the purpose of interacting with the administering authority about the village. The legislation sets out the rights and obligations of the residents committee in dealing with the administering authority, including the administering authority's obligation to undertake reasonable consultation with the committee in relation to a range of matters including maintenance issues raised by residents, preparation of an annual budget and proposed changes to services and facilities.

The administering authority must hold an annual meeting of the village residents no later than 4 months after the end of each financial year to present the village accounts for that year and the budget for the upcoming year. The administering authority will also use the annual meeting to request any approvals required from the residents, such as approval of a special levy.

12. Dispute resolution

All villages must have a policy for resolving disputes at the village, which must include a right for residents to be accompanied by a person chosen by them at any meeting held to resolve the dispute.

If you have a dispute with the administering authority, you may apply to the Residential Tenancies Tribunal for assistance to resolve the dispute. The Tribunal may hold a hearing. It may then make a range of orders following the hearing.

14. Terminating your residence contract

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

• for freehold villages - selling the unit; or
• for leasehold and licence villages - terminating your lease or licence in accordance with its terms.

For leasehold and licence villages, the administering authority may terminate your contract and require you to leave the village only in the limited circumstances set out in the legislation - for example, if you breach your contract or the residence rules. In most cases that decision will not be effective unless the administering authority obtains an order from the Residential Tenancies Tribunal confirming its decision.

15. Reinstatement of your unit

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 you will usually be required to pay for any damage you have caused to the unit or work required due to accelerated wear and tear.

For contracts entered into on or after 1 July 2002, your obligations about reinstatement will be set out in the 'premises condition report' included in your contract, which will provide detailed information about:

• the conditions of fixtures, fittings and furnishings provided in your unit;
• who will be responsible for repairing and replacing such items;
• when such items are due to be repaired; and
• how the cost of repairing such items is to be funded.

The village's 'remarketing policy' (see Item 16) will also set out the required procedures for identifying any work to be undertaken to ensure the unit is in a reasonable condition for remarketing, when and how such work is to be undertaken, and who will be responsible for organising the work and paying the costs.

16. 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.

Also, the administering authority must have a 'remarketing policy' for the village. The policy will sets out the village procedures for:

• fixing the price at which the unit will initially be remarketed, and when and how changes to that price will considered and made; and
• who will be responsible for any costs associated with the valuation of the unit.

17. 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 10 business days after a new resident purchases the right to reside in the unit.

Certain departing residents have the right to ask for early payment of some or all of their refund if required to move into an aged care facility.

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.

18. What you must pay when you leave the village

Your residence contract will specify any amounts you must pay to the administering authority when you leave the village. The most common payments are:

• a deferred management 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 15);
• any sale or marketing fees or costs you must pay under your contract or the village's remarketing policy;
• a contribution to any capital or long-term maintenance fund for the village;
• any unpaid services charges (including a reimbursement of services charges paid on your behalf by the administering authority for a period after you have left the unit as set out in the legislation);
• legal fees; and
• administration fees.

For leasehold or licence villages, these payments will be deducted from, or set off against, the 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.

19. Websites

The Office for the Ageing (which is a division of the Department for Families and Communities) is responsible for the regulation of retirement villages in South Australia. More information about retirement villages can be obtained from the Office for the Ageing website at www.ageing.sa.gov.au.

The Residential Tenancies Tribunal has jurisdiction for retirement village disputes. For information about the Tribunal, visit the Office of Consumer and Business Affairs website at www.ocba.sa.gov.au/tenancies.

For information about stamp duty, see the Revenue South Australia website at www.revenuesa.sa.gov.au.