By Essie Bester
Investment in a retirement resort is an important life decision that calls for extensive research and serious contemplation. It is imperative to remember that although it could possibly be the last house in which you will invest, it is probably the place that you will be calling home for decades – it must consequently satisfy all your specific needs. Therefore, make sure that you don’t simply pick the first retirement resort that looks nice to you.
Experts say you should take note of the following:
A retirement resort may have all the necessary facilities and conveniences, but location is vitally important when you invest in property. You must look at the proximity of medical facilities, shopping centres, entertainment and transport networks.
- The developer and the body corporate
Thoroughly research the developer, especially if the resort is still in the development phase. Make sure that the developer is financially sound and has a good history of similar developments. Look at the building material and make sure that the construction companies and architects working on the resort are properly accredited.
Find out what the developer’s legal obligations are regarding the erection of facilities, such as an administration building, community centre, care unit, security and other communal areas.
Make sure that management know what they’re doing. Good management runs from the body corporate of the resort to its manager.
Find out what the duration is of residents’ terms on the body corporate – residents often stay on the body corporate hopelessly too long and can no longer handle the challenges that come with it.
Watch out for bodies corporate that make wrong financial decisions because they were not properly thought out (such as short-term decisions that could be detrimental over the long term), or wrong decisions taken because bodies corporate feel pressurised by residents they want to please.
Rather pick a retirement resort with a professional approach that appoints a capable manager who follows strict rules that will benefit all the residents.
Study the resort’s constitution to determine the body corporate’s legal position, goals and aims as well as the financial framework within which it functions.
The care unit is a very important aspect of a retirement resort.
Are you guaranteed care when you will need it?
Does the care unit provide 24-hour service?
What support services are offered for home care?
Is the care unit situated on the same premises as the resort?
Is the care unit registered with the Department in terms of the Older Persons Act?
A high levy does not necessarily mean that you will get everything you pay for. Make sure that you know exactly what is included in the levy because this is an ongoing cost that is supposed to make your retirement easier.
Things that you should consider are maintenance and insurance costs, garden services, internet access, security, health-care options and the use of the resort’s facilities.
Find out about the monthly levies for the care unit as well as whether there are additional costs for permanent care in the unit.
Get prior clarity about the annual increase in levies.
Enquire about the increase in levies over the past few years.
Make sure that the resort you decide on has a levy stabilisation fund that comes from the profit on the sale of units or from other sources to keep levies reasonable.
When you invest in retirement property, you should consider long-term health limitations rather than your present capabilities. Look at elements such as stairs and the lay-out of the house. Even a single stair, slight incline or uneven floor can cause numerous problems later on.
Make sure that the resort makes allowances for “younger” senior citizens and an independent lifestyle. There must also be sufficient opportunities for social interaction with other residents and residents’ children and other guests must be welcome.
Make sure that orientation is available to explain to clients the steps, services, communication and available technology that can be expected at the resort. You want to know what is available to you in the various stages of growing older.
Currently the two main purchase models regarding retirement properties in South Africa are sectional title and usufruct. In terms of the usufruct model you invest in a house for the rest of your life, but in reality you don’t own the property.
A sectional-title scheme is regulated by the Sectional title Act, which enables you to buy part of a property, such as an apartment. The interests of the members of a sectional-title scheme are represented by a body corporate. They draw up rules and regulations that cover everything from pets and noise levels to maintenance requirements and the monthly levy.
Each scheme has its own pros and cons. Familiarise yourself with the framework within which the specific property is sold and how it affects your rights.