Let’s talk about the F-word – fees!
Moving into a retirement village is a major life decision, so at Aura Holdings we believe it is essential that you fully understand what is involved in the process, including the fees.
An unfamiliar concept for many retirees considering village living is the deferred management fee (DMF) - often referred to as an exit or departure fee. Put simply, the DMF is the fee you pay when you leave the village and is calculated on the time spent in the village and the sale price of your apartment.
Unlike residential apartment developers who end their relationship with buyers at the time of sale, retirement village providers have ongoing operating responsibilities, including the refurbishment and capital replacement for their villages and their residents’ apartments.
The DMF should be considered a deferred contribution to all the community facilities that residents enjoy and the refurbishment and replacement of those facilities. It also allows you to defer paying the costs for any capital related to the upkeep of the village’s building and your apartment. This ensures the protection of your asset, so your apartment will achieve the best possible resale price because the village has been maintained to a high standard. Retirees should take the DMF into consideration when factoring in the absence of the ongoing costs of repainting, renovating and repairing your current home as Aura, under its contract, will take responsibility for these expense around the village and your apartment. Look at the DMF as enjoy now – pay later!
Aura residents also share in the capital gain on their apartment and we do not charge refurbishment costs such as painting and new carpets when it comes time to sell. We also do not charge commission fees or additional exit fees for sales and marketing, but we will pay your legal fees associated with the sale of your apartment.
Some senior living providers advertise “No DMF’’ but when a resident sells they personally face unspecified expenses for the refurbishment of their property. Also without available funding from the DMF to cover the capital costs associated with the upkeep and replacement of community facilities and buildings, these villages can fall into disrepair and have reduced appeal to potential buyers.
“Lifestyle resort’’ operators are not covered under the Queensland Retirement Villages Act so are not obliged to buy back apartments after a specified period of time. These residents can be required to continue paying expensive weekly service charges and refurbishment costs if their property remains unsold. In an Aura village, you only pay the weekly general services charge (GSC) up to 90 days after you vacate your apartment, plus we will buy back your apartment if not sold within 18 months.
Weekly fees in a lifestyle resort can increase at the operator’s discretion, however, the fees in retirement villages are entrenched in legislation and cannot rise above CPI.
While most retirement villages have a DMF not all are the same – that is why independent advice is crucial. It is also vital to question what additional costs and special levies residents face at their departure from their village or lifestyle resort.
Moving to a retirement living village is very different from other forms of property. Village living is all about the lifestyle, security, convenience and being part of a community of like-minded residents. Aura Holdings Director Mark Taylor says the decision to move into a retirement living village should not be considered a financial investment. Mark describes the DMF as a lifestyle fee – money spent on your lifestyle. “What price can you put on all the support, care and social connection you’ll enjoy?’’ Mark asks.
At Aura we believe the deferred management fee will help you age well, with more money available to you in your retirement, enjoying your own independent apartment with state-of-the-art facilities in a safe and supportive village, without the ongoing costs and upkeep of the family home.