You may have to pay a significant amount when you leave a village. This may be called a deferred, departure or exit fee. There can also be recurrent fees that continue after departure.
Such fees are one way that commercial retirement villages generate a profit, and not-for-profit villages improve their services or subsidise recurrent charges.
The fee may be part of your purchase price, deferred until the end of your occupancy to allow you use of your money while living in the village. Alternatively, a set amount of your ingoing contribution may be non-refundable.
These fees can be complicated and often depend on variables such as how long you have been in the village. The fee cannot be calculated as a dollar amount until you have left your unit and a new resident has made an entry payment or a valuation has been obtained.
The deferred fee is usually calculated as a percentage per year of either:
- your ingoing contribution or purchase price
- the new resident’s ingoing contribution or purchase price.
These fees are usually calculated up to a specified maximum percentage stated in your contract. For example, if the fee is 2.5 per cent per year up to a maximum of 25 per cent and you are there for 10 years or longer, the most you will be charged for the fee is 25 per cent. This will be deducted from the amount you get if you leave.
Last updated: 30/04/2012