Some of the things to look for in a village contract

Our experience assisting residents with retirement village contracts is that the community is generally not well served by the legal profession and their village operator clients in the quality of documents that are presented to residents. The drafting is often poor, and the costs to prospective residents in negotiating changes can be extraordinarily high. Here are just a few of the issues we help you with.

• Make sure that you understand what the recurrent charges are, what items are included in the budget, and above all, that the residents can vote to amend the budget so as to increase the recurrent charges that you will have to pay. It is too late to complain at the first meeting of residents.
• You should make a record of any representations or promises that were made by the operator which are not included in the contract document or which are contrary to provisions in the document, and then tell us about them.
• Village operators commonly try to pass on their liability to residents by way of an "indemnity". An indemnity is an agreement where the resident undertakes a contractual liability to the operator/village whether or not the resident is at fault. An indemnity can make a resident liable for damage or injury to the village or to other persons whether or not the resident has been at fault. So, although the Retirement Villages Act prohibits the operator from requiring the resident to take out insurance, many operators effectivelymake it mandatory that the resident take out insurance for the liability which the resident has under the indemnity.
• Residents should take out contents and public liability insurance that will cover the liabilities under the village contract. To do this, you should give a copy of the village contract to your broker or insurer and tell them that the insurance and indemnities must cover the insurance requirements and indemnities in the village contract.