The types of contracts provided by retirement villages in South Africa

Considering investing in or moving into a retirement village?

These are typically the types of contracts offered by retirement villages in South Africa, which cater to different needs and preferences…

Life Rights: This is the most common type of contract in retirement villages. It grants the resident the right to live in a specific unit for the duration of their life. The ownership of the property remains with the developer or the managing company. Upon the resident’s death, the life right reverts back to the developer, who can then sell it to another resident.

Sectional Title: This type of contract involves owning a specific section of a property, similar to owning a unit in a sectional title scheme. The resident has ownership of their unit and shares ownership of common areas with other residents.

Full Ownership: In this arrangement, the resident owns the property outright, including the land and the building. This type of contract provides the highest level of ownership and control over the property.

Long-term Lease: Retirement villages may offer long-term lease agreements, typically lasting decades. This allows residents to live in the property for an extended period without owning it outright.

Share Block: It involves purchasing shares in a company that owns the property. The resident has the right to occupy a specific unit based on their shareholding.

These contracts provide various options for residents to choose from based on their financial situation, lifestyle preferences, and long-term plans. It’s important to carefully review the terms and conditions of each contract and consult with a legal expert to ensure you understand your rights and obligations.