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How retirement living developers can design for inclusion of the visually impaired

Developing sophisticated retirement villages for a growing market is a specialist field. Retirement living developers need to understand the lifestyle, challenges and preferences of the aging population.

One of many challenges faced by the aging population is visual impairment.  Approximately one person in three has some form of vision-reducing eye disease by the age of 65. The most common causes of vision loss among the elderly are age-related macular degeneration, glaucoma, cataract and diabetic retinopathy. Age-related macular degeneration is characterized by the loss of central vision.

Recently Jennifer Webster did a presentation at The Somerset Lifestyle and Retirement Village in Somerset West about age related visual degeneration and how one can adapt and use tools to assist in remaining independent for longer. Jennifer is the founder of Curable. Being visually impaired is a great bonus to sighted people who are wanting to design for inclusion. Jennifer has worked out some really unusual ways to navigate in physical spaces and digital platforms.

Jennifer Webster was diagnosed with Stargardts disease at the age of 10, a juvenile onset form of Macular Degeneration. She managed to complete mainstream schooling and has a BA Honours from Rhodes University. Married with grown up children she now spends her time helping to find solutions and encouraging others along the journey of vision loss. Jennifer shared her own story and some of the joys and struggles of coming to terms with a visual impairment.

Jennifer also took the time to give us an overview on the design and decor of The Somerset and how it impacts anyone with low vision. To watch her feedback video, click here.


The development of retirement villages is a specialist field and Shire consultants complete the standard professional team of developers who are planning or executing new retirement developments. Click here for details of projects that Shire has contributed to.

The changing world of retirement living

The changing world of retirement living

Lynda Smith is the CEO of 50+ Skills and Refirement Networka business involved in helping organisations and Individuals 50+ to understand the opportunities and challenges that the future holds for this demographic group. She is an accredited retirement coach in South Africa through Retirement Options USA.


Lynda writes:

“Longevity gifts us with more years and choices that need to be made around life, work, and family. In our parents’ generation the establishment of “old age” homes and nursing facilities were a choice many made as part of their plan beyond their working life. The next generation, known to many as the baby boomers are now aged 56 to 74. They have many more options and choices. Let’s look at what these may be.  In many cases, two generations will be living side by side, but may have quite different needs.

  1. Current Old Age homes that have large numbers of residents 75-100
  2. New Life Rights type villages with cottages and apartments.
  3. New Sectional Title Villages for an Over 50 Market.
  4. Choosing to stay in an inter-generational community close to family.
  5. Remaining in your own home and bringing in services as you need them.
  6. Downsizing from your larger home into something smaller.

This new generation is larger in size and is currently being bombarded with many choices. This generational group has seen the world change greatly over their 56-74 years of life. Each shared cultural moment affected their values, beliefs, and mindsets—creating new generational ideals different from their parents in the Silent Generation. Values like individualism, independence, control, and value define their thinking. Many in this generation are familiar with the concept of “old age” homes as they helped their parents make these decisions and have engaged over the past 20 years in what this model offers. Some of these perceptions may be positive, but many may not be. This can have an impact on sales into this style of living looking to market to the next generation.

Some of the marketing messages that are key for this generation can include the following:

  • Health and Wellness facilities
  • Reliable Fibre Network Solutions
  • Choices around equity and growth of property
  • Security
  • Customized services and personalisation.
  • Care services in their homes on demand
  • Business services
  • Close location to great shopping centres and medical facilities
  • Remaining an active part of the larger community

Within this cohort of baby boomers, the needs will differ. The older group may align more easily with some of the current status quo, but the younger group will demand much more as they enter this market. Managing agents and developers need to be prepared for this potential market.

The challenges from the market are also varied and causing other challenges that need to be addressed. The sale of primary homes is taking longer, and prices have dropped. Sadly, this is the most divorced generation ever to enter this season of life and many cannot afford that current offering. Many have not managed to complete work to the age of 65 for a variety of reasons and this presents less money to invest for this season.  High levies could also be impacting a sale.

