Leaving a Retirement Village: Understanding Exit Fees and Resident Rights

The Legal Framework and 2026 Reforms

Leaving a Victorian retirement village is governed by the resident's residence and services contract read with the Retirement Villages Act 1986 (Vic) and the Retirement Villages Regulations 2026 (Vic) (SR 25/2026). The authorised version 85 of the Act (introduced by the Retirement Villages Amendment Act 2024 (Vic)) commenced on 1 May 2026 and updates a number of exit-related rules — including aspects of disclosure, cooling-off (seven business days from the day the resident signs the contract), recurrent-charge liability after departure, exit-entitlement timing and dispute resolution. A separate prescribed standard-form contract regime under the Retirement Villages Amendment (Standard Form Contracts) Regulations 2026 (Vic) (SR 105/2026) commences on 1 September 2026 and applies to contracts entered from that date; it does not apply to contracts signed before commencement. Whether a particular provision applies to a given contract depends on the contract date, the tenure and the transitional provisions. This article is current as at 23 July 2026, and the contract wording and the current statutory framework need to be reviewed together in each case.

How Departures Occur

A resident may leave a Victorian retirement village in broadly three ways: by choice during their lifetime, by moving into higher care, or by death.

Permanent Moves During the Resident's Lifetime

A resident may terminate their occupancy subject to the residence contract and the applicable statutory framework. Notice periods, permitted grounds and related processes are set out in the contract and may be affected by the current legislation and transitional rules. Practical matters to consider on a lifetime departure include:

• where the resident will live until the unit is resold or the entitlement paid;
• how any recurrent charges applicable after departure will be funded;
• whether the resident's next accommodation requires particular payment arrangements (aged-care accommodation may, depending on the provider and the resident's circumstances, involve a refundable accommodation deposit, a daily accommodation payment, or a combination — advice should be sought in each case); and
• whether bridging finance is needed and on what terms.

Move to Aged Care

Where the move is into aged care, timing pressure can arise between the aged-care provider's accommodation arrangements and the payment of the exit entitlement from the retirement village. Commonwealth residential aged care is governed by the Aged Care Act 2024 (Cth), in force since 1 November 2025, and is distinct from the Victorian retirement-village regime. The applicable Victorian framework contains protections in certain circumstances that may enable a resident to access part of an exit entitlement to fund aged-care accommodation, subject to the relevant statutory conditions and the contract. Each contract and each resident's circumstances need to be reviewed carefully.

Death of a Resident

When a resident dies, dealing with the unit becomes part of the administration of the estate and is typically the responsibility of the executor or legal personal representative. The operator should be notified promptly. Steps the estate may need to consider include:

• securing and inspecting the unit;
• clearing personal effects within any applicable contractual period;
• liaising with the operator about the resale or buy-back process; and
• addressing any recurrent charges that continue after death — subject to the contract and to any statutory caps or limitations that apply to that contract.

For more on the executor's broader responsibilities, see our guide to the duties of an executor in Victoria.

Sale and Resale Arrangements

Resale arrangements in Victorian retirement villages vary. Depending on the tenure and the contract, the operator may manage the resale, the resident or estate may have some role in the process, or a statutory buy-back or similar mechanism may apply. The contract sets out matters such as who selects the agent, how the price is set, and whether the resident or estate has consultation or approval rights. Matters worth reviewing include:

• Marketing. Whether the unit is listed externally, offered through the operator's waitlist, or both.
• Pricing. The evidence used to set the listing or resale price.
• Sales commission. Whether any agent's or operator's commission is separate from any deferred management fee.
• Refurbishment timing. When refurbishment is undertaken relative to marketing and settlement.

Deferred Management Fees

A deferred management fee (DMF) — sometimes described as an exit fee — is a possible component of the exit calculation in a Victorian retirement village contract. Whether a DMF applies, and how it is calculated (for example, as a percentage of the ingoing contribution or resale price, accruing on some basis over a period and capped after a set time), is a matter for the specific contract.

