Picture this: you are the Village Manager with 80 homes and 120 residents. Each of them has a vague or real idea of their individual contract terms, and they think that you do too.
But chances are that, at best, you only have a vague idea – not a great place to be when conversations start.
In fact, for most villages that are older than 10 years, it would be very normal to have multiple versions of resident contracts in place.
Versions change because of changes in regulations but also because owners and salespeople change the ‘sales offer’ in difficult times to entice a new resident into the village, plus many other reasons.
And over the past 15 years (since before the GFC) many villages have had multiple operators with each HO introducing various changes to resident contracts.
Build some vision of your village with a contract ready reckoner
In my experience, it is great to be able to look out the office window and think “I have a good idea of all the contracts out there in the village I have to work with”.
To assist with your decision-making and compliance, it is a great idea to develop what I call a Contract Ready Reckoner.
It is a simple document that identifies the various differing contract clauses that may be in place in the village. This document would likely include
- A description of how you identify the contract type (could be year range, operator name, pre-stage 2, etc.)
- Maintenance fee inclusions
- Exit fee
- Refurbishment charges
- Remarketing fees
- Administration fee
- Valuation requirement
- Refund payment/buy back timeframe
It can be a simple Word document or an Excel spreadsheet with each of these items as a column and a tick box.
It will become a handy tool for planning, budgeting, response to complaints, terminations and much more.
Invest the time – one hour a week
It does take a bit of time to assemble; you might want to allocate one hour a week, say on Friday, to just review five contracts. I suggest you start with the oldest. This process will take about six months, but you will be surprised and fascinated with what you find.
And it will give you a great sense of confidence when talking to your residents.
Please remember, regardless of these facts and descriptions in the contract, the Retirement Village Act will override any clause if it is for the betterment of the resident.