Land Lease Living Affordable Lifestyle Living | Page 12

Compare Land lease communities and traditional retirement villages are both designed primarily for retirees who live independently and are seeking the security, friendly social environment and facilities of an age appropriate community. However, there are differences. The main differences between residential land lease communities and retirement villages are the type of contractual arrangements, their level of affordability and the legislation governing their operation. Land lease Communities 3 Home owners in Residential Land Lease Communities have a site agreement with the operator and pay a site fee of between $120–300 each week. Pensioners are able to offset part of this cost through the Commonwealth Government’s Rental Assistance scheme. 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 they generally sell the home to an incoming purchaser. The Act: The NSW legislation relating to land lease communities is the Residential (Land Lease) Communities Act 2013, administered by NSW Fair Trading. 10  Land Lease Living Traditional Retirement Villages 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. Although pensioners may be eligible for Commonwealth Government Rental Assistance, this only applies if the price paid to enter the village is below $203,000 (as at July 2017). When the resident leaves the village their original inbound payment is refunded – less applicable exit fees (also known as a Deferred Management Fee); there is a large range of exit fees which sometimes can be up to 35% of the original entry price. There are also strata retirement villages where residents purchase the freehold to a unit or villa within the village. In these instances residents, as unit owners, pay fees to the owners corporation and enter agreements with the village operator to pay for personal services. The Act: The NSW legislation relating to Retirement Villages is the Retirement Villages Act 1999, administered by NSW Fair Trading.