Contracts and finances

Contracts are legally binding agreements between two or more parties. It is important that you read and understand the terms of any contract before signing it. As contracts can be very complex, obtaining independent legal advice during your planning and investigation stage is strongly recommended in order to make an informed decision. As there are many different types of housing-related contracts, there are also many different forms of legislation that pertain to your particular housing type, such as property law, tenancy law and consumer law. It is important to consider legal advice from someone who specialises in the type of accommodation you are exploring and who is experienced in the nuances (and potentially hidden clauses) of the industry, such as what is included with the purchase, what services are included in renting the property or room in a facility, ownership, cooling-off periods, what changes can be made, restrictions and fees.

Risks of not having a contract

There are many risks that you may need to consider before agreeing to something without a contract. A contract can provide some level of assurance, protection and transparency. You may be offered a cheaper deal for cash for some smaller renovation works on your property – it may seem like a good deal but what are the risks of not having a contract? What happens if the work isn’t completed or not completed to an acceptable quality?  

Even though it may not seem necessary to have a contractual agreement if you are moving in with family/friends or building a granny flat on their property, you may be putting yourself at risk.  Without a contract or legal stake in the title, what will happen to you if there is a divorce? Or if your friends/family can no longer live in the house and the property is sold? What happens if your relationship with your friends/family members breaks down? You may think that this will not happen and that you trust them but unfortunately this has happened to other people in the same situation. Without a legal contract and/or your name on the title, it can be very difficult to get your money back and you may find yourself with nowhere to live. Having a contract can also make explicit any expectations and responsibilities and reduce the likelihood of misunderstandings and help to preserve your relationship with your friends or family members.

Paying money to a family member in exchange for the right to live there, paying for a granny flat to live on their property, or transferring your property into a family member’s name could affect your pension/part pension, as it is considered ‘gifting’. Services Australia’s Financial Information Service can provide you with details on how your housing choices could affect your pension.


Planning your finances sooner can have a huge impact on your choices later in life. What savings will you have? What will your costs be regarding accommodation, living expenses and healthcare? How will your finances affect your housing choices? Independent financial advice can help you achieve your goals and safeguard your future.  

Finding a good financial adviser can be challenging but the Australian Securities and Investments Commission’s Moneysmart website contains advice on how to find a registered financial adviser and tips on how to choose one that is right for you. Moneysmart also produces a helpful booklet “Financial Advice and You”. If you would like a copy posted to you, contact the Seniors Enquiry Line on 1300 135 500.

More information

More information on this and other items to consider can be found by moving through the other topic specific links. Alternatively, you can have a chat with the Seniors Enquiry Line on 1300 135 500. We can provide you will some current resources and information on current services in your chosen location as well as some tips or tricks to look out for.