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.

The service charge on these places is extremely inflated. They are a business and have to provide a fat margin of return.

www.theguardian.com/money/2021/mar/28/i-cant-sell-mums-retirement-flat-and-the-charges-are-mounting-up

They warrant the same govt scrutiny as the new build ground rents debacle.

HNRTT but if you have access to the original sales pack and if the site are acting unethically, it might be an idea to have a specialist lawyer check the sales and advertising for any actionable misrepresentations based on the current state of the law. It might give you a negotiating position to get a sale back or paused service charges. Good luck.

Is there a mortgage on it? I assume not, so I would sell it for what you can get for it and move on. Yes it's annoying, but at least you won't be paying out more money and you will never have to think about it again. Peace of mind is priceless.

Just think for every month you keep the flat it's costing you Nearly £500 a month. Which is quite a lot of money. I am assuming that includes council tax. And if a bigger repair comes along that will be even more. Money you will need to find.

Indeed. My mum is renting one and has kept her cash in the bank for that very reason. She pays 750 in rent and that includes the 300 odd per month in fees that she would pay if she owned.

I'm not in the UK, but my DF lives in a similar place, although I believe after six months the fees drop to half. However, this is all in the terms and conditions, so people really do need to study them thoroughly before signing up to purchase. I'm happy enough for the peace of mind it gives me that my DF is happy and I don't have to worry about him. They don't seem to be hard to sell here (which is generally done by the owners of the retirement village)

I wouldn’t buy a new one, as they do seem to depreciate horrendously in the first few years. Although I suppose does depend on the number available in your area

Mil costs were £800 per month service charge plus £3k per year ground rent plus any emergency repairs or non budgeted costs plus council tax kicked in a year after she died. No discounts or temporary suspensions of fees other than council tax. Fees were not allowed to be post phoned and then paid for by the process of selling the flat or out of the estate had she died. (She had moved into a care home.).
If she had died in the flat, I’ve no idea how we would have covered the monthly fees as they were more than i earned per month.
As I said the concept was good for her and she was happy and safe. But they really do need to think about what happens once someone dies. Not all families can carry the cost of these whilst waiting for them to sell. We never saw it as an inheritance and viewed the purchase cost as a write off.

@knittingaddict

Is there a mortgage on it? I assume not, so I would sell it for what you can get for it and move on. Yes it's annoying, but at least you won't be paying out more money and you will never have to think about it again. Peace of mind is priceless.

That’s how we viewed it. I don’t expect many will have mortgages on them. I can’t remember exactly, but I don’t think our development allowed them and renting them out was definitely not allowed.

Is this McCarthy and Stone? They're well known for this racket, and to make it worse, they even take a percentage of the sale value!

Worth naming the offending operator, as that will get it in Google search results to warn others.

So yes, McCarthy and Stone retirement homes will sell you a dream that fast turns into a nightmare.

What did you get for £800 per month @Bargebill19 , DM pays less than £200 per month and about £500 ground rent?

@MondayYogurt

The service charge on these places is extremely inflated. They are a business and have to provide a fat margin of return.

www.theguardian.com/money/2021/mar/28/i-cant-sell-mums-retirement-flat-and-the-charges-are-mounting-up

They warrant the same govt scrutiny as the new build ground rents debacle.

Generally speaking that's not true at all. Leasehold property is far more strictly regulated than most other areas of property and the monies collected have to be held in trust for and on behalf of the estate. Accounts should be produced within six months of the year end and the lease should be clear on what happens with surpluses - usually it's given back to leaseholders as a credit.

There may be some blocks where there's a transactional charge to the freeholder or similar, but really the conveyancing solicitor should have pointed it out to the prospective purchaser or they could read the very expensive lease they're signing.

Unfortunately the debt to the service charge travels with the lease rather than the owner so it falls on the current owner to pay. In the majority of cases I've seen we keep the property name as 'the estate of' without chasing the debt until it's sold and there's an undertaking to settle the balance when the transaction completes. It's always worth talking to the agent.

It’s a real shame you can’t rent it
There are probably people out there who would like to try it or might only be there a relatively short time before needing to go into a care home or something

She got an hours cleaning per week and use of communal lounge and garden. Staff on site 24/7. However they would always ring and ask you to make a decision regarding wether to call an ambulance etc. Water and laundry and bin/skip collection costs all included in the £800. Refurbishment was included in the £3k per year. Meals in the on-site restaurant were subsidised by the monthly service charge but were still extra cost, as was any care packages.
No entertainment other than a weekly coffee morning with whoever was in charge on site on the day. All entertainment had to be organised by residents or relatives. We ended up doing that during mil stay.

