The treatment of accommodation bonds paid when a resident enters a retirement village continues to cause trouble.
All retirement villages have different documentation to cover the village rules and the financial arrangements that it requires to be in place before a resident enters into occupation of their village home unit. There will be many similarities between different villages’ documentation but they are all subject to the Retirement Villages Act. As long as a village complies with the Act it can decide on the details of its arrangements with its residents.
Residents who leave a village can suffer hardship if the arrangement with the village requires that the accommodation bond will not be refunded until a new resident is found. In cases where a village resident dies while living in the village the beneficiaries of the deceased resident’s estate can suffer great frustration trying to get the accommodation bond paid to the estate so that it can be distributed to beneficiaries. In most villages the monthly recurrent charges continue to be payable after the resident leaves (due to death or otherwise). It can take a very long period for a village to find a new resident.
Therefore all of your financial circumstances need to be considered carefully before you commit to a retirement village.
Another area of concern with retirement villages is risk that the accommodation bond will be completely lost. In those villages where you will need to buy a strata title home unit you will have more or less the same security as any home owner.
However, if you occupy a retirement village unit under a lease or license then you generally must pay an accommodation bond totalling some hundreds of thousands of dollars. The payment creates a statutory charge over the land but the question is whether the money will be available for refund when your occupation ends.
Typically the documentation relating to occupation of retirement villages is very long and potential residents find it difficult to maintain interest in their contents however, all of the conditions required for a refund of the accommodation bond must be considered carefully. It is recommended you seek legal advice when dealing with retirement village contracts.