Any interaction between a DMF and a share of capital gain or loss, and the effect of departure timing on the calculation, depend on the contract, the tenure and the applicable statutory framework, including any reforms that apply. Reviewing the DMF clauses in context is important when forecasting an exit entitlement.

Refurbishment and Reinstatement

Whether the resident or estate is responsible for refurbishment or reinstatement on exit, and to what standard, is a matter of the residence contract read with the current statutory framework and any applicable disclosure obligations. Points that are commonly examined include:

• the standard the contract requires — for example, condition on entry with fair wear and tear, or some other standard;
• whether any charged items amount to routine maintenance or capital improvement that the operator would otherwise undertake;
• whether the resident or estate has had the opportunity to obtain independent quotes; and
• whether contractors are at arm's length or connected to the operator.

Where refurbishment or reinstatement charges appear to exceed what the contract or applicable law authorises, residents and estates can seek advice about the available options.

Timing of Exit Entitlements

For contracts signed on or after 1 May 2026, the exit entitlement must be paid by the earliest of: the date fixed by the contract; another date agreed between the resident and the operator or proprietor; or 12 months after the resident delivers up vacant possession. Earlier contracts remain subject to their own terms and the transitional provisions of the Retirement Villages Act 1986 (Vic). Any qualifying settling-in-period exit has its own separate statutory timing and should not be conflated with the general rule. Residents and estates should record the relevant dates arising under the contract and legislation and make written requests at the appropriate times.

Common Areas of Dispute

Areas that can lead to disputes on departure include:

• the scope and cost of refurbishment or reinstatement charges;
• the extent to which recurrent charges continue after departure;
• marketing conduct, listing prices and resale timing;
• the operation of capital-gain or capital-loss provisions in a changed market; and
• communication between the operator and the resident or estate about the exit process.

Options for addressing such issues include the operator's internal procedure, conciliation through VicAssist Retirement Villages (Consumer Affairs Victoria) and, in cases within its jurisdiction, VCAT under the Retirement Villages Act 1986 (Vic). The appropriate pathway and available remedies depend on the nature of the dispute.

Matters Residents and Families Can Ask About

Depending on the residence contract and the current statutory framework, matters residents, families and executors may be able to seek during the exit process include:

• a written explanation of how any exit entitlement has been calculated;
• copies of quotes or invoices supporting any refurbishment or reinstatement deductions;
• updates on the marketing of the unit and any offers received;
• access to the operator's internal dispute-resolution process; and
• referral of unresolved matters to VicAssist Retirement Villages conciliation or, in cases within its jurisdiction, VCAT.

The availability of each item depends on the contract and the applicable statutory framework and should be reviewed in each case.

Practical Steps Before Leaving

1. Re-read the residence contract, focusing on the exit clauses.
2. Ask the operator for a written estimate of any exit entitlement or payable amount.
3. Ask for a list of any refurbishment or reinstatement items and itemised quotes.
4. Identify any timing rules relating to the payment of exit entitlements or continuing recurrent charges under the contract and the applicable legislation.
5. Confirm what recurrent charges (if any) will continue after departure and on what basis.
6. Coordinate with any new aged-care provider or alternative accommodation in advance.
7. Obtain independent legal advice on the contract and the operator's calculations before signing any release or variation.

How We Help

Our retirement villages team acts for residents and estates throughout the exit process — reviewing exit calculations, negotiating refurbishment deductions, chasing waiting-period payments and, where required, running disputes through VCAT. We work closely with families and executors so that the exit is as smooth and financially sensible as the original entry was hopeful.

Related Reading

• Retirement Villages in Victoria: A Practical Guide
• What Should You Check Before Signing a Retirement Village Agreement?
• Retirement Village Contracts Explained
• Probate & Estate Administration

Frequently Asked Questions