Yes I had forgotten the percentage taken upon the sale of the flat. !

DF pays a massive amount. I think ground rent and service charge are 17k a year, but its very nice (posher than Mccarthy and Stone or Churchill) with on site pool. He swims everyday.
He has a deal where 50% of the annual service charge comes out of the eventual proceeds of the sale, to make it more affordable.
Hopefully he will make good use of it for a decade.
I think the resale value is a concern.
They aren't good value but the staffing and overheads are probably huge.

@Bargebill19 I assume it is the staff on site 24/7 that puts the price up. DM's flat has a warden but only during normal working hours during the week and then they have an on call system for all other times. And there is no on-site restaurant.

The entertainment is run by a residents committee

Yes I would expect that staffing costs to be high as someone was on site 24/7.
As I said the concept is good, mil was happy and safe. She could afford it. All good.
The problems arise when the property has to be sold and had she died we would have had to find that money every month and year until it sold. The monies can’t come from the sale of the property or the deceased’s estate. They have to be paid by whomever inherits and not everyone has a spare £1k per month to suddenly take on these costs.
They aren’t easy properties to sell as the market is flooded with new versions as well as other second hand properties on the market. There does come a point where people do not want buy a cheap property as they perceive there must be something very wrong with the development for it to be priced so low, especially when new build are priced much higher.
So yes, you can put it on the market for a low figure but that might be just as off putting to a future buyer as putting it on for a reasonable amount.
We got very lucky that someone wanted to buy it and mil finances allowed us to accept a silly offer.

@LBOCS2 My aunt's estate was decimated by one such set up, to the point where her friend and executor had mental health issues from trying to resolve it.

They are private businesses, and people should be under no illusions as the the motivation to squeeze as much profit out of residents as possible.

Moneysavingexpert has many horror stories about it. But of course it's Not All Retirement Complexes and many people are very happy living in them. My aunt certainly liked hers and had no idea the trouble it would cause.

@Bargebill19

The problems arise when the property has to be sold and had she died we would have had to find that money every month and year until it sold. The monies can’t come from the sale of the property or the deceased’s estate. They have to be paid by whomever inherits and not everyone has a spare £1k per month to suddenly take on these costs.

This isn't actually true, and you shouldn't be bullied by those who run the thing. After the death the liabilities belong to the estate. They will build up. They need to be settled out of the funds in the estate before anything gets distributed to the beneficiaries. But the family don't need to find cash to pay them in the meantime.

@MurielSpriggs
The OP isn’t talking about any liabilities before probate is granted, but after that time. Liabilities belong to who has inherited. If the OP has already legally inherited the flat - ie, it’s gone through probate and the deeds are changed - the liabilities are hers and they do need to find the cash to pay the bills if they can’t sell the flat. Just as if you inherited any other property.

@MurielSpriggs. Sorry but it is true. Certainly of the development mil was in. (One already mentioned)
There are several providers out there. Some are willing to wait for there money, some won’t. It’s not a case of just saying no to them or getting expensive legal advice you have no hope of paying.
They can legally do it and they will if they want them money and of course they will add their costs to the bill you already owe.
You just have to sell ASAP.

They are a good idea and a solution for many older people. Sadly they are also a business with shareholders to pay, and that brings out the dark side of economics.

I work with older people and know lots of situations where someone has to move into a Home or sadly dies, and the family end up footing the bill for the service charges.

My Mum started talking about buying a M&S flat in a new development in her town. I explained about the service charge and the issues, and thankfully she didn't go ahead.

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.

This is not a sensible way to administer the estate. The executors should not distribute the assets in the estate until the flat is sold. In other words the flat remains as part of the estate, and the charges are debts of the estate, not of the family. If there is no cash in the estate to pay then the management company will just have to wait until the flat is sold. They have no power to force the executors to transfer the lease to the family, and the executors can take as long as they need to wind things up.

@MurielSpriggs

You would think as that would be common sense. But in reality it doesn’t work like that.
The developers have to have an income - that’s the monthly and annual charges. That’s why they won’t even buy the flats back off you, even at a reduced price and resell them themselves. Because they wouldn’t have an income stream in the meantime.
It’s purely down to the business model.