Whilst deciding on the care options that are available may be clear and easily understood the same cannot be said about the different ways or tenure options relating to your Retirement Village unit.
Given the complexity of ownership structures it is imperative that retirees consider obtaining both legal and financial advice prior to making a commitment to embark on retirement village living, so that they have a clear picture of the financial and legal aspects and implications of their decisions.
The various types of title or tenancy of a Retirement Living unit include
Leasehold – You will normally be given a 99 year or life time lease over the unit. You will pay a set monthly fee which is approved by the residents at the Annual General Meeting. The village owner or operator is responsible for presenting a “balance budget” at the AGM. The fees are used to pay for the day to day operational expenses of the village.
Strata Title – Some villages operate under the model of a strata title. The resident owns the unit the same as if you own a unit in a suburban block of units. This means that you will pay two lots of monthly fees (1) Strata Fees to the Owners’ Corporate for expenses to run the Strata Scheme and (2) To the owner or operator of the Retirement Village for the operating expenses.
Rental Model – Some villages offer units to rent where the resident occupies the unit under a typical residential tenancy agreement. These typically do not incur Deferred Management Fees or Exit Fees.
Company Title – This is where when you purchase your retirement village unit you are purchasing shares in the company which owns and operates the retirement village. The company board will consist of residents and the residents run the company for the benefit of all residents.
Whichever option you choose, ensure you obtain good legal advice and fully understand the contract you are signing so that there are no nasty surprises when it comes time for you to leave the retirement village.