RETIREMENT VILLAGES – 5 QUESTIONS PEOPLE DON’T ASK BEFORE ENTERING
With more and more of our population looking towards retirement and entering into Retirement Villages, the importance of knowing your contractual obligations before entry is imperative.
Below are 5 of the more common issues people seek advice on after they have already secured their place and often signed a Contract or paid money:
1. What is the Exit Fee?
All Retirement Villages charge what is known as an Exit or Deferred Management Fee which is charged when you leave the village.
The amount is generally a percentage of the sale price of the unit when the resident leaves the village. There is no industry norm and your Residential Contract will state how the Fee is to be calculated. Some villages charge as much as 30% of the sale price.
2. Do I share in any capital appreciation?
Each village is different in regards to who benefits from any appreciation to the value of the unit. Some villages enable the resident to retain all benefit whereas others share a percentage.
3. What ongoing fees am I responsible for?
You will be required to make either weekly or fortnightly fee payments which are known as a General Service Charge and cover the services the operator supplies or makes available to the residents of the village.
You may also choose to use personal services (optional) that are offered by the village and you will be responsible for paying the cost of these.
4. Will the ongoing fees increase?
The short answer is yes.
Although the amount of the increase must be in accordance with the Body Corporate and Community Act (for Queensland villages), the fees will continue to increase each year, at least in line with the increase in the general cost of living.
5. Will there be legal fees associated when I buy and sell the unit?
Yes, there will be and you will often have to contribute or pay the operator’s legal fees in addition to your own personal legal costs.
Anyone who is looking to enter into a retirement village should ensure they ask the above questions before they agree to purchase a unit. Being aware of the costs that you will pay at the commencement and end of your residence will give you and your family more peace of mind.
Call our office to book an appointment with Kristy Collins, Senior Associate to make sure that you or your parents receive the right advice before you lock into a Contract.