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Before deciding to leave, a resident should consider the information in their most recent contract check,
or ask for a new contract check.
A contract check provides a written estimate of what the resident would receive if they left,
calculated based on their specific contract and circumstances.
The operator must provide a contract check annually, and within 30 days of a request.
For information on how to ask for one, go to Contract checks.
What a contract must disclose about fees
A residence contract must set out the fees payable when a resident leaves the village.
An operator cannot charge departure or exit fees that were not disclosed to the resident beforehand.
Any fee that is not properly disclosed is void and does not need to be paid.
If a resident is unsure which fees apply, they should refer to the section of their residence contract
that deals with fees payable on departure or exit.
If the information cannot be found or is difficult to understand, the resident's most recent contract
check should include these details.
For contracts entered into on or after 1 May 2026, the contract must also include a
reasonable estimate of the costs and charges payable if the resident were to leave after
1, 2, 5 and 10 years of residence.
What is typically deducted from an entry payment
When a resident leaves a retirement village, the operator refunds the resident's ingoing contribution
or entry payment, less the deductions set out in the residence contract.
Common deductions are outlined below.
The departure fee (or deferred management fee)
This fee may also be described as a deferred management fee, exit fee or deferred fee.
It is a percentage of the amount the resident paid to move into the village and is charged
for each year, or part of a year, that the resident has lived there,
up to a maximum cap stated in the contract.
For example, if the fee is 3% per year up to a maximum of 30%,
the total fee can never exceed 30%, regardless of how long the resident stays.
If a resident moves from one premises to another within the same village,
the departure fee is calculated by reference to the total length of time
the resident has lived in the village overall.
A resident is not required to pay a departure fee if they leave during the settling‑in period.
The residence contract must clearly set out:
- the percentage rate
- the method of calculation
- the maximum cap
The departure fee is typically the largest single deduction from a resident's refund.
For contracts entered into on or after 1 May 2026:
- the departure fee must be calculated on a daily basis
- it stops accruing on the day the resident hands back vacant possession of the premises
- it must be calculated as a percentage of the amount originally paid to move in, not the resale price
Outstanding maintenance charges
For contracts signed before 1 May 2026, a resident's liability for maintenance charges
does not necessarily end when vacant possession is handed back.
Maintenance charges may continue until the earliest of:
- another resident entering into a management or residence contract for the premises
- another resident taking up residence with the operator's consent
- 6 months after vacant possession is handed back
For contracts signed on or after 1 May 2026, once the resident has handed back vacant
possession, the operator cannot charge any further maintenance charges.
Reinstatement costs
The residence contract may require the resident to return the premises to a specified condition
when the resident leaves.
If work is required to meet that condition, the cost may be deducted from the resident's refund.
The scope of reinstatement required should be set out in the residence contract.
For contracts signed from 1 May 2026, additional legal rules apply.
Go to Reinstatement of premises for more information.
Capital gain and loss sharing
Many residence contracts include provisions about what happens if the next resident pays
more or less for the right to occupy the premises than the current resident originally paid.
How any gain or loss is shared depends on the terms of the residence contract.
For contracts signed on or after 1 May 2026, if the contract shares capital losses
with the resident, it cannot give the resident a larger share of any loss than the share of gain
the resident would receive.
The sharing arrangement must operate the same way for gains and losses.
When the resident will receive their refund
When the refund must be paid depends on when the residence contract was signed.
Contracts signed before 1 May 2026
The resident's refund must be paid by whichever of the following happens first:
- 14 days after a new resident pays an ingoing contribution that is at least equivalent to the amount owed
- 14 days after a new resident moves into the premises
- 6 months after the resident handed back vacant possession
If no new resident moves in, the refund becomes due at 6 months regardless.
The resident cannot be required to wait beyond that point.
For owner residents, the refund must be paid within 14 days of settlement of the sale,
or 14 days after the buyer takes up residence before settlement, whichever occurs first.
Contracts signed on or after 1 May 2026
The resident's exit entitlement must be paid by whichever occurs first:
- the date specified in the residence contract
- a date agreed between the resident and the operator
- 12 months after the resident permanently vacates
When making payment, the operator must also provide a written payment statement
showing the amount paid and how it was calculated.
If the resident needs money while waiting for the refund
If a resident is moving to aged care or other alternative accommodation and cannot wait
for the refund to be paid, they may be able to ask the operator to make advance payments
directly to the new provider from the amount owed.
Read more about aged care and alternative accommodation payments for how to make this request.
If the refund is not paid on time
If the operator does not pay the refund by the due date,
the resident can apply to VCAT for an order requiring payment,
as well as interest on the overdue amount at the statutory rate.
For contracts signed on or after 1 May 2026,
VCAT can also order the operator to recalculate the entitlement if it was miscalculated,
award interest, and make any other necessary orders.
For earlier contracts, VCAT can still order payment of the amount required under the contract,
together with interest on any late payment.