Moving into the village
The contracts comprise a Loan Agreement, a Lease Agreement and a Management Contract. Together, these grant you the right to live in your Unit and enjoy the facilities and services during your time at the Village, and detail the service and rights provided to you. Some of your rights are legislated, such as your security of tenure, which is protected by the Retirement Villages Act. Other rights and obligations are detailed in the contracts.
- You agree to pay the Loan Amount to the Owner as an interest free loan.
- The Owner grants you a long-term lease (99 years)
- The Association agrees to provide services to you as set out in the Management Contract.
When you move in you make a loan to the owner as per your contract and you may also be required to make a once off, pre-paid rental payment.
You pay service fees on a monthly basis to fund the running costs of the village (including staff). Your contribution to the Long-Term Maintenance Fund is used for large, infrequent expenditures and improvements to the Village and is included in your monthly payment to the Resident Services Association. The monthly service fees also cover council and water rates and gas charges (where applicable) but you may be eligible for a pensioner discount/rebate. In addition you have to pay your own electricity and telephone bills which are separately metered.
After you have left the village and as soon as a new resident takes up a lease on your unit, your loan will be refunded to you less any exit fees which may be applicable, such as the deferred fee and, where applicable, a contribution to the cost of refurbishing the unit ready for the next resident.
Your exit fees contribute towards unit and village enhancements to support the future desirability of the village, provide a contribution towards the marketing and management of the village, as well as providing the investment return to the owner.
There is no stamp duty on Loan/Lease contracts.
Your Centrelink homeowner status will determine your eligibility for rent assistance, which can help you cover monthly service fees. If your entry contribution (also known as the entry cost, or cost of the loan and lease) is less than the Centrelink defined “Extra-Allowable Amount” (at 1 July 2019 this was $210,500), then you are considered by Centrelink to be of non-homeowner status and as long as you meet all the other requirements, you may be able to claim rental assistance.
As this calculation is based upon the entry contribution it is certainly worthwhile for all Serviced Apartment residents to make enquiries with Centrelink.
Centennial Living villages offer new residents a 12-month owner warranty for the refurbished units on all fixtures and fittings and workmanship on the unit itself. Some appliances may have longer manufacturer warranties and where relevant, these warranties will continue to apply beyond the owner warranty period.
Any non-standard fixtures and fittings such as pergolas, awnings and solar panels/batteries are considered alterations/additions and where provided, are done so without warranty as they were not Centennial Living commissioned work.
Centennial Living villages offer all new, incoming residents a money back guarantee. If you find during your first 90 days that village life is not for you, and you give us a buy-back notice, then 45 days after you provide Vacant Possession you will receive your loan amount back, less an amount equal to the market rent for the period of your occupancy of the unit and any costs of work required to remove/make good any damage or alterations of the unit.
As this is a change of mind guarantee, the buy-back notice can only be given by the person named as the resident in the contract.
Living in the village
As detailed in your Management Contract, the Association is responsible at all times to repair and maintain in good condition the common driveways and pathways; any common buildings or structures; all facilities on the common land; the fences and walls on the boundary; all outside paintwork, lighting, wiring, pipes and drains; and the foundations, roofs, guttering and eaves of all units.
The Village Manager is always the first point of contact to report issues or to discuss concerns you may have regarding repairs and maintenance around the village.
The Association and Centennial Living work together to establish and implement capital replacement and village enhancement plans.
From time to time, in order to enhance the Village living experience, the marketability of the village or preserve the physical health of the Village, the Owner may spend capital to renew aspects of the Village.
Resident service charges and maintenance contributions applied by the Association are for any purpose authorised by the rules of the Association, including the replacement or renewal of any building or structure or any part or parts of them.
It has generally been the case at this Village that the Owner is responsible for the replacement of major items and equipment, where repair and maintenance is no longer feasible.
Subject to approval, residents are permitted to make improvements to their unit by installing a range of non-standard fixtures and fittings such as pergolas, awnings and solar panels/batteries at their own cost.
