Village offers parkland atmosphere
held last month about life rights and the value and benefits this kind of purchase option offers buyers. He said that the life right concept is known for its popularity, affordability and long-term security and is widely practiced worldwide. However, while it is a highly successful and acceptable retirement option globally, in SA it has been seen as a less than desirable option.
“No property purchase option, whether its life rights, sectional title or full ownership, is right or wrong. They just present the buyer with different options.”
Case explains that life rights residents enjoy similar privileges as if the home was purchased by sectional or other title; however, the developer remains the sole owner of the property.
But this also means that the developer carries the responsibility of maintenance and upkeep of the village as by law, no special levies are allowed to be raised for maintenance work. In addition Case noted that Evergreen Life Right schemes build up reserves for major maintenance work and control and limit levy increases.
“The price of the life right is predetermined and always market related and there are no bond registration fees, transfer duties and no VAT payable, thereby significantly reducing upfront costs. This is because a buyer cannot raise a bond on the life right property, but can make use of a covering bond facility such as a bond on an existing property which has been paid up or an access bond to enable buyers to purchase offplan,” said Case.
He also noted that when the life right terminates, through death or other circumstances, it reverts to the owner of the development who is then entitled to resell it.
However, he also stated that on purchasing a life right at one of the Evergreen Lifestyle Villages, the buyer and their partner secure the right to live in the village for the rest of their lives.
“This gives residents the peace of mind that their lifestyles within an Evergreen Village are guaranteed under The Housing Development Schemes for Retired Persons Act 65 of 1988, no matter how long they live and whether or not their financial circumstances change.
“Upon successful resale of a unit, the resident’s estate will receive the original purchase price along with a percentage of the net profit, which is determined and agreed at the time of purchase, less selling and refurbishment costs. Further financial security comes from the fact that should residents run into financial problems, the value of capital can be offset against the levy. When unit is sold, the amounts owing by the resident will be deducted from the original purchase price to be paid back to the resident,” said Case.
“Furthermore, if a life rights development goes bankrupt before residents take occupation, the full amount will be refunded to them from an attorney’s trust account, where all life rights purchase monies are held, and should a new developer take over, they are legally bound to honour the life rights agreement in place. Contact: Evergreen Lifestyles Amdec 021 702 3200
Evergreen at Broadacres.