Retirement Villages
Departure Fee Guide
Departure fees, which are sometimes called deferred management fees or exit fees, are one of the most important, difficult and least understood aspects of retirement villages. They are the fees you pay when you leave the village. There are many different structures and they can produce very different financial outcomes.
It is reasonable to wonder, or even ask, what a departure fee is actually for. In our opinion, it will usually have the following components:
- operator for expenditure
that it cannot as a matter of law or does not otherwise
recover through the regular recurrent charges that you pay while you live in the
village, including an interest component that reflects the deferred nature of the
payment - an operator profit component, comprising any balance.
Another possibility is that the operator offers entry
price flexibility. In other words, it may accept a lower entry price in
return for a larger departure fee, which may suit some people.
It is also sometimes argued that the departure fee represents a return
to the operator on its investment in the retirement village grounds
To read more visit the Excerpt Source: http://www.seniorlivingonline.com.au/downloads/departure_fee_guide.pdf
