Financial Terms
What else do I need to know?
Outline of the financial terms of an Occupation Right Agreement
An Occupation Right Agreement has become the most popular means of acquiring an interest in a dwelling at a retirement village.
An Occupation Right Agreement is not a registerable interest in land; it is a contractual arrangement only and gives a resident the right to occupy a dwelling at the Village while you are able to live independently, to use the community facilities within the Village and to receive, if necessary, and at your cost, a range of services. When you move into the village you will pay an Entry Payment. On termination of a licence and when a new licence has been issued you will get an amount equal to the Entry Payment back, less a Village Contribution, which is 30% of the Entry Payment.
The Village Contribution is an amount payable by you for the supply of accommodation and the use of the common facilities. The Village Contribution will be an amount equal to 7.5% per annum for 4 years of the Entry Payment that you made to a maximum of 30% and calculated on the commencement date on a daily basis.
By way of example, if you move into a villa and your Entry Payment payment is $600,000 and you stay in the village for ten years, you will receive back $420,000. If on the other hand you were to leave after 24 months, you will receive:
| Entry Payment | $600,000 |
|---|---|
| Less village contribution @ 7.5% for 2 yrs | $90,000 |
| Total refunded | $510,000 |
The 30% village contribution covers the cost of providing the infrastructure and facilities, administration, legal and marketing costs for ongoing village marketing and the relicensing of the dwelling. Damage over and above normal wear and tear may attract an added cost.
Serviced Apartments Contribution: The Village contribution for the Serviced Apartments differs from the independent living villas and apartments. The Village contribution is an amount equal to 30% of the entry payment. 10% accrues on the commencement date and then 10% accrues each year to a maximum of 30%.
You will receive back an amount equal to your Entry Payment (less the Village contribution, and if necessary the cost of repairing excessive damage once the dwelling is re-licensed to a new resident).
In addition, you will pay a weekly fee (debited monthly) to cover the village outgoings such as rates, insurance, rubbish removal, gardening, lawn mowing, repairs and maintenance to the outside of the house, repairs and maintenance of the facilities, 24-hour emergency call, security etc. This amount is set for cost recovery only and is reviewed each year to take into account changes in costs. You will also have to pay for any additional care services that you require. Serviced Apartments have an additional weekly cost for their service package.
Full details concerning the Occupation Right Agreement are set out in a Disclosure Statement for the village. Also available on request is the Code of Residents Rights and the Deed of Supervision between Althorp Village and the Statutory Supervisor, Covenant Trustee Services Ltd.