As detailed in your Management Contract, the resident is responsible for the repair and maintenance of their unit and must keep the unit in good and proper repair and pay for any repair, renewal or reinstatement while living in the unit. Any tradespeople you hire must complete a Village site induction and comply with other requirements as directed by the Village Manager.
General refurbishment of units during occupation such as replacing floor coverings, renovating kitchens and bathrooms, or courtyard repaving, are permitted to be undertaken at the resident’s cost and upon prior approval.
Although there is no obligation, Centennial Living supports residents in transferring to a unit most appropriate for their physical and/or financial needs. Existing residents who request a transfer are offered priority access to Serviced Apartments. The first step is to speak with the Village Manager should you wish to explore alternative accommodation options.
Visitors, such as family members or a carer, are entitled to live with you in the unit for a period of up to one month. Longer stays are subject to Committee approval.
If a resident vacates the unit for any reason, the family member or carer must leave the unit within 30 days.
You are encouraged to bring any concerns you have to our attention. Your village has a Complaints policy which is provided in the Village Handbook. In the first instance, you should follow the procedures outlined in the policy.
If your concern is regarding Centennial Living staff, then talk with your Village Manager, or call Centennial Living’s office or if you wish, put your concern in writing and send it to our office.
If you are unhappy with the outcome or the process of any complaint or dispute at your Village, then you are welcome to contact Centennial Living. Alternatively, you can contact Consumer Affairs Victoria.
Departing the village
The first step in leaving the Village is to fill out an “Intention to Vacate” notice or in the case of death, the family fill in the “Death Notification” form.
After you have left, the next step is for your family or friends to pack up and clean the unit. Once this has been done and all keys and remote controls are handed into the Village Manager, the Village Manager will then give you a “Vacant Possession” form to complete.
The Village Manager does the first inspection of the vacant unit and if he/she feels the unit has been left empty, clean and tidy, the Vacant Possession form will be forwarded onto Centennial Living.
Centennial Living will arrange for the builders to complete a Scope of Works. If your family wish to attend when the scope of works is being prepared , they are welcome to do so. The Scope of Works cannot be undertaken before Vacant Possession is provided, as the extent of reinstatement works necessary cannot be fully assessed while there is furniture in the unit.
The Scope of works is then sent to your nominated representative for acceptance to undertake work as set out in the Scope. In general, work does not commence until the acceptance letter is signed.
Refurbishment work will usually commence about one week following the authorisation being signed and will take from 6 to 12 weeks depending on how much work is required.
Centennial Living wants to ensure that your unit sells as quickly as possible, for the highest price, and refurbishment of the unit is an important factor in achieving this goal.
Every 6 months or so, Centennial Living undertakes a review of unit prices based upon residential house prices and recent village sales. From time to time, this review will also consider prices derived from independent valuations undertaken. Following these reviews, the prices are established and published in the Village Fact Sheets.
Pricing of individual units in the village (within the price range published in the Fact Sheets) is set based upon a number of factors including: the quality of the refurbishment; the position and orientation of the unit; any additions or alterations; recent demand for similar units; and the price expectations of the outgoing resident or their family.
Village marketing takes a variety of forms and includes specific unit advertising as well as marketing to raise general awareness and interest in the Village itself. There is a comprehensive marketing program undertaken throughout the year which covers a variety of advertising forms, including an extensive online digital presence.
Display units are rotated through the village to reflect the various unit styles and these are open at each Village for prospective new lessees to view.
Unlike the sale of a suburban home, where the outgoing resident is responsible for 100% of the marketing costs, for residents with a marketing contribution determined in their contract, this fee generally covers around half of the costs of the advertising and promotion, with the other half contributed by Centennial LIving.
Your residence contracts specifies how long you are responsible for the payment of service fees after leaving the village. Generally speaking, the outgoing resident is responsible for the payment of service fees for 90 days/three months after Vacant Possession or until a new resident commences a lease of the unit whichever is the earlier (but some contracts specify 6 months).
In practice, the Residents’ Services Association stop billing you after you have left the village and then after the 90 day/3-month period they start billing the owner so that the other residents do not need to subsidise the vacant unit. The amount you owe is then generally deducted from the amount due to you on settlement of the exit entitlements after re-leasing and paid directly to the Residents’ Services Association.
