LAND LEASE LIVING
Land lease communities and traditional retirement villages have many similarities – both are designed for retirees who live independently and are seeking the security, friendly social environment and facilities of an age appropriate community.
|WHAT THEY OFFER||LAND LEASE COMMUNITY||TRADITIONAL RETIREMENT VILLAGES|
|Provision of a private secure and friendly community environment for retirees.||Yes|
A land lease community is a managed community. The law about land lease communities is regulated by NSW Fair Trading under the Residential (Land Lease) Communities Act 2013.
A retirement community is a managed community for retirees. Retirement villages are regulated by NSW Fair Trading under the NSW Retirement Villages Act 1999.
|Restricted to seniors aged 50+||Most are|
Land lease communities can have working, semi-retired and retired residents – most attract residents aged 50 +. Some land lease communities have residents of all ages. Those directed at the retiree market have age restrictions with rules limiting entry to over 50s or 55s for example.
Retirement villages are primarily for those aged 55+ or who have retired from full-time employment.
|Gardens and recreational amenities||Yes |
Many land lease communities are located within landscaped grounds with resort style amenities such as club houses, swimming pools, bowling greens and tennis courts
Many traditional and modern retirement villages offer resort style recreational amenities and landscaped gardens.
Some land lease communities are gated, with a boom gate and onsite and after-hours security and assistance.
Traditional and modern retirement villages offer onsite management during business hours and on-call access to after-hours security and assistance.
|Exclusively for permanent residents||Yes |
Generally, sites are exclusively for permanent residents. However, some can also accommodate short-term holidaymakers.
Retirement villages are exclusively for permanent residents.
|Maintenance of Common Areas||Yes |
Maintenance of all common areas and facilities is the responsibility of the community operator.
Maintenance of all common areas is generally the responsibility of the village operator. In the case of strata retirement villages, the Owners Corporation is responsible.
Maintenance of the home on the site is the responsibility of the home owner. Under the site agreement home owners have to maintain their homes in good order, consistent with the standards of housing in the community.
In most retirement villages maintenance of homes is the responsibility of the village operator.
In strata villages maintenance of the home is primary the responsibility of the Owners Corporation.
Most land lease communities have onsite management offices and personnel whose role is to coordinate maintenance, administration and community activities.
Most retirement villages have onsite management offices and personnel whose role is to coordinate maintenance, administration and community activities.
Land lease communities are suitable for people who can live independently, however, as people age the community manager may assist them to coordinate additional home care services such as cleaning, home maintenance and meal assistance. These are usually external services that are paid separately by the hom eowner.
Retirement villages are for those who can live independently but the community manager can assist them to coordinate additional home care services such as cleaning, home maintenance and meal assistance on a pay-as-you-go basis.
|Security of Tenure||Yes|
The community operator cannot terminate a residential site agreement without specific grounds; these are clearly set out under the Act and are usually also specified in site agreements. In some limited instances– such as sale or redevelopment of the land, operators can terminate site agreements. However if they initiate such action for these reasons they will have to pay compensation to home owners to assist them in moving.
Generally, the only circumstances that allow for removal of a resident revolve around a breach of the terms of the contract/license or village rules and by-laws.
Home owners in residential land lease communities
Sign a site agreement with the Community operator and pay an average site rental fee of between $120-$300 per week.
Pensioners are able to offset part of this cost through the Commonwealth Government’s Rental Assistance scheme. To find out if you are eligible for rental assistance and the level of rebate you can claim click here.
You also purchase a manufactured home – either new or ‘pre-loved’. The average purchase price for a manufactured home within a land lease community ranges between $100,000 – to more than $300,000 (home costs vary according to the size and age of the home).
When a home owner chooses to leave the community they generally just sell the home to another incoming purchaser.
Residents of Retirement Villages
Have several different contractual models the most common of which are loan/licence or loan/lease agreements. With these agreements, residents pay an entry fee or ‘incoming contribution’, which can range between $300,000 – $1 million+.
The incoming contribution purchases either a long-term lease or a licence, which gives incoming residents a ‘right to occupy’ a unit or villa within the village.
Residents also pay service and maintenance charges which can average between $100- $200 per week depending on the size of the village and the facilities and services that are offered.
When the resident leaves the village their original inbound payment maybe refunded – less applicable exit fees (also known as a Deferred Management Fee).
As an example, if a resident pays $350,000 to enter a retirement village when they leave they are refunded their original contribution less a 35 per cent exit fee of $122,500.
There are also strata retirement villages where residents purchase the freehold to a unit or villa within the village.
In these instances residents become a member of an owners corporation and pay fees. When they leave they sell their unit or villa on the open market.
Type of Contracts – Land Lease Community vs. Retirement Village
(Figures are estimates based as at August 2016)