Management company question...
Discussion
TBH this is an idle curiosity question rather than something urgent...
Last week we went to look at a 'retirement community' bungalow (not McCarthy and Stone crooks!) and one of the incentives to get you to sign on the dotted line was "...no service charges for life...". On the face of it that is a rather amazing offer and (even at today's prices) would amount to at least £75,000 saving (assuming you survive until your 80s!!), but then the cynic in me starts questioning: what if the management company goes bust/is taken over - does the new entity still have to honour the old deal (I would imagine not but...)?
oops - amended to say SERVICE CHARGES rather than management fees, apologies
Last week we went to look at a 'retirement community' bungalow (not McCarthy and Stone crooks!) and one of the incentives to get you to sign on the dotted line was "...no service charges for life...". On the face of it that is a rather amazing offer and (even at today's prices) would amount to at least £75,000 saving (assuming you survive until your 80s!!), but then the cynic in me starts questioning: what if the management company goes bust/is taken over - does the new entity still have to honour the old deal (I would imagine not but...)?
oops - amended to say SERVICE CHARGES rather than management fees, apologies
Edited by DodgyGeezer on Saturday 1st August 18:07
Love the way these businesses try to screw vulnerable people over with complex financial agreement clauses.
It's almost as if they see the punters as ripe for plucking.
I'd want to know how much that would save at death / selling by year.
I'd want to know the precise getouts that were written in.
I appreciate that they are selling and you are buying, but a bit more honesty and good behaviour wouldn't go amiss.
OTOH it may be a fantastic deal offered by a desperate seller, who knows?
It's almost as if they see the punters as ripe for plucking.
I'd want to know how much that would save at death / selling by year.
I'd want to know the precise getouts that were written in.
I appreciate that they are selling and you are buying, but a bit more honesty and good behaviour wouldn't go amiss.
OTOH it may be a fantastic deal offered by a desperate seller, who knows?
Whilst it might be a good offer ( as above check the small print ) the wider issue is resale.
Service charges play a part in this yes , and some have very high charges which undoubtedly play a part but so does supply and demand.
My mother in law had one. We refurbished and furnished it back to show home standard and it was the first of 8 to sell ( at about half what she paid ). The 8 was the main issue. And the 8 for the block beach door and the block after that.
Old people die. This one was built some 8 years ago and they died in waves with large volumes of then in the market and demand mostly satisfied by the new sales who are masters of overcoming objections and issues. Px. Moving service. Declutter service etc which a private seller can't complete with.
Service charges play a part in this yes , and some have very high charges which undoubtedly play a part but so does supply and demand.
My mother in law had one. We refurbished and furnished it back to show home standard and it was the first of 8 to sell ( at about half what she paid ). The 8 was the main issue. And the 8 for the block beach door and the block after that.
Old people die. This one was built some 8 years ago and they died in waves with large volumes of then in the market and demand mostly satisfied by the new sales who are masters of overcoming objections and issues. Px. Moving service. Declutter service etc which a private seller can't complete with.
There are a number of different ways the IRC s tend to work. Service charges and management fees in the one I am involved with ( on the board) are held low and recovered when we buy back the apartment (New Zealand model). The dfm exists to recognise that retired residents are usually cash poor but have money tied up in the property.
The key is choose the right operator/developer. Do not ignore the scare stories but do not assume they are all the same.
We are a charity and the largest developer and operator of IRC s in the uk. We have 14 large villages, guaranteed buy back and waiting lists for every village. We have long leases(sale) a few rented units and affordable units (all tenure blind). Our model protects the buyer, meaning that when we launch a new Village, sales rates are circa 30 a month. (Most in the sector can only hit 4 a month at best)
Ideally, you need an operator who also owns the asset, they have a vested interest in maintaining the building to a high standard. As a charity we are able to subsidise these costs. Try to avoid those who leave you with the apartment to sell at the end, watch out for large event fees when the sale risk sits with you. Ask about occupancy levels and resale void times if you are carrying sales risk. Again if the sales risk is yours, look at the market for those and actual prices achieved.
IRC s are great places when done well, they extend independence, address loneliness, are safe and secure, remove the worry and hassle of maintaining a property, free up family houses so families can buy them. Our residents genuinely love the communities we have built.
The UK is way behind leaders like NZ and the USA when it comes to retirement living. In NZ, retirement developers are in the top 5 house builders by volume.
Op. The devil is in the detail. If you were seriously looking at it and if I am not conflicted, I can look through the terms for you and highlight the risk areas.
IRC s can be fantastic, don t think they are all the same, choose wisely, eyes open.
The key is choose the right operator/developer. Do not ignore the scare stories but do not assume they are all the same.
We are a charity and the largest developer and operator of IRC s in the uk. We have 14 large villages, guaranteed buy back and waiting lists for every village. We have long leases(sale) a few rented units and affordable units (all tenure blind). Our model protects the buyer, meaning that when we launch a new Village, sales rates are circa 30 a month. (Most in the sector can only hit 4 a month at best)
Ideally, you need an operator who also owns the asset, they have a vested interest in maintaining the building to a high standard. As a charity we are able to subsidise these costs. Try to avoid those who leave you with the apartment to sell at the end, watch out for large event fees when the sale risk sits with you. Ask about occupancy levels and resale void times if you are carrying sales risk. Again if the sales risk is yours, look at the market for those and actual prices achieved.
IRC s are great places when done well, they extend independence, address loneliness, are safe and secure, remove the worry and hassle of maintaining a property, free up family houses so families can buy them. Our residents genuinely love the communities we have built.
The UK is way behind leaders like NZ and the USA when it comes to retirement living. In NZ, retirement developers are in the top 5 house builders by volume.
Op. The devil is in the detail. If you were seriously looking at it and if I am not conflicted, I can look through the terms for you and highlight the risk areas.
IRC s can be fantastic, don t think they are all the same, choose wisely, eyes open.
Edited by blueg33 on Sunday 2nd August 03:31
OIC said:
Love the way these businesses try to screw vulnerable people over with complex financial agreement clauses.
It's almost as if they see the punters as ripe for plucking.
I'd want to know how much that would save at death / selling by year.
I'd want to know the precise getouts that were written in.
I appreciate that they are selling and you are buying, but a bit more honesty and good behaviour wouldn't go amiss.
OTOH it may be a fantastic deal offered by a desperate seller, who knows?
Don’t tar all with the same brush. The best ones are open and transparent, we even have resident representation on our board!It's almost as if they see the punters as ripe for plucking.
I'd want to know how much that would save at death / selling by year.
I'd want to know the precise getouts that were written in.
I appreciate that they are selling and you are buying, but a bit more honesty and good behaviour wouldn't go amiss.
OTOH it may be a fantastic deal offered by a desperate seller, who knows?
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