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When deciding to move into a retirement village there are important matters to consider. The decision involves understanding foreign concepts, legal jargon and personal challenges one may be facing at the time. Not all villages are the same. There are certain things to look out for when purchasing a right to occupy in a village The Retirement Villages Act 2003 (the “Act”) provides that an intending resident must receive independent legal advice from a lawyer before signing what is called an Occupation Right Agreement (“Licence to Occupy”). Advice from a lawyer is an essential step in guiding you with your purchase... When reviewing a Licence to Occupy, aspects we advise our clients on include: Understanding what I am purchasing? The interest commonly held by resident in a retirement village is an occupation licence and not a separate legal title. A resident is buying the right to occupy the apartment and use the facilities. There is not an interest in land being acquired. It is therefore important to consider the financial strength of the Village, because if they cease to operate, residents may lose their Licence to Occupy they paid so much for. What happens if I no longer live there? If the right is to be sold, on death or termination of the agreement, the village will have the right to sell. Residents will not usually receive any capital gain and certain deferred management fees are deducted from the sale price. It is also important to consider how long apartments are taking to resell in a Village as your capital will be locked up until that occurs. What fees are payable? Some Villages offer fixed management fees while others offer lower fees but they can increase over time. Some Villages will allow deferral of management fees meaning you won’t need to pay anything until the Licence is sold. What additional support is offered for later stages of life? Some Villages offer additional support to residents to enable them to stay there longer and even offer rest home and hospital level care. Without that support being available, couples may find themselves split up if one partner needs to move to rest home or hospital level care, for example, with the remaining partner left responsible for the ongoing maintenance obligation of village and the costs of care. Other considerations: There are also practical day-today considerations. Villages may differ on care facilities, social activities, costs provisions for meals, transport services and other services. Some even include incentives like helping with moving costs and grocery vouchers. These benefits must be weighed against the Village’s service charges. Every village will have governing rules and obligations for use of the property. The rules may include restrictions on what animals you may keep, maintenance obligation of each Village and that of the resident. The above are some of the key factors that are important when deciding which Village is best suited for you. The team at ASCO Legal have many years of experience helping guide intending residents through the decision process. This includes advising on the legal rights acquired and the practical considerations for a resident. Our team of caring professionals can help you today. Our team of caring professionals can help you today – we invite you to contact us. The above article first appeared in The Times, 23 Feb 2022 (Vol 51, No 7) and also appeared in the Pohutukawa Coast Times, 20 May 2022 (Issue 1431) Our TeamComments are closed.
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