Retirement Village Contracts Explained (Victoria)

The Statutory Framework and the Reforms

The reforms in the Retirement Villages Amendment Act 2024 (Vic) commenced on 1 May 2026. Contracts signed from that date must comply with the current prescribed and prohibited-term rules, including the rule that a fee, cost or charge not disclosed in the operator's information statement is not payable. Use of the prescribed standard-form contract is required from 1 September 2026. During the transitional period, a compliant contract that is not in the prescribed standard form is not for that reason invalid. Contracts signed before 1 May 2026 continue under their own terms and the transitional provisions of the Act.

The Information Statement

The operator's signed information statement is the central pre-contract disclosure document. Under the Act it must be published on the operator's website and provided in the circumstances the Act specifies, including with targeted promotional material and, for a prospective resident, at least 21 days before entering the contract. A fee, cost or charge that is not disclosed in the information statement is not payable by a resident under a contract signed from 1 May 2026.

Residence, Management and Village Rules

The residence contract grants the right to occupy and sets out entry payment, exit and resale arrangements. The management or services contract deals with the day-to-day operation of the village — recurrent charges, services, budgets and consultation. Village rules deal with community living and are separate from any owners-corporation rules that apply to strata-title or company-title villages. These documents work together but are not the same as, and cannot be substituted for, each other.

Owner and Non-Owner Residents

Villages in Victoria are offered under a range of legal structures — freehold or strata title, long-term lease or licence, company-title or unit-trust, or other contractual rights to occupy. Owner residents (for example freehold, strata or company-title) generally hold a proprietary interest and sit within an owners-corporation framework where applicable. Non-owner residents hold a contractual right to occupy. The Act treats each group differently on post-departure charges, exit entitlements and reinstatement.

Cooling-Off and Settling-In

The statutory cooling-off period is seven business days after signing. The contract must clearly disclose that right, cancellation must be in writing in the required form, and the operator may retain only the prescribed administration amount. Any contractual settling-in period is a separate arrangement, conditional on the terms of the contract, and generally concerns a non-owner resident.

Fees and Charges

• Entry payment. The upfront amount paid on entering the village.
• Recurrent maintenance charges. The ongoing charge for the operation of the village. Increases, budgeting and consultation are governed by the contract and the Act.
• Optional service charges. Charges only payable if the resident uses the relevant service.
• Departure or deferred-management fee. Payable on exit. The Act provides for daily calculation and defines the base amount to which the rate applies.
• Reinstatement. Contract and Act rules determine which works and costs a non-owner resident is responsible for on departure.
• Sale, marketing and administration charges. Recoverable only to the extent the contract, Act and disclosure regime allow.

Capital Gain, Capital Loss and Exit Entitlement

How capital gain and capital loss on resale are shared is a contract term. For contracts signed from 1 May 2026 the Act prevents a resident being allocated a higher share of capital loss than of capital gain. The exit entitlement — the amount the operator must pay the resident (or the estate) — depends on the contract and the applicable statutory timetable, which differs by contract date and tenure. Do not assume that any single formula or timetable applies to every village.

Post-Departure Maintenance Charges

Whether monthly maintenance charges continue after vacant possession depends on the contract date, tenure and any owners-corporation obligations. Statutory limits apply in some cases and not others. A resident or estate should not assume that charges universally continue until resale.

Changes to Fees, Services and Rules

The Act provides consultation, notice and reasonableness constraints on changes to fees, services and rules. Change to a core financial term ordinarily requires the resident's agreement or a formal process. Change to village rules and owners-corporation rules follow their own procedures. Operators are not free to change rules, services or core financial terms at will.

Capital Maintenance and the Dispute Procedure

Operators must maintain a capital maintenance plan and fund on the terms set by the Act. Every operator must also maintain and publish a written village dispute procedure and provide a copy of it within two business days of a resident's request. Complaint handling and record-keeping obligations sit alongside the free voluntary VicAssist Retirement Villages conciliation service, and VCAT where jurisdiction is available.

Annual Contract Check

Operators must offer an annual contract check to residents, and a resident may request a written contract check on the basis and within the timeframes set by the Act. Independent legal advice on the residence contract, management contract and village rules is available at any time.

Related Reading

• Retirement Villages in Victoria: A Practical Guide
• Retirement Village Agreement Checklist
• Retirement Village Disputes and VCAT
• Leaving a Retirement Village: Exit Fees and Resident Rights

Frequently Asked Questions

How Parke Lawyers Can Help

Parke Lawyers advises Victorian prospective residents and families on the review of retirement village contracts, disclosure statements and factsheets under the Retirement Villages Act 1986 (Vic), through our Retirement Living & Aged Care team. Speak with our team before you sign so the financial mechanics of the contract can be understood before entry.