A retirement development specialist is warning buyers on such schemes to beware unexpected clauses or restrictions which they may not have expected.
John Lavin of Cognatum - a firm that has 60 retirement estates in 21 counties across central and southern England, with a total of 1,500 retirement properties - says there are several key clauses which unwary buyers may not be familiar with.
“The first thing to check is the length of lease. Leases can obviously be extended, but the process can be time-consuming and expensive. Be cautious of a lease that has under 100 years remaining as this can have a significant impact on the resale value” he says.
Lavin then adds service charges and ground rent as vital items which a buyer should check, especially in light of recent publicity surrounding rapidly-increasing ground rents.
He also suggests investigating a development’s reserve fund covering irregular costs or significant items of planned maintenance.
“A good estate will work on a rolling cycle, so the amount in the reserve fund will vary depending on where it currently is in the cycle. Check how the reserve fund is organised and assure yourself you’re happy with the arrangement” he advises.
Separately from costs, he cautions that buyers must check lease clauses for various controls: in his own developments, he offers long leases with no ground rents and no restrictions on owning a property, except that one resident must be over 55 years of age - but not every retirement scheme is the same.
“Do check these carefully to be sure you’re buying into a development that suits your lifestyle. For example, most retirement estates allow pets, but don’t assume – check. Your solicitor should walk you through a lease before you buy a property, but it’s a late stage of the buying process to be getting surprises. The best plan is to ask if you can see a lease before you make an offer, and read the detail carefully before committing yourself.”