Bastard retirement village payments

[Makemineamediumone]

Can't sell it as no-one wants it. Can't rent it as not allowed. Not using it as live elsewhere. Still have to pay the bastarding service charge EVEN THOUGH THE HOUSE WAS INHERITED and watching the equity slip away. Fucking bastarding money grabbing bastards.

I am next of kin for 2 people who live in these retirement flats.
I think they have been just what they need for the final years.
My aunt has lost her children and her husband, and other family (me) are over 100 miles away. I am pleased she is living somewhere safe and secure. Especially with covid.
However this issue does worry me.
A £100 k loss is huge. The Co should have to buy it back or waive the fees with such a financial loss.

This is a really useful thread. Useful for people to be warned in advance. So many flats for sale seem to be retirement ones that young people can't buy. It was never like that 20 years ago when we were looking at flats I don't think

I am going to argue against the consensus here. The people who buy these flats do so because this is where they want to live in their final years. It’s their money. They have the right to spend it how they like and if this suits them and makes them happy, so be it. Yes, as the inheritor it’s annoying to see the financial loss, but the person whose money is chose this, and none of us have any right to an inheritance.

I know my DMs decision to do this will mean we inherit less, but she’s happy and that’s all that counts.

@ineedaholidaynow

Surely this happens with all flats that have communal areas etc so have service charges not just retirement flats.

Other flats might be easier to sell though as younger people would be able to buy

@saraclara

Every time I see or hear someone being advised to buy one of these damn places, I reel off the experiences of my friends who've inherited the damn things, and not only find them impossible to sell, but have to continue paying the horrific service fees even though no-one's using the services. It took three years for each of my friends to offload them. And it cost them a fortune in fees.

They're a scam. They really are.

That sounds like the next misselling scandal. In theory it sounds like a good idea - independent living but with onsite support and companionship.

But obviously the finances behind them are so onesided and unfair, especially as you can have one forced upon you as an inheritence. I wonder if you can refuse to take ownership of one if you do inherit?

Especially as in the OPs circumstances where the asset value is diminishing down to nothing anyway. What if you don't pay the fees? Plenty of people couldn't afford to or it would significantly affect their standard of living.

Being able to rent them out would help massively. People could access the facility without the financial commitment.

OP, I heard an article about these places on BBC Moneybox a few years ago, and I think I've also read about them in the money section of the Saturday Times, but it seems that there isn't as much coverage as this deserves if there are a lot of people in your position.

Sounds like there needs to be more of a campaign. Have you tried talking to Moneysavingexpert? I can't see anything on their website about these places, so I'm quite surprised they haven't picked it up if it's a widespread issue.

@ineedaholidaynow

Surely this happens with all flats that have communal areas etc so have service charges not just retirement flats.

The number of possible buyers is very very much smaller for retirement flats. And the service charges sky high, because the facilities provided are far more extensive.

The value is the value - there’s always a risk with property but having to pay a full service charge for an empty property is outrageous and unreasonable.

@WorkingItOutAsIGo

I am going to argue against the consensus here. The people who buy these flats do so because this is where they want to live in their final years. It’s their money. They have the right to spend it how they like and if this suits them and makes them happy, so be it. Yes, as the inheritor it’s annoying to see the financial loss, but the person whose money is chose this, and none of us have any right to an inheritance.

I know my DMs decision to do this will mean we inherit less, but she’s happy and that’s all that counts.

I assume you're able to afford to pay the fees for years without selling, then? This is the problem. People without the income or a big chunk of savings becoming liable for very high service charges on a flat they can't sell.

I think these flats should come with a warning TBH! We had similar problems some years ago and had to drop the price quite considerably in the end.The problem is everyone is seduced by a "new" home type of thing and the older ones are overlooked . No other advice but that really.You have to write off a large proportion of money .Maybe CAB could help re the fee situation?

A relative is considering buying one in London. It’s over £800k and the service charge is £1000 a month PLUS extras for cleaning etc. It’s fucking obscene.

How high are the charges?

We're normally paying out about £5000 per year.

The nearest one to me has a service charge of £3,000 per annum plus a ground rent of about £500 ( think thats per annum, but not positive ?) A one bed flat is in the region of about £95,000, they do seem slow to sell.

I will eventually inherit one of those from my DM. She bought new so she paid a premium for that. She pays a high service charge, but she gets a lot for her money: security, staff on hand, events, activities etc. I encouraged her to buy it and it’s perfect for her, she’s really happy there and wouldn’t have coped during lockdown in the place she was previously.

I don’t care if its value reduces to zero and I inherit nothing. Her happiness is more important.

My Mum spent most of the pandemic in one of these blocks. When we had to move her into a care home we were paying £1,400/week.

They really do vary in what is/was offered. Ones with on-site catering and minibuses and extensive grounds and supported living cost a fortune in service charges. Hers just had a warden and communal garden and lounge. I dread to think how she would have coped in a standard flat last year; at least she could still meet up with other friends in the block. The warden was excellent at limiting visitors indoors so nobody caught Covid.

Looking on Rightmove all the flats seemed to devalue by about 30% in the first 2-6 years.
I suppose we are just glad she preferred a secondhand block over a modern McArthy & Stone development with contemporary decor costing £100-200k more!

The best thing to do is spend an hour or so looking at prices for neighbouring apartments/rival developments and make sure you price accordingly. Maybe there is a glut of elderly ladies in my Mum's area, but the estate agent reckons the flats don't take too long to sell.

And of course as a leasholder you are also liable for any large costs like roof repairs, new lift etc

Surely, as the beneficiary of a will, you shouldn't have to pay service charges from your own pocket?
Do they not just come from the deceased's estate?

I wonder what they could do if you rented it out by a private arrangement. I think I would just reduce the price till it sold.

It's the fees and part rent that are the issue for us. No money released yet through probate and my dad and his partner are both retired so not swimming in money but still having to meet the costs and then more fees to pay to the company who own it as condition of sale.

I do think it is mad that you can't rent them out as long as the person renting is over the age stipulated for the development.

The ones where my DM lives can be rented out and her service charges aren’t as high as some mentioned on here.

I thought there was something going through parliament about this. contact your MP and ask but yes I think this is a scam, the pertinent facts are buried in the contract.

@Hadalifeonce

Surely, as the beneficiary of a will, you shouldn't have to pay service charges from your own pocket? Do they not just come from the deceased's estate?

No, you have to pay out of your own pocket - it’s no longer in the deceased’s estate, it’s now yours. Even if the flat you inherit is worth nothing, you still have to pay all the charges with it, because it’s your property. It’s not a matter of having no inheritance, it’s that you have to pay the charges out of your own salary or savings for ever - unless you can sell it.

Surely this happens with all flats that have communal areas etc so have service charges not just retirement flats.
Absolutely. The service charge covers things like the site manager, cleaners, gardeners, etc. These things carry on regardless of how many flats are occupied. The service charge will be worked out based on the number of units and shared equally between them. If they waived the fees for empty flats then the occupied flats would have to make up the shortfall. You'd all be complaining about that instead!
Not all the schemes are run by money-grabbers, some are charities who try to run on a no gain / no loss situation.

I agree with pp who have said that they can be a lifesaver when elderly people are left on their own and it's their money etc but it can be a problem if someone develops dementia for example and has to move, probably into a (very expensive) nursing home. If their capital is tied up in the flat which they can't sell, then the nursing fees of possibly £1,000 a WEEK are likely to fall onto their relatives.

This happened to 2 of my Mum's friends family and nearly broke them both.