Following termination of your lease, your exit entitlements will be calculated in accordance with your residence contract. The components of the calculation differ from one contract to another, so the following is just a guide:
- You will be entitled to the return of your loan;
- If you have a Participation contract, you may be entitled to part of the ‘capital gain’ which is the difference between the loan paid by the incoming resident and your original loan amount. but you may be required to pay a contribution towards the cost of refurbishing the unit so that it is in a fit state to be marketed to a new resident;
- Simplicity contracts have no entitlement to capital gains but also no requirement to contribute to the costs of refurbishing the unit (under normal circumstances);
- And you may be required to pay an exit fee as described in item 2 above.
Outgoing residents will receive an estimate of their exit entitlements based upon a range of estimates and assumptions, but unless otherwise specified in your lease or agreed, the exit entitlement payment is calculated on actual costs and selling prices.
Exit entitlements are generally payable 14 days after the Turnover Date, which is the day on which a new resident commences a lease of the unit. In practice Centennial strives to make the settlements simultaneous for receipt of the loan from the new resident and payment of Exit Entitlements to the outgoing resident.
Between the granting of Vacant Possession by the out-going resident and the settlements on Turnover Date, the owner provides funding for all of the refurbishments including those payable by the outgoing resident, payment of service fees to the Residents’ Services Association after expiry of the 90 day/three-month continuation period and all of the sales and advertising costs to locate a new resident.
Moving to Aged Care
The Retirement Villages Act has addressed the rights of residents moving into Aged Care is a variety of ways over time.
If the resident vacates the village in order to move into residential aged care and agrees to pay an accommodation payment, the resident may require the owner to pay an amount equal to the lesser of the Daily Accommodation Payment and 85% of the exit entitlement due to the resident, 6 months after the later of moving into aged care or providing vacant possession.
The definition of Reinstatement Work has varied over time in different resident contracts, but in principle means any work necessary to bring the Unit to a marketable standard, whether any such work is required as a result of fair wear and tear or otherwise.
Reinstatement is not necessarily a like-for-like replacement, it can include elements of renovation (bringing up to date) as reinstating a unit needs to reflect the purpose (ie Independent Living Unit for an older person), building and safety standards, and fixtures and materials in use today.
Reinstatement is in the nature of the following:
- (a) cleaning;
- (b) repainting, re-tiling and re-plastering;
- (c) replacing carpets and other floor coverings including wooden floors, tiling lino etc;
- (d) replacing blinds, curtains and other window furnishings;
- (e) replacing out-dated and/or inefficient heating/cooling systems;
- (f) removing alterations or additions to the Resident’s Unit that the resident is required to remove;
- (g) repairing damage or additions (such as uneven paving);
- (h) treating for insects (including fleas), pests, rodents, vermin and termites; and
- (i) subject to the condition of the Resident’s Unit, replacing, renewing or servicing the Fixtures, Fittings and Furnishings (including screens and awnings), appliances, equipment, paving and any other property provided in or on the Resident’s Unit;
Depending upon the contract, the outgoing resident may be required to pay for all reinstatement/renovation work or may only be required to pay for reinstatement work and contribute to the cost of the renovation components.
- What is Enhancement Work?
Enhancement Work means any work, in excess of Reinstatement Work, which is appropriate to be done to bring the Resident’s Unit to a contemporary standard in order to increase the exit entitlement payable and/or reduce the time to re-lease the Resident’s Unit. Enhancements are the addition of items or features to the unit (for which there was no previous equivalent) at the Owner’s discretion (and cost) but are generally items such as:
- (a) adding a second toilet;
- (b) adding additional heating/cooling systems (say, in a bedroom or study);
- (c) paving new areas of the Resident’s Unit and adding outdoor amenity;
Information is correct as at 6 April 2020
The Australian Housing and Urban Research Institute has published a report on the actual and perceived benefits of downsizing for Australia’s senior citizens.The report highlights how retirement villages hold significant value not only for those that live there, but for the wider community as a whole.