If you live in an over 55s community, it’s highly likely your contract will include some rules surrounding how you can sell your home.
Retirement community contracts come in many shapes and forms, and each will include a set of requirements that you’ll need to follow when you choose to sell your home. These conditions can affect the sales process from start to finish – this includes everything from who you can employ as your selling agent, right through to who is allowed to purchase your home. Plus, in some villages you may also be up for additional expenses like mandatory renovations before vacating or departure fees. But the good news is, that not all retirement communities make selling your home a complicated and expensive process. Here we’ve outlined the most common contract terms that will affect your sale, and explain what they mean for you if you decide to sell.
Who Can Sell My Home?
When you put your house on the market – be it a retirement community home or regular sale – one of the most important decisions you’ll make is choosing an agent to manage the sales process. The ideal agent is someone you feel comfortable with, can communicate effectively with and who’ll get you the best possible sale price.
Usually, retirement community occupants will have the option of either selecting their own external estate agent or allowing the retirement village operators to handle the sale. Be sure to check your contract to make sure you have that choice. If the village operators manage the sale, you’ll save yourself the hassle of finding an agent, but there’s a chance they may not put your interests before theirs. If you choose to sell through an external agent, you’ll have more control, plus, the village operator cannot charge a fee or commission for the sale.
Who Can Buy My Home?
Whether you sell your home through an external agent or not, retirement village operators do have a say in who you can sell your home to – and who you can’t. This is usually written into the contract so the village operators can make sure that any new occupants are a good fit for the community.
This can cause headaches – if your estate agent finds a buyer and the village operator doesn’t approve, the sale can be blocked and may not go ahead. If you live in Victoria, the Victorian Civil and Administrative Tribunal (VCAT) is the place to contact if you need help to resolve any disputes. If you’re selling through an external agent, they must advise you in writing before you sign the contract if you are required to pay a commission on any sale that is blocked by the operators.
What Fees Will I Have to Pay?
There are many different retirement village contracts, and it will depend on your individual agreement whether or not you’ll need to pay certain fees when you sell. Some retirement villages charge deferred management fees, also known as departure or exit fees, and if you are liable to pay them, you will end up handing over a significant amount of your profits to the village operators. Departure fees are usually calculated as a percentage of your sale price, and can be as high as 30%, and it’s not uncommon for retirees to get a shock when they learn they have to part with a large chunk of their money when they sell.
It’s possible to avoid paying these fees, as there are retirement communities, such as Village Lifestyle Park, that do not charge deferred management fees. It’s important to note that exit fees are usually written into the contract as a small percentage per year, and because it’s not seen as a dollar figure, it’s easy to underestimate how much you’ll end up paying. This is why it’s highly recommended that you obtain legal advice before signing any retirement village contract. That way you’re clear on all the fees that will apply – when you move in, during your time as a resident, and when you move out.
Not all retirement village contracts are the same –and many are complicated and difficult for the average person to understand. But it’s important that you are aware of all the legal and financial obligations you are agreeing to, throughout all of the stages of your occupancy, before you sign. If anything is unclear, seek expert legal advice. That way, you can choose the retirement community that is right for you – both now, and in the future. When you know your contract, if you decide to sell, you’ll know exactly where you stand when it comes to choosing an agent, finding a buyer and paying departure fees – and you’ll avoid any nasty surprises.
Over to you
Have you ever sold a home in a retirement community? We’d love to hear your thoughts, ideas and experiences.