Recently you may have seen TV programs and newspaper stories relating to the Retirement Village Industry. The investigation which resulted in these stories uncovered various 'traps', which can cause vulnerable residents and their families significant stress, both financial and physical.
When you are considering retirement and the purchase of a home for your later years, it is important not only to carefully read the documentation provided by the village before you sign on the dotted line, but also to obtain legal advice and understand all costs, including the purchase price, the ongoing maintenance fees and any “exit”, “deferred management” or “departure” fees. Many villages are very well run, with residents enjoying a great lifestyle and with reasonable gains made when re-selling.
We have, however, heard of some villages where the operator takes up to 40% of the sale price when selling and also retains 50% of any capital growth.
Many people who have signed such contracts are vulnerable when they “buy in” but certainly feel exploited when it is time to leave. Some villages also have a clause in their contracts which specifies that they are to be the selling agent, often charging higher than usual agency fees.
It is important to understand that running any village is costly, especially if residents wish to enjoy an array of facilities and amenities. Obviously these things need to be paid for, but it is essential to ensure that you are not going to be taken advantage of by unfair contracts prepared by operators whose first priority may be making a profit rather than considering the financial circumstances of those people who will be moving in.
According to a Colliers International Report in 2016, the Retirement Village sector is booming. One local village, “The Cotswolds”, at North Turramurra has enjoyed an excellent reputation for the past 34 years. Entry prices are affordable and residents are able to renovate and refurbish to their own taste. There are no exit or departure fees and residents or their beneficiaries retain 100% of any capital gain.
For further information, please contact Julie at Turramurra North Real Estate. Ph: 9449 3075 Mob: 0418 606 006 firstname.lastname@example.org
BY JULIE RODGERS, TURRAMURRA NORTH REAL ESTATE
DISCLAIMER: This information is intended to be of a general nature only. We have used our best endeavours to ensure that it is true and accurate, however, readers should obtain their own independent legal and financial advice.