Retirement village living: Pros and cons
2014/11/21

"In our 50s and even early 60s we give little thought to how and where we are going to spend our senior years."

We should, in our mid-50s and possibly earlier, be putting our names down on one or two retirement village lists - if we intend to move to a communal retirement centre.

The decision as to whether to stay on in one's home, possibly down-size to a smaller freehold property, move to a cluster or townhouse complex, or purchase a unit in a retirement village is a very personal one.

In South Africa, we are spoilt for choice when it comes to retirement villages. One can spend upwards of R5-million on a three-bedroomed house or apartment with a heated pool, gymnasium, snooker room, 100-seater theatre, sauna etc. in other words, a five-star retirement hotel. Or one can, alternatively, choose a smaller complex offering one, two or three-bedroomed cottages with a garage.

The question one has to ask is, "Can I cope with communal living?" Those relocating from large freehold properties will find the change more difficult.

Retirement complexes are marketed either as full or sectional title, share block or as a life right.

Full title and sectional title are a purchase that involves registration at the Deeds Office, with transfer duty payable on the purchase.

Share block involves the purchase of shares in a property-holding company. Prior to buying into a share block complex, it is important to have studied the company's memorandum and articles of association.

The life right option is the purchase of the right to live in a specific unit. It is a real right, giving one security of tenure for the remainder of one's life. In the case of a married couple, until the second-surviving spouse dies. There is no transfer duty or VAT payable and there are no registration fees. This option can best be seen as a lifetime of rental paid in advance.

Prospective buyers should investigate and satisfy themselves of the financial soundness of the organisation.

The majority of retirement villages throughout South Africa will offer the following:

> Accommodation in 1, 2 or 3-bedroomed cottages or apartments with garaging or parking spaces.

> A frail care centre - euphemistically named the 'Health Care Wing' in one of Cape Town's villages! Here one receives 24-hour nursing care with qualified sisters on duty round the clock. The centres cater for two types of 'patient' - those who are unable to fend for themselves in their own cottage and others who need a week or two in which to recuperate from an operation before returning to their own unit. Usually the centre also contains a clinic, open daily and available to all residents of the village for injections, blood pressure and minor ailments.

> The 'assisted living' option is increasingly being offered in many villages. Here one moves from one's home to a self-contained bed-sitter or bedroom and living room. Meals are provided in communal facilities and nursing staff are available to assist when needed.

> All retirement complexes have a communal centre with dining room and lounge. In most, there is a library run by the residents and, increasingly, a bar or entertainment area where regular get-togethers are held.

> As a rule, lunch is offered daily and, in several villages, a number of free meals are included in the monthly levy. Braai's, special lunches and other celebratory occasions are held regularly.

> Sporting facilities offered are dependent on the location of the village. A swimming pool is almost universally provided.

> Dependent on location, a chapel may be built. Alternatively, provision is made for weekly multi-denominational church services.

> Dependent on residents' input, bridge, garden chess, travel and other clubs exist and, more often than not, flourish. Bingo, general knowledge quiz and film evenings are also held, as are musical events.

The above costs money and in all retirement villages a monthly levy is charged, the amount varying from centre to centre. Included in the levy are the costs of house insurance, security, maintenance of the common property, employment of security/garden/maintenance staff, refuse removal, and, most importantly, employment of a General Manager to manage all matters relating to the successful administration of the complex.

There are definitely drawbacks.

> Down-sizing is difficult. Family heirlooms will most probably be kept but decisions have to be made regarding the retention or disposal of well-loved pictures, furniture etc.

> Lack of privacy. This is certainly a perception, though seldom a reality.

> A feeling that one is duty-bound to participate in village activities.

> Loss of independence - possibly an apprehension that one will feel boxed-in, bound by 'rules and regulations'. In fact, the degree of independence is dependent on each person's approach to life. One can live in a retirement village and do one's own thing or else participate to a greater or lesser degree in village activities.

> Lack of security. Moving from a freehold home with an armed response alarm system, slam-lock security gates, booms and beams and burglar bars one moves to a village, safeguarded only by an electrified fence and security guards at the entrance gate. And yet, surprisingly, village residents find that they have a greater sense of safety and protection than they had before.

> The ruling on pets. Some complexes allow a small dog and/or a cat and one is allowed to replace one's pet on the death of the original animal. Other villages will not allow a replacement. Most will not allow pets at all.

The terms of the contract when one purchases a unit in a retirement village are of extreme importance, as are the terms relating to re-sale. Whether you are the holder of a Life Right, own shares in a share block scheme or own a sectional title unit there is no stipulation in the legislation governing retirement villages stating how much you must be repaid when your unit is re-sold.

Every retirement village established under the Housing Development Scheme for Retired Persons Act is required to state, in a document with which you must be provided, prior to signing the initial contract, the percentage of the purchase price to be paid to your estate.

The terms vary greatly.

SA Property Investor