Should buyers trial retirement villages before signing?

Should buyers trial retirement village living before they sign a contract?

Test ‘drive’ a retirement home

The media and political spotlight has been shining steadily on the retirement village sector this year.

No doubt, some potential buyers of village homes may have been put off by stories of alleged poor behaviour by one operator. Others may be waiting to see the findings of the Australian Competition and Consumer Commission’s (ACCC) inquiry into the sector.

And then there are the other ‘others’ … thousands of Australians aged over 55 who dream of moving into a purpose-built ‘resort’ with like-minded retirees.

And let’s face it, who wouldn’t be tempted to choose to live in such an exclusive community? Especially one with heated pools and health spas, organised activities and excursions, fully-equipped gyms, cinemas, restaurants, ballrooms, golf courses and bowling greens?

Recently, a number of large retirement village operators reported that, during the past financial year, they had sold more than 2000 new dwellings.

Such was the demand for retirement village living that these operators are planning to build thousands more units in coming years.

If you have the finances to support the ongoing monthly fees associated with living in a village, and the allure is irresistible, you may like to try before you buy.

Several operators have a scheme where for a fee, prospective buyers can ‘board’ for a set term in a retirement village, so they can get a feel for the life before deciding to sign on the dotted line.

Lendlease offers a try-before-you-buy plan at serviced apartments in 10 of its retirement villages. The stays offered are between two and 14 days at sites in Victoria, South Australia and NSW, the company told YourLifeChoices.

Other major operators have been contacted about whether they had a similar try-before-you-buy offer, but did not respond in time for publication.

Would you consider moving into a retirement village if you could trial one first?

