If a person has signed a retirement village contract to become a resident and is having second thoughts, there are 2 potential ways to exit with limited financial consequence:
1. The cooling-off period.
2. The settling-in period (for non-owner residents, where included in their contract).
Cooling-off period
A person has seven business days from the day they sign to terminate the retirement village contract. This is called the ‘cooling-off period’. All residents have the right to cancel their contract during the cooling-off period.
All retirement village contracts must include a clear and visible notice about the terms of the cooling-off period.
If the contract did not include a clear and visible notice about the terms of the cooling off period, the resident can terminate the contract within 6 months of becoming aware that a notice should have been included.
How to cancel
To cancel under the cooling-off period, the resident must give a signed written notice of cancellation to the other contracting party (the operator or proprietor). They must deliver the signed notice by:
- giving it to the village operator or proprietor
- leaving it at the operator or proprietor address stated in the contract
- sending it by post to the operator or proprietor address stated in the contract.
What you get back
If a person cools off on the contract they are entitled to get back any entry payment or deposit that they have paid.
The village operator or proprietor can keep either $100 or 0.2% of the entry payment (whichever is greater).
Settling-in period
The settling-in period only applies to non-owner residents, and only if the contract includes one.
The settling-in period is a window after moving in during which a resident can leave without paying the deferred management fee or other full departure charges. It gives residents time to decide whether village life suits them before they are financially committed.
The timeframe for a settling-in period will be in the contract, if it includes one. The settling-in period cannot begin before the cooling-off period ends.
How to use the settling-in period
Before a resident leaves, they must give the operator written notice of their intention to leave the village during the settling-in period.
The contract will include notice requirements.
What a resident can and cannot be charged
If a resident leaves during the settling-in period, the only costs their contract can require them to pay are:
- fair market rent from the day the settling-in period commences until they deliver up vacant possession
- the cost of repairing any damage beyond fair wear and tear
- a reasonable administration fee — the greater of $100 or 0.2% of the entry payment.
Residents who have left during the settling-in period cannot be charged the deferred management fee.
Getting your money back
If a resident leaves during the settling-in period, their exit entitlement must be paid within 14 days of vacating the premises. This is much faster than the standard exit entitlement timeline.
Get advice if you are unsure
If you are considering cancelling and are not sure which option applies or what your deadline is, contact us or seek legal advice immediately. Time limits apply to the cooling-off and settling-in periods and deadlines cannot be extended once they have passed.