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Retirement village operators must know their legal obligations when preparing and providing residence contracts and related documents. Non-compliance can result in penalties of up to $35,000.
Operators must not enter into a residence contract unless the land is endorsed as a retirement village and the retirement village has been registered on the Retirement Village Register.
Documents to be provided to prospective residents
Operators must give prospective residents these documents at least 10 business days before the prospective resident signs a residence contract:
- residence contract - see what a residence contract must include
- disclosure statement - see what a disclosure statement must include
- financial statements from the last annual meeting of residents (or last meeting if only one was held)
- minutes from the last two annual meetings
- residence rules
- remarketing policy - see what a remarketing policy must include
- codes of conduct for retirement village operator, staff and residents
- dispute resolution policy
- surplus and deficit policy.
Document standards and good practice
All documents provided to prospective residents must meet standards to ensure clarity and compliance with the law.
Operators should follow good practice by explaining documents in person, answering questions, and encouraging prospective residents to seek independent professional advice, such as legal or financial advice.
Writing standards and good practice for residence contracts and related documents
Contract decision periods
Holding deposits and holding periods
A holding deposit is a payment made by a prospective resident to an operator to temporarily reserve a residence while they consider entering into a residence contract. The maximum holding deposit allowed is $5,000.
A holding period is the time during which a retirement village operator agrees to hold a residence for a prospective resident after receiving a holding deposit.
The holding period starts when the operator receives the deposit and ends on the earliest of the following:
- the day the person tells the operator they do not want to sign the contract
- the 12th (twelfth) business day after the person receives the required documents
- the date the operator and the person agree to when the deposit is paid.
During the holding period
The operator must not:
- increase the price of the residence
- increase any fees or charges under the proposed contract
- enter into a contract for the same residence with another person.
Refunding the holding deposit
The operator must take reasonable steps to refund the deposit in full within 10 business days of any of the following occurring:
- receiving notice from the person that they don't want to proceed with the contract
- following the expiry of the holding deposit period:
- entering into a contract with someone else
- deciding not to hold the residence for the person.
Disclosure period
The disclosure period is the time a prospective resident must have the required documents before they can enter into a residence contract. This is 10 business days from the day the prospective resident receives all required documents.
Waiving the disclosure period
A prospective resident may choose to waive the disclosure period in some circumstances. This allows them to move forward more quickly, as long as they have the information and advice they need.
To waive the disclosure period, all of the following must apply:
- the prospective resident has received all required documents
- their legal representative has confirmed in writing to the operator that they have provided legal advice on those documents
- the prospective resident has given written notice to the operator that they wish to enter into the contract before the disclosure period ends.
Cooling-off period
The cooling‑off period starts when the prospective resident signs the residence contract, not when they move into the village.
A prospective resident has 10 business days after signing the contract to change their mind and cancel it without penalty.
If the contract is cancelled, the operator must refund the resident’s ingoing contribution within 10 business days of:
- receiving the resident’s payee details, or
- the contract being cancelled (whichever happens later).
Waiving the cooling-off period
A prospective resident may choose to waive the cooling-off period and move into the residence earlier. To waive the cooling-off period, a prospective resident must sign a written waiver acknowledging the operator has informed them about the entitlement to cool-off and they have chosen to waive this entitlement.
Premises condition report
A premises condition report records the condition of a residence when a resident’s right to occupy begins. It helps clarify who is responsible for maintenance and repairs, and which fund will cover costs when the operator is responsible.
The operator must give the resident a premises condition report before their right to occupy residence begins. Failure to do this can lead to penalties of up to $35,000.
The resident must:
- complete the report
- return it to the operator within 10 business days of when their right to occupy begins.
If the resident does not return the completed report within this timeframe, they are considered to have agreed to its contents.
Contact the Retirement Village Unit
Email: retirementvillages@sa.gov.au
