Residents and their families have welcomed Metlifecare’s decision to scrap weekly fees on empty retirement village units.
Under a license to occupy (LTO) agreement – the system under which nearly all retirement villages operate – retirement villages charge residents a deferred management fee, a percentage of what residents pay for the right to live in the village, typically around 30 per cent.
They can also charge weekly fees on empty units after residents vacate them up to six months after they have been vacated, or until the unit was re-sold and settled.
But Metlifecare has called time on this practice, saying fees now end when a resident leaves their unit.
Chief executive Glen Sowry told the Herald they had made the move to “ensure competitiveness and value to prospective residents”.
The company has also implemented a new offer whereby on all new Occupation Right Agreements entered into from February 26 onwards, residents or their families will be able to access $20,000 of their capital sum on vacation of their unit.
The Retirement Villages Residents Association has welcomed the decision to scrap weekly fees on empty units.
However, the Retirement Villages Association says retirement village operators who continue to take fees are not doing anything wrong and that they are legally allowed to do so under the code of practice.