How exit works
When you leave a retirement village, by moving to a care facility, relocating, or passing away, the exit provisions in your ORA determine what happens financially.
The operator resells the unit and you receive your exit entitlement once sold
This is deducted from your capital before repayment (usually 20-30%)
Usually the village owner bears any loss and keeps any gain
Timeframes and obligations
There is currently no mandatory deadline for operators to repay your exit entitlement. Payment usually depends on the unit being resold to a new resident. Key points:
- Weekly fees may continue until the unit is resold
- The operator controls the resale process
- Refurbishment costs may be deducted
When a resident passes away
We understand this is a difficult time. When you are ready, this guidance can help you navigate the practical matters that need attention.
For executors and families managing affairs after a resident dies, the village exit process adds complexity to an already difficult time.
If you are a surviving spouse
Most ORAs allow a surviving spouse or partner to continue living in the unit. However, you should check your specific agreement and understand any implications for the estate. We can review your ORA and explain your rights.
Important to know:
- 1. Weekly fees usually continue. The estate remains liable until a new resident takes over.
- 2. The unit must usually be cleared within a specified period. Check the agreement.
- 3. The refund will not be paid until a new resident provides the capital sum.
- 4. The Deferred Management Fee calculation should be checked carefully.
Documentation to request
- • A copy of the original ORA and any variations
- • The operator's calculation of the refund amount
- • Details of how the DMF has been calculated
- • Statement of any outstanding fees or charges
- • The operator's timeline for remarketing the unit
Common disputes during estate exit
Disagreements sometimes arise between estates and village operators about:
- • The refund calculation, particularly capital gains treatment
- • Charges for repairs, refurbishment, or cleaning
- • How long remarketing is taking
- • Ongoing fee obligations during vacancy
Having the agreement reviewed before accepting any settlement can identify errors or questionable deductions.
What Carlile Dowling does at this stage
When you are facing an exit situation, we can:
- • Review the exit provisions in your ORA
- • Check the operator's refund calculation for accuracy
- • Negotiate refund timelines where there are grounds to do so
- • Challenge questionable deductions or charges
- • Resolve disputes with village operators
- • Support executors through the process
For executors, we also provide comprehensive estate administration services. If you are planning ahead, consider putting Enduring Powers of Attorney in place.
For executors: You do not need to navigate this alone
Village exit procedures can be unfamiliar and the timing pressure of ongoing fees makes it stressful. We regularly help executors understand their obligations, check calculations, and ensure the estate receives what it is entitled to.
Estate planning considerations
Retirement village occupation rights are treated differently from normal property for estate purposes. Your will should account for how these rights pass to your estate and how the repayment process works.
We can help with exit issues and estate planning for village residents. Contact us on 06 835 7394.