When going into being retired you would think that things will now take place smoothly, and be beneficial towards the retirees with new rules and regulations set in place. This does not usually take place, and what the new legislation and regulations are enforcing may be rather averse when it comes to what can be the very last transaction of property that is likely to go their way. Many retirees invest in these retirement villages to normally gain something when they leave the place, but many have not been so fortunate. With different types of fees being charged, and the deduction of operators share, and key pointers in the contract only result in losses rather than gains.
Issues of transparency
Many retirees move to these villages to be able to live peacefully without worrying about any stress. To a certain extent this can be true. They are provided with security, have other citizens of similar ages, and thoughts living in the same compound resulting in more companionship, and is also considered the best for downsizing. With this comes the drawbacks. Many of these communities are tough to compare with one another to make a tactful decision. They come with initial process that require you to go through thick papers of contracts which may not make sense, and also have to look out for any underlining fees that have to be paid which are not all that transparent.
With new and large players coming into the retirement villages market, the industry has been booming, and been rather profitable. While it is understood that retirees buying a property in a village is not a decision of investment, it is necessary to investigate, hire the necessary lawyers to represent you, and make sure you are being taken well care of rather than being ripped off. It is necessary to thoroughly read through contracts no matter how complex they are before signing on any dotted line.
What usually happens is that retirees will have to pay about 70 percent of the value of the house, while the operator pays the rest once the lot is resold. This is not the case anymore. Operators now quote values that are equal to the full market value of house in retirement villages in NZ and then charge more as deferred management fee. Many people are being ripped off, but amendments are being made to take care of this situation.
Money to be left
When the time to resale the unit comes into the play, the amount which has to be paid is calculated. This payment usually added in with the departure fee has to be made while moving out. Usually how this figure is calculated is by the amount of DMF that has been calculated per annum over the years. Also the past occupants have to refurbish the homes as per the contract before they leave too. Meaning walls have to be painted, and maybe some new fixtures must be fixed in.
Many may think residing in a retirement community is a walk in the park, and that people there have no troubles, but this is not the case. Financially, these elderly folks are drained and cheated by many.