Retirement Villages Explained
Arcadia Waters villages are like any other suburban community in the sense that people are simply going about their lives as they choose. The main difference is a retirement village community comprises people at a similar stage in life who are all seeking security, a sense of community and facilities that a retirement village offers.
Retirement village ownership structures come in a few different shapes and sizes. Arcadia Waters communities are based on a ‘lease for life’ financial model. A lease gives you the security of tenure you’d reasonably expect and ensures that the whole village is maintained to a continually high standard by the Village Managers.
This type of agreement also keeps down the cost of developing such a village as there are no separate titles, no GST payable on the lease and no stamp duty. The result is a lower ingoing contribution to the new premium. Your lease provides a secure and legally binding interest that is protected by your Resident Agreement, the Retirement Villages Act 1992 and a Memorial which is lodged over the title of the Village land protecting your rights under the Retirement Villages Act. The village cannot be sold for any other purpose than as a Retirement Village, so your investment is secure.
About our Fee Structure
When you move into one of our villages, you will pay to purchase your home, also known as ‘the Premium’. The factors that determine the premium could be the size of the home, the village location and market conditions, to name just a few.
Recurrent Charges, commonly referred to as ‘operating costs’, refers to the maintenance and running costs of the village. These costs are shared between all existing village residences, with the resident(s) of each property paying a share of the costs each month, based on the size of their unit. The operating costs are annually estimated and provisionally fixed by Arcadia Group, ranging from $345 to $675 per month. Residents are consulted when the annual budgets are formed. They are finalised at the end of the financial year.
The Facilities Fee is also known as an exit fee. Upon settlement of the New Premium, (the amount a willing prospective resident is prepared to pay), the Facilities Fee is a percentage calculated on the years of occupancy of the outgoing resident. While part of this fee is profit, we also reinvest back into the community.
This may contribute to:
- Capital improvements within the community
- Infrastructure upgrades
- Support of staff
- Facilities provided to the community.
The Facilities Fee is calculated over your first 6 years of living in an Arcadia Waters community and is capped at 30%. The fee is not paid until you leave your home.
Most retirement village leases include a contribution to a long-term maintenance fund (or ‘reserve fund’) that sets money aside for large items like the repair and replacement of water systems or other common services and facilities. This is generally not payable until you end your lease.
Similar to selling or renting a property, you will be required to ‘make good’ your residence at your cost when you leave. The make-good requirements will be set out in your lease. Many residents choose to bring their residence up to a higher standard to achieve a higher price and faster sale in the property market. Your Village Manager will explain in detail the benefits of doing this.
Sales and Marketing Fee
When you end your lease, you may need to pay for the costs of marketing and selling your residence.
You may also be charged a relatively small fee to cover the administration costs of closing out your lease when it ends.
Interested to find out more?
If you would like to read more about retirement village living and the comparisons with General Residental Living, click here to read an independant study conducted by Built Environment Informatics & Innovation Research Centre, University of Technology Sydney.
The Retirement Living Council has put together the Book of Wise Moves – your one stop shop with everything you need to know about retirement living options, from costs to contracts, onsite services and so much more. Written to be accessible and easily understood it’s also packed with examples to help you make an informed decision.
The Retirement Living Code of Conduct is an initiative of the two peak bodies representing retirement living across Australia – the Retirement Living Council (RLC) and Leading Aged Services Australia (LASA). Through their collective membership, they represent more than 50% of retirement communities across the for-profit and not-for-profit sectors, including Arcadia Group. The Code is particularly focused on the wellbeing of residents, through fairness in marketing and sales practices; maintaining good relationships with residents and stakeholders; and specific processes when residents move out. There is a particular emphasis on improving the handling of complaints and reaching resolution in disputes.
Arcadia Group has signed up and are proud to support the Code of Conduct. To read the Retirement Living Code of Conduct, click here