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    COMMENTS

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    Grey Voter
    24th Aug 2017
    12:00pm
    We recently moved into one of these villages after extensive research. Finally we settled on the one we're in as it ticked all the boxes. We have been here almost three months and without doubt it has been a great decision. In addition to all the state-of-the-art facilities, this village does not charge exit fees or for that matter, no refurbishment requirements if you leave. The village ? Ingenia Lifestyle, LARA in Victoria. If you own your own home, you can reasonably expect to purchase one of these delightful cottages and still have enough money in the bank to cover the fees for ten years or more without touching your pension, if you are on a pension that is, in which case Centrelink will probably pay you rent assistance. Take your time and obtain professional advice by all means, but don't be scared to take the plunge.....in all probability you will be pleasantly surprised.
    Pink Panther
    24th Aug 2017
    12:49pm
    I wish I had tried before I bought. There are things I like and things I don't.
    Positive
    I feel secure
    Made some nice friends
    Negative
    I feel restricted here - so many rules.
    I am on a aged pension and as fees go up my pension doesn't keep up with it. Goodness knows where I will be financially in 10 years time.
    I am on a lend/lease. So don't get rent assistance.
    The outgoing fees back to the company are high but I have to pay when something goes wrong like $750 for heating repair.
    MICK
    24th Aug 2017
    5:45pm
    Old carpenter's adage: measure 3 times, cut once.
    Sen.Cit.90
    24th Aug 2017
    2:34pm
    Be very aware of ALL costs there are many fees to pay the worst and most unfair is no water meter and sharing the cost of water, as a single person I have to pay the same as couples. In general, my water bill shows I'm paying three times more than singles outside the village. Add all costs to the Council Rates etc and it becomes an expensive venture.
    Puglet
    24th Aug 2017
    3:31pm
    Thanks for your response. I thought I had a good idea of what charges I will have to pay (or not pay). Until I now I didn't realise singles might have to pay utilities costed for couples. Recently I asked for a prospectus for a lifestyle village which charged 1000.00 a month maintenance but have not been able to find out what exactly what it covers. I do know the company says it provides 24 hour nursing care. 10 pages later I discovered it costs about 100.00 for the villages doctor to visit plus of course Medicare rebate. Residents pay own rates, utilities, insurance, repairs etc. personal alarms cost more as do meals. I also found that less expensive lifestyle villages are often built in areas with minimal public transport. Trips to the doctor or ambulance can be prohibitive.
    Lark Force
    24th Aug 2017
    3:55pm
    I know not all villages are the same but here’s my experience.
    In the Village I was in even though I leased it, I had to pay for all repairs to Oven, Hot Plates, Light Bulbs, Microwave, air conditioner, toilets. We went right through the lease agreement with our solicitor but there are things you don’t see or aren’t aware of. Supposed to be independent living but older folk depend on more able bodied residents to do things for them. Over 55s forget it, most were over 80. Averaged a death or serious illness or broken bones a month, very depressing.
    If you want to leave, you have to wait until a new lessee can be found. Then you must vacate 4 weeks before the new lessee takes up residence so management can refurbish the unit(at your expense). Full paint job, replace carpets, all appliances replaced, all curtains cleaned, sink replaced if marked, electrical safety check, gas check, reverse cycle air conditioner check, etc.
    You can’t terminate the electricity, water or gas supply as the re furbishers need those facilities(at your expense!) Same with phone if the security system depends on the phone line.
    You don’t get your money (what’s left of it) for the sale of your lease until a week or more after the new resident occupies the unit. And you keep paying the maintenance fee $400 a month until the new lessee takes over.
    Because you don’t have title to the villa you can’t get a bridging loan from the bank, but you must find somewhere to live for the time it takes to complete another home purchase. Relatives, short term rent(if you can find it!) caravan or tent somewhere?
    So its 6 weeks before you can even make an offer on a new home, plus the 60 to 90 day settlement period. Rents aren’t cheap, add bond money, 2 removalists, its not cheap.
    Every time someone leaves the village the corporation that owns it really cleans up. Their selling commission is 2.5% based on the sale price, not your ingoing price. So leaving can deplete you of a substantial sum and that can be traumatic.
    In hindsight, house prices appreciate more than units in retirement villages, you ask why on earth did I go there? It seemed the right thing to do at the time. I’m back in a house now and I will be able to leave some inheritance to my family. Rather than have those money hungry Leasing companies exploit me any more. And if you think you’ll have a bit of money to splash about after you sell your home and pay less for a unit, remember the Centrelink will assess what you have left over!
    Don’t go there, pay someone to cut your lawn, clean your spouts etc you’ll be better off in the long run. You’ll have a better asset to sell to pay for better age care should you need it later on. And like Pink Panther, you won’t feel restricted by the village rules.
    Thanks for reading this, I’ve been wanting to get that off my chest for a long time. I hope I haven’t spoilt your dream.
    Puglet
    25th Aug 2017
    1:02am
    Thanks for taking the time to write this post. I really appreciate what you have to say. The colorful brochures make it look wonderful but I hate ripoffs. I think I'll stay where I am. The money I'll save I can spend having a lot of treats and a gardener! That Aveo report on the ABC interviewed a woman who said she was charged 10.00 a pop for changing a light globe and for opening the door when she locked her keys inside. My neighbor will do that for me and I give him pot plants and a pot of not very good home made jam!
    Rae
    25th Aug 2017
    8:13am
    Thanks Lark. A family member jumped into one of these villages and bitterly regrets it as they can't afford to get out and rebuy the type of home they had before the initial move. They will be broke on a pension and unable to afford the fees in around ten years with no way out as they have lost the savings of decades from the move.
    They also lost their part pension and associated concessions. Medical costs are starting to weigh down now too as they are back to paying full costs for services and medicines. The extra cost of this is over $100 a week.
    MICK
    24th Aug 2017
    5:44pm
    I have not heard of try before you buy in this sector. The bad operators would never allow this for the obvious reason but I suspect living in one of these places for a year might be exactly what is needed.
    This is an area where governments could legislate to make it mandatory to rent to prospective clients unless all places were filled. Unlikely that the current government would do that given it is getting electoral donations from the owners of these miserable places.
    Anonymous
    24th Aug 2017
    7:02pm
    usual comment of our labor micky "current government" when does this labor clown gets down to some real helpful hints to the questions asked in these columns, he told people renting his properties to go and live in the never ever unless they were willing to pay the rent increases he demanded for his properties on the exuse they did not know what they were talking about in one of YLC former columns and yet here he is accusing people of taking advantage of pensioners in these villages, yes I agree that unless you take your time to look into the terms stated for living in one of these villages, after all would you buy a house without consulting a sollicitor unless you are one, would you buy a car without trying it out, would you buy a boat without putting it in the river or sea before you hand over your dough? of course not, it does not matter which government is in power, thread your own path and use your grey matter before putting pen to paper.
    another warning, which was displayed in a former column of YLC on an earlier matter was "be afraid, very afraid of buying a unit on ground not owned by you" as the ground can be sold anytime from under you!
    Pink Panther
    24th Aug 2017
    6:12pm
    Thank you Lark Force. I think a lot of peoe would agree. You were able to get put but I simply can't afford to. Ho hum will have to just make the most of it I suppose.
    Tib
    24th Aug 2017
    8:02pm
    Wouldn't touch a retirement village, we were thinking of buying into one so we investigated quite a few. Every single one was a ripoff, some very nasty charges and once your in you can't afford to get out. The small town I live in has heated pools bowling greens library cinema mostly provided free or cheaply by council. I can get my lawn mowed by jims mowing for a lot cheaper than the exorbitant fees charged by retirement villages. No thanks they can rip someone else off.
    Grey Voter
    24th Aug 2017
    9:27pm
    Anyone not so grumpy and more willing to enjoy what we've got left on this Earth ? :-) I agree to some extent that buying into a retirement village is not the best financial investment in the long run, but how long a run does one have left ? You cannot take anything with you and you might as well enjoy it. As someone said to me lately: HEARSES HAVE NO TOW BARS !!! Must go now because tomorrow we have an evacuation drill at the village and must go to bed earlier than usual. Then dinner at 7.00pm at the clubrooms, Saturday a birthday party followed by lunch at a lovely brewery on Sunday. Don't forget to keep worrying out there :-)
    Rae
    25th Aug 2017
    8:27am
    Yes village life can be great for those able to afford the fees and charges and who are socially inclined with the patience to ignore the rules and foibles of living with a group of elderly people.

