The UK retirement village model is still in the early stages of development, with New Zealanders (and a few Australians) leading the way. Now the UK is “waking up” to the DMF business model.
The Law Commission’s two-year investigation found there was “real potential for abuse” in the charging of event or transfer fees (exit fees).
“In the worst cases, a few unscrupulous landlords are getting away with very high hidden fees buried deep in the small print of a long and complicated lease,” Law Commissioner Stephen Lewis said.
These event fees can make up to 30% of the property price but many UK owners are not told about the fees until after they have agreed to buy the property.
The fees can also be triggered by occupancy changes, such as when a carer moves in or when the owner moves into a nursing home and sub-lets the property to cover the costs.
The Commission is now urging the Government to introduce a new code of practice (pictured above) to make these fees more transparent and allow residents to challenge unfair fees.
These include a maximum 10% cap each year on the fees charged for sub-letting or change of occupancy.