GUIDE TO CHOOSING A RETIREMENT HOME
Finding the right home is one of Retirement's BIG questions. There is an enormous variation as to what is on offer from one retirement home or village to the next. From freestanding cottages and units to frail care and assisted living, plus a host of recreational amenities such as the clubhouse, restaurants and sports facilities. In addition, moving into a retirement facility can be very stressful and emotional. Consider these factors before making a decision...
Decide on a location Deciding on where to retire is a big decision. However, this decision is a critical one, and one that can make all the difference to your happiness, for what could be a long time. You may prefer to stay in your existing community. You may prefer to move closer to family members. You may prefer to move to an area where you have always wanted to live, such as on the coast or in a favoured holiday destination. The decision on where to live should be the first you should make in this new phase of your life and this will help you focus your search criteria and let you shop around to compare options in the destinations you have chosen to look at. You may choose to rent for a period of time, to ensure that you have made the right decision. Think about the following: Decide on a list of five locations that you would like to live. Visit each location, looking at the area objectively and through the eyes of a resident. Think of the following when considering a location:
1. What facilities do you require? 2. What lifestyle elements are you looking for? 3. Do you wish to be close to family and/or friends? If you are still undecided, create a list of pros and cons for each area and this may help you narrow down your choice.
Waiting lists Many retirement villages and homes have lengthy waiting lists. To get on to the waiting list, you generally need to put down a deposit, which is usually deducted from the price of the home that you buy. If you decide not to buy a house in the village, it is usually non-refundable. The process usually works that the top 10-100 names on the list are contacted when a vacancy becomes available. YEI's tip: Best to get your name down on a retirement home or village's waiting list as soon as possible, as early as in your 50's, or even in your 40's. Retirement Matters
Buying into retirement property - understand the different types of ownership? When buying into a retirement property, it is essential that you understand the types of ownerships of retirement properties that are on offer, and that best suit your needs. There are three ownership options available to you when buying retirement property -
- Sectional title, share block and life rights. Sectional Title Registration of a sectional title property is very similar to other sectional title purchases. Registration of the property is concluded through the Deeds Office and needs to be done by a conveyancer. There are the usual sectional title costs and fees involved which is transfer duty and conveyancing attorney fees. As the owner of a sectional title unit, you will automatically become a member of the body corporate - this will afford you the opportunity to be involved and have a say as to how the scheme is run.
- Share Block Scheme A company owns the retirement building and allocates a number of shares to that building - these are divided into blocks of shares. If you become the owner of shares in this company, you then have the right of occupation to certain portions of the building. Therefore, share block residents own shares in a company and not a section of the building. It can happen that a share block scheme is converted to sectional title. In this case, 30% of the owners in the scheme have to vote to convert. After the conversion takes place, at least half of the owners must support the resolution. Once this has happened, you will take transfer of your unit and will become a property owner, instead of a share owner.
- Life Rights With life rights, you do not own the property. Buyers have the right to live in a property - this in terms of the Housing Development Scheme for Retired Persons Act. If the investors in a life right scheme are married, the life right agreement extends to their spouse. When either one of you dies, the surviving spouse has the right to continue to occupy the property. When buying into a Life Rights Agreement, there are no legal costs, transfer duties or other taxes payable in this option. You need to establish the total value of the refund when your Life Right comes to an end. You also need to enquire if there is a sliding scale for the refund amount of a Life Right, based on how long you have lived in the unit. Find out how and when the refund will be paid, and who is responsible for the resale of the Life Right?
It is imperative that you research each of the options and implications of the sale prior to committing yourself. The retirement village itself or the estate agent is in a position to provide all relevant information about what sale options are available.