You'll find answers to our most frequently asked financial-related questions below. If you're unable to find the answers you're looking for, please don't hesitate to contact us here.
There are three key financial aspects to consider when choosing the retirement village for you.
Firstly, at Summerset, like most major operators, you purchase a Licence To Occupy which is priced based on the capital cost of the home you choose. This gives you the right to live in your home for life.
The second is known as the Deferred Management Fee. A Deferred Management Fee covers items such as infrastructure or development of the village and grounds, and refurbishment of your home. The DMF is accrued over the first four years if you live in the villa, townhouses or independent apartment, or two years from when you move into your serviced apartment.
The third thing to consider is the Weekly Fee. This fee goes towards the costs associated with your home at Summerset and with the daily operation of the village, such as covering rates and water levies for your village, insurance on your home, lawns and gardens, village staff and events, activities and so on. Most people find this works out to be cheaper than the cost of running and maintaining the home they had before moving to Summerset.
You’ll continue to pay your own personal contents insurance, car insurance, power and phone bills as you do now.
Any increases in the Weekly Fee for each village are capped so they never exceed any percentage increase in the National Superannuation rate in any given year. This provides you with absolute certainty from the day you arrive at your Summerset village that your regular superannuation payments will always cover the cost of the Weekly Fee.
Summerset has developed a disaster policy that is second to none.
It is our belief that we have a responsibility to our residents that they will never be left without a home in the event of a disaster.
Should one occur, we will move heaven and earth to ensure our residents’ immediate safety and future security.
If your home is unable to be repaired or rebuilt on the same site, or in reasonable proximity, we will pay you the market value of your home. This will be the value of your home at the time immediately prior to the disaster with no deductions.
Unlike other retirement villages where you might only get the original purchase price or insurance proceeds which may not cover the price of a new home, Summerset’s policy ensures you have certainty.
We created this policy following the Christchurch earthquakes, when we saw the plight of retirement village residents who had been left homeless, unable to afford a new home. We believe you deserve better than this, so that even if the world falls apart, yours won’t.
A Licence To Occupy gives you the right to occupy your villa or apartment for your lifetime, or for as long as you choose. When the Occupation Right Agreement is terminated you (or your estate) will receive a payment sum based on the terms set out in the agreement. As a rule this will be the original cost of the Licence To Occupy less the Deferred Management Fee and any outstanding fees or money owing.
You will be responsible for meeting the cost of:
• Your own personal contents insurance
• Your car insurance
• Any insurance excess on damage to your dwelling
• Your telephone bill
• Your power bill
• Summerset services you choose to use, e.g. house cleaning, laundry done for you.
Fees and charges fall into three distinct kinds.
Deferred Management Fee, which you only pay at the time you receive your final repayment sum for your Licence To Occupy. This fee is a contribution to Summerset’s costs for providing amenities and services, e.g. roading, drains, street lighting, maintenance of communal buildings, management and further development of the village.
Weekly Fee, that you pay to your Summerset village, to go towards your share of costs for things such as rates, communal building insurance, lawns and garden care, rubbish collection etc. This is paid monthly in advance. It ceases immediately the resident permanently vacates their home.
Charges for user pays services, for example, service packages or for individual items like a meal delivered to your home.
The DMF is accrued over your first four years in the village if you live in a villa, townhouse or independent apartment. It is accrued to your first two years if you live in a serviced apartment. In the case of villas, townhouses and apartments you will be charged an initial 5% of your Licence To Occupy purchase on day one, and a further 5% per year for a maximum of four years, up to a maximum total amount of 25%. For serviced apartments the DMF you will be charged is 10% on day one, and 7.5% per year for a maximum of two years, with the total DMF paid at 25%.
The DMF covers the costs of the infrastructure and development of the village including:
• all large ongoing property maintenance costs
• refurbishing your home at Summerset
• drainage, roading, footpaths, street lighting and village grounds
• repairs or upgrades to communal facilities
• the cost of re-selling your Summerset home.
An Occupation Right Agreement (ORA) is the legally binding agreement between the resident and the village operator. This is a formal document detailing the terms and condition of your Licence To Occupy.
Residents signing an Occupation Right Agreements are protected by the Retirement Villages Act (2003) which provides rights for all those living in registered villages, such as Summerset’s villages.
The minimum requirements Summerset must provide in an Occupation Right Agreement are detailed in the Retirement Villages Code of Practice (2008), which was recently updated to include provisions for residents in the event of a disaster.
One of the roles of the Retirement Commissioner is to make sure operators comply with the Act and Code of Practice.
Summerset Group Holdings has been managing retirement villages since 1997. For the last four years since 2010 we have won the Best Retirement Village Operator award across Australasia.
Summerset offers a range of living options to suit a range of budgets, however everyone’s circumstances are different. Please talk to your sales manager should you need assistance.
There is no possible capital loss for residents, nor any possible capital gain. When you purchase a Licence To Occupy, you do not purchase a building or title to any land. You purchase the right to occupy a dwelling for your lifetime. When the right is on sold the operator sets the price according to market conditions, but no capital is gained or lost by you in that transaction.
You can secure your Licence To Occupy for a dwelling by paying a fully refundable $3000 deposit. This deposit is held by the Public Trust and accrues interest.
You pay this deposit when you sign the application form. It is refundable at any time prior to settling or possession and interest will be paid if a refund is given.
Summerset knows this can be a difficult time, for you or your family and we aim to support you in every way we can. For that reason the Weekly Fee stops immediately, once your home is permanently vacated. After you leave we undertake the marketing and sale of your Licence To Occupy. But we do a lot more, and we’re happy to talk with you about how we are able to support you and your family.
You don’t have to worry about the maintenance of your home or communal facilities you’ll enjoy at the village. Summerset manages all maintenance and the costs for this are covered under the Deferred Management Fee you paid for your Licence To Occupy.
The Statutory Supervisor is an independent body that monitors the operation of the village to ensure that the rights for residents are protected, the operator of the village acts in accordance with the Disclosure Statements and the village is run in a financially responsible manner.
The Statutory Supervisor for Summerset villages is the Public Trust. They hold a first mortgage security over the village land in order to ensure priority and security for the rights of all residents.
At Summerset we do everything we can to ensure you have the home you want. This means offering ways to enhance your home and surroundings to make your life a little easier or more comfortable. Choices include dish-drawers, heated towel rails, additional heating options, and security door/fly screens. These extras are installed at your cost.