Making the transition to retirement living – 4 questions you might have about manufactured home parks

April 23rd, 2020

Cairns is soon to introduce its newest (and first) land lease community, also known as a manufactured home park.  The Botanica Lifestyle Resort is the first of its kind in Cairns and a new option for those looking to make the transition to retirement living.

There are a number of options for those wanting to move into retirement living including moving into a retirement village (and the various iterations of retirement villages) or a manufactured home park.

What is a manufactured home (or a land lease community) and how is it different from other retirement living options?

One of the main differences between a manufactured home (or land lease community) and regular home ownership is that you do not own the land on which your house is placed, you rent it.

You do however own the home that you reside in, which differs from most retirement villages where you lease or licence the unit or villa that you live in.

Depending on how the home is constructed, one of the features of a manufactured home park is that you can physically move the home to another location if you wish.  That may not be practical however depending upon the characteristics of the house.

What is included?

There are a number of benefits to purchasing a home in a manufactured home park over traditional land ownership, including:

  1. the access to a community of people of a similar age and with similar interests; and
  2. various community facilities including sporting areas, parks, restaurants, pools and event spaces.

Because you actually own the home you will live in, you also have more freedom in how you keep and manage it, subject to the rules of the park.

A manufactured home is also a capital asset that you can sell in the future, and as you will own the home in the park you will be able to leave it as an asset in your will.

What rights do I have?

Manufactured home parks are governed by the Manufactured Homes (Residential Parks) Act 2003, and that act contains numerous protections for those wishing to adopt that style of living.

Among the protections is an indefinite lease period in most cases, meaning that not only can you reside at the property for as long as you want,  you have the flexibility to terminate the arrangement whenever you are ready to move on.

The legislation also requires that the operator of the park allow cooling off periods and provide extensive disclosure to you about the costs involved in living in the park, the facilities that will be provided, and your obligations when living in the park.

What happens when I am ready to move on?

When the wander bug strikes again and it is time to move on, a manufactured home can present more options than a traditional retirement village.

Depending on the construction of the home, you may choose to terminate the rental arrangement with the operator and move your home somewhere else.  You also have the option, and it may be a more  practical one, to sell the property.  Such a sale will need to involve the park operator though as they will need to consent to any new owner.

You are entitled to receive any capital gain on the sale of your property as you own it and unlike exit from a retirement village, there is no exit entitlement or lump sum payment that you need to pay to the operator when you move on.

If you wish to move on but cannot sell the property, and it is not practical to physically move the property to another location, questions may arise as to what may be done with the property.  You should carefully consider the terms of your site agreement with the operator as this will largely determine what your obligations on exit will be.

Entering into an agreement to reside in a home in a manufactured home park is a big decision and there are a number of different factors that you should consider before signing on the dotted line.  Seeking legal advice on the agreement is a must!

Our experienced commercial lawyers are able to assist with any enquiries about manufactured home parks or retirement villages so call us today on 07 4036 9700.


4 Tips for Buying into a Retirement Village

May 3rd, 2018

Are you considering moving into a retirement village?

At first the numerous facilities and up front prices may seem to be perfect for you but it is important that you are aware of all of costs of retirement living.

The most important piece of advice for those considering selling up and buying a property in a retirement village is that you should not be doing it for a financial investment, what you are buying is a lifestyle.  Retirement village contracts have long-term financial consequences which come in the form of exit fees.

Do your research

There are different structures and services that different retirement villages offer, so it is important to make sure you shop around, that the prices you are looking at are fair and that you are aware of the services that you will receive.

Get advice early on

There are only limited periods in which you can change your mind about entering into a retirement village contract so it is extremely important to get advice early on, so that you do not find yourself locked into a contract that you are not happy with.

Know about the exit fees

There is more than the upfront and ongoing costs to consider when buying into a retirement community.  Exit fees are usually the most significant financial obligation associated with retirement village contracts. This is the business model that retirement communities operate on – residents get a higher standard of  services and lifestyle than what they might otherwise have access to and they pay for it on exit.

Most retirement village contracts include an exit fee which increases over time (up to a cap) and there are huge differences in the fees to be paid between different retirement villages.

What if things change?

Many retirees think that the exit fees will not be much of a concern to them, thinking that they will remain in the village for the rest of their lives.  But you should think about how a change in circumstances might affect this:

  • If you have moved to a retirement community to be close to your family and they move away. What if you want to go with them?
  • What if your children’s circumstances change and they need more assistance from you in the care of your grandchildren?
  • What if your health circumstances change and you need a higher level of care which the retirement village cannot offer?
  • What if you simply do not enjoy retirement community living like you thought you would?
  • What if your financial circumstances change?

Generally, you will not receive back enough capital on exit from a village to pay for an equivalent lifestyle elsewhere.  So, make sure you have a contingency plan in place.

Miller Harris Lawyers can help you traverse the process and enter into retirement living with your eyes wide open to avoid unwanted surprises later on.