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Purchasing Property in a Senior Living Community

Ageing is a natural part of life and it’s something we all must come to terms with. Upon retirement, many choose to down-size their living space and opt for a more affordable and secure home.

buying a retirement home

Buying property in a Retirement Village

Senior living communities provide safety, access, healthcare, lifestyle opportunities, social environments, and assisted-living care.

There are three main options to purchase in these communities, namely, Freehold Title, Sectional Title, and a Life Rights purchase.

Freehold Title

Freehold or full title ownership means that you acquire the title deed in your name and complete ownership rights of a property being the erf and building.

In a senior living community, a retired person may be anyone 50 years or older, and one can purchase freehold property under the Housing Development Schemes for Retired Persons Act 65 of 1988.

The owner is liable for fees associated with the transfer of the property, rates, insurance, and maintenance of the home.

Many communities will charge levies for the general upkeep and maintenance of communal spaces and the village.

Sectional Title

Sectional title, defined by the Sectional Titles Act 95 of 1986, involves purchasing a unit in a sectional title complex. The purchaser acquires full ownership rights of their unit.

Similarly, to freehold title, the owner is liable for any fees associated with the transfer, rates and levies and maintenance of their unit.

However, the body corporate is responsible for the daily responsibilities of the complex and attending to maintenance of communal spaces.

Life Right

Finally, a Life Rights purchase is where a property is purchased for use for the duration of one’s lifetime.

Defined as a “right of occupation” in the Housing Development Schemes for Retired Persons Amendment Act 66 of 1991 which discusses the power to occupy a portion in a housing development scheme, but without the power to claim the transfer of ownership.

Therefore, no costs for transfer are payable. Management will however charge levies for general maintenance.

It is a secure and cheaper option, especially for older persons who do not wish to be hassled with upkeeping their property. Upon death of the last partner holding the housing interest, the life right is sold, and the original purchase price is paid into the deceased estate less any administrative expenses.

Bailey Haynes Inc. – Conveyancers and Attorneys in Cape Town

Moving into a retirement village is meant to simplify your life, however, each purchase option has their own pros and cons.

Contact our conveyancers and attorneys in Cape Town for expert legal advice.


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