    Like one of those world cruises I suspect. Everything moving at a snail's pace but lots of activities to choose from and requiring a hefty income to boot.

    How long a run is indeed an unknown but if you can afford the long run and enjoy the lifestyle these villages are terrific.

    It is one of the reasons many older wealthy cruise so often. Similar situation but with everything catered for including the excursions.
    Priscilla
    25th Aug 2017
    11:11am
    It would seem the better retirement villages are in Victoria. I would be happy to downsize but am not interested in getting involved with body corporate sytle living and definitely need to own the land on the propert I purchase. Also retirement villages have too many restrictions from what I have been reading. Also who knows how much daily fees etc will rise in the future. Another big drawback is that the laws are constantly changing. Not for me.
    fearlessfly
    25th Aug 2017
    4:32pm
    We have recently been looking at downsizing into a "Lifestyle Village", and thanks to the AVEO scandal, have our eyes been opened ! You can forget a normal Retirement Village for us, we will ONLY consider a facility that has NO DMF, NO leasing of one's overpriced "dogbox" - purchase only, and does NOT take a cut of the capital gain if you sell later. I'd also be scrutinising the "Fees" extremely carefully.
    Blossom
    27th Aug 2017
    7:48pm
    I live in a Stockland owned Retirement Village. At this one you can try "before you buy". One lady moved in on that basis and was so happy she signed a contract within a week. I have been here 4 1/2 years and the fees have gone up once.....3% I'll guarantee that Community Lighting (street lighting) and electricity for our clubhouse has gone up more than that, as would Public Liability Insurance, Council and Water rates that they pay. We don't have as many rules as a lot of other Retirement Villages do.
    Lark Force
    30th Aug 2017
    7:51am
    How many Residents of these villages would like to leave but can't? Negative publicity like this (see abc link) won't help sales. Then again these reports might help others avoid the trap that they find themselves in. Here's more of what I said on an early post from todays ABC news.
    http://www.abc.net.au/news/2017-08-30/lendlease-accused-price-hike-reducing-service-retirement-village/8853030