When love bites.

Dont scoff it does happen!

Lets say for a moment that you are a single retiree living in a retirement village when, suddenly, across the smoky atmosphere of the mahjong table, you spot the new love of your life. A whirlwind romance follows (lets face it, by this stage of your life you know what you like and what you dont, so why muck around?) and the next thing you know, you have moved in together. No problems right? Wrong!

Generally speaking, retirement village contracts only allow for the signatories to the lease or licence to occupy the premises. This rule is in place to stop guests or family moving in for extended periods of time, particularly if they dont meet the age requirements. So if you have fallen in love and want to live with your new partner, whether married or de facto, you will need to get permission from the village operator. This is not as onerous as it sounds, and permission cannot reasonably be withheld by the operator. Permission as such still does not make your new love a party to the contract however, and there is still a legal process to be observed before they can legally live in the village. The legal process requires the existing resident to execute a collateral deed to their occupancy contract, or in some instances even enter into a new lease or licence.

Before you go asking the village operator to start drafting legal agreements, it is worth taking the time to decide which of the following three outcomes you are seeking:

1. The most basic outcome is where you want your new love to occupy the residence with you. When you pass on, their right to occupy is extinguished and they must move out of the unit.

2. The second outcome is where you want your new love to enjoy the same occupancy rights that you do, so in the event of your passing first, they can stay on in the unit. Any proceeds form the re-sale of the unit when they exit however, are passed on to your estate and not theirs (like a tenants-in-common arrangement).

3. The final outcome is where you want your new love to enjoy the same rights of occupancy and ownership that you do. Under this scenario, if you pass away before they do, they can occupy the unit until they pass on or decide to leave. When they leave, they or their estate benefits from any exit entitlements (for all intents and purposes, a joint tenancy arrangement).

The first outcome listed above simply requires a collateral deed to be executed between the existing residents and the village operator. Understandably, the cost of this agreement belongs to the resident requesting the document and is usually around $800.

Depending on the operator of the village and the legal advice they receive, the second outcome may require a collateral deed or an entirely new agreement. The third outcome definitely needs a new lease or licence agreement to be executed with both residents and the village operator. The cost of this may be around $2,000. When your new agreement is executed, your previous terms and conditions should remain the same, and be backdated to your original occupancy date. For example, if you have lived in the village for five years and you then execute a new occupancy agreement to include your new love, your deferred management or exit fees accrued to date will be carried over to your new agreement. You should not be required to pay out your accrued fees to date and start again.

My advice is to start your relationship off with a collateral deed. If you are still together after a couple of years and you want your new love to participate in the proceeds of your estate, then request a new agreement. I know this is kind of like doubling up on the legal fees, however it is better to be safe than sorry!

What about you? Have you found love in a retirement village?