4 Facts About Retirement Villages That’ll Make Your Hair Stand on End
If you or your loved ones are already a member of a retirement village you have probably done a Google search on the topic a while ago….
Well, at least you should have.
Retirement villages are a dream turned into a nightmare for many seniors and their families. When the legal issues are not well taken care of they find themselves in desperate situations like those ones….
1. Retirement villages are run by investment funds that do not care about your wellbeing.
This is a double sided blade – first of all, investors will always be protected by the lawyers of the retirement village owners. This means that they will do everything to take all your money and repay you the least possible amount if you decide to move out. And they can do this legally with complex contracts not even your law school senior grandchild can understand.
On the other hand, homeowners that become investors are forced to sign contracts that except managers from responsibilities and paying debts. Many report of being repaid just 10% of their initial investment after the bankruptcy of the fund managing the retirement village.
2. Retirement villages are not regulated.
Unlike the care facilities and homes sector, the rules and regulations in retirement villages are set by investors and management and can be far from reasonable. Retirement villages are not regulated as heavily because they are seen as property transactions. This is the reason that retirement villages contracts vary greatly from one place to the other. The fact that your friends are happy with their village doesn’t mean you will be happy with yours.
3. Retirement villages are easy to get in, hard to get out.
Many residents report that the nightmare doesn’t begin until they decide to move out of the retirement village. Exit fees can be as much as 12.5% of the initial investment. In addition, many retirement villages do not repay any of it unless the property is resold which is completely managed by them. In this way management slows down the sale and reduces the provision of getting your money back. Some residents report that it has taken them 8 years to recover their investment (partially).
4. You don’t pay what you think you will pay.
Even if you don’t want to leave your retirement village, you have a responsibility to what happens to your assets after you die. Your children will need to deal with the outstanding fees, selling and managing the property after you are gone.
And many times they are served huge bills of accumulated management fees. In retirement villages there are two types of fees most commonly – annual utilities, etc. usage charge and accumulated management fee. The latter is in many occasions payable only upon leaving or death of the resident which means you have a bill piling up that you might not be aware of and has reportedly exceeded 5% of the initial investment!
We are sorry if we have scared you off…
But sometimes we need to be a little scared of what can happen without the proper legal back up. Not everyone has good intentions and even if they do in the mix of corporate and shareholder interests the single person always gets dealt the worst pair of cards.
All of these four retirement village nightmares (and all of the ones that didn’t find place in this article) can be avoided with one single responsible action: consulting a lawyer.
A family lawyer has extensive experience in retirement villages can spot the clauses in your retirement village contract that will make your hair stand on end.
Don’t spare your time and effort into finding a good and responsible lawyer that can sort out things for you.
If you or your loved ones are (future) members of a retirement village, we will be happy to review your contract to make sure you are choosing the right place. Get in touch for Retirement Village and Care Sessions Packages and affordable consulting.