Buying or Selling a Retirement Property
Posted on 19th September 2023 at 15:10
Populations around the world are getting older and older and we are no different here in the UK. As conveyancing solicitors therefore we are finding it increasingly popular that people who have reached a certain stage and age in life wish to purchase a retirement property.
However, as I will point out below, these purchases or sales are rarely straight forward and can be fraught with risks should it not be handled and advised on property. Here at Avery Walters Solicitors you can be assured that we have the expertise, the care and the time to fully analyse and advise you of all the, at times quite complex, nuances of such property purchases or sales. We aim to ensure that our clients purchases or sells such properties with full knowledge and confidence so that, in the case of buyers, they can fully enjoy the wonderful experiences, services and communities that only retirement properties can provide.
Retirement properties tend to be apartments with access to support and care facilities. These properties are generally leasehold properties with terms of 99, 125 or even 999 years. Annual ground rent and services charges are payable. Generally there is a managing agent appointed by a landlord to run the services provided.
The leasehold aspects of such properties are in some respects be very similar to any other non-retirement property in the England and Wales and we would analyse the lease and advise accordingly in the usual manner. Issues that could arise as with any leasehold include:
- is the lease term long enough?
- is the ground rent too high and excessive?
- is there a restriction on the register of title that has to be dealt with?
Retirement property leases do differ however in certain respects to standard leasehold properties, such as but not limited to the following:
Retirement properties are generally age restricted. This tends to be aged 55 or over. We would assist you in complying with the steps required before exchange of contracts to obtain the landlord’s consent to the sale.
Service charges do tend to be higher than standard leasehold properties. This is inevitable as retirement home complexes do provide more services than standard leasehold complexes. We would advise you fully of all the charges involved and assess and advise as to whether they are reasonable which is a legal requirement.
Transfer Fee/Contingency Fee/Exit Fee
There tends to be many names for this fee, but most retirement property leases contain this fee, sometimes even two such fees. These are fees that generally become payable by the seller of such properties on the completion date. Usually, the seller has 5-7 working days following completion of the sale to pay the fee to the landlord and/or managing agent. The fee may be different in each lease, but they tend to be 1% of the market value on the sale. The fee can however be significantly more than this. The landlord/managing agent justify the fee by claiming that these fees help keep the overall service charges down for all the other tenants. At Avery Walters you would be fully advised of these fees, when and how much is payable. We would also advise you to inform your family members of these fees as they may be quite surprised when the time comes to pay the fee. If permitted by the lease these fees may also be payable if you decide to move out and rent the property.
You can be assured that at Avery Walters Solicitors you will receive the necessary expertise and advice in purchasing or selling any such properties. With many such properties in and around the Leeds and Yorkshire region, we regularly act for clients buying or selling these properties and we provide our clients with the necessary expertise and efficiency required to complete the purchase or sale as promptly and as stress free as possible.
Conveyancing Legal Advice
Our Conveyancing team are on hand to guide you through the buying and selling processes, providing legal advice and to assist with any queries you may have. Please contact our team on 0113 200 7480. We look forward to assisting you.
Tagged as: Residential Conveyancing
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