There are challenges on both sides of this opportunity and developers and owners of retirement homes, need to do deep research to ensure that there are a range of possibilities that meet the needs of the current market. Please also ensure that your sales teams are equipped and ready to deal with this new generation coming your way.  Individuals need to understand the different opportunities, ask the right questions, and make sound decisions to ensure that this season of life is filled with the best that life has to offer for them.”


The development of retirement villages is a specialist field and Shire consultants complete the standard professional team of developers who are planning or executing new retirement developments. Click here for details of projects that Shire has contributed to.


Why Retirement Lifestyle Villages are a lifeline to elderly people battling COVID-imposed isolation

Why Retirement Lifestyle Villages are a lifeline to elderly people battling COVID-imposed isolation

“As the socio-demographic group most at risk of falling severely ill or even dying after contracting COVID-19, there’s no doubt that the over-60’s has been the worst affected by the pandemic. However, the negative impact of the COVID-19 pandemic on the older generation reaches beyond the risks to their physical health.

“To make matters worse, the elderly are not only battling the physical health effects of the virus, they’re also facing the toll that the virus has taken on their mental health – thanks to COVID-imposed isolation”, explains Gus van der Spek (property developer and owner of a life rights company).

“Many elderly people across South Africa live alone and had already been struggling with feelings of isolation and loneliness before the pandemic began, but with the very real threat of COVID-19, these issues only worsened.”

How an existing threat to elderly wellbeing was exacerbated by COVID-19

Loneliness and social isolation for those not living in retirement communities is a well-documented issue facing the older generation, brought on by factors such as the loss of a partner, having family emigrate, losing touch with friends and withdrawing from community activities.

“The physical and mental health risks to elderly people living in isolation are numerous: it increases the risk of premature death, dementia and is associated with higher rates of depression, anxiety and suicide,” explains van der Spek.

The threat of COVID-19 forced even elderly people with community ties and family nearby to go into isolation. Government communication urged over-60’s to stay home as much as possible and family members and friends needed to stay away to reduce the risk of infecting the more vulnerable older generation. Churches and other community centres (which formed the basis of many of these individuals’ social lives) had to close their doors.

“To add to this, while the rest of the world turned to technology as a tool to keep them connected to loved ones, many elderly people struggled to adapt to these tools, especially those who lived alone with no one around to walk them through it,” adds van der Spek.

Community living as a lifeline

Thankfully, not all over-60’s were left to grapple with the physical and mental challenges of COVID-19 on their own. “Those residing in retirement communities were able to interact with their friends and friendly staff members on a daily basis,” he says.

While it is true that nursing homes and frail-care were hit particularly hard by COVID-19 as they were often the location for concentrated outbreaks, van der Spek explains that is unfortunately as a result of the close living conditions in these facilities and the underlying health conditions typically found in nursing home and frail-care residents.

“However, those who had opted to live in retirement lifestyle villages and estates were able to isolate in their own units, with plenty of space to themselves while still interacting safely ‘masked-up’ outdoors with other residents and staff when necessary”.

“Residents of these kinds of retirement communities were able to have the best of both worlds – they had the safety of their own units rather than a single room in close contact to other sick people, and they were able to interact with their neighbours safely outdoors within the boundaries of a safe, access-controlled environment,” he adds.

More senior living options to combat elderly isolation

Van der Spek says he is partly motivated by the desire to combat isolation amongst the elderly and to give them a home that promotes overall wellbeing. “Research indicates that community living has proven to significantly improve the physical and mental health and happiness of the older generation, and we’re proud that our Estate will soon be a part of those efforts.”

Six ways in which living in retirement lifestyle estates help to combat elderly isolation:

1) An abundance of new friends close by. “While there are obviously more ways to connect with your friends and neighbours without the threat of COVID-19, it is still possible to socialise with your neighbours outdoors, with masks on and while 1.5 metres apart.”

2) Staff on hand to talk through needs. “If residents are feeling lonely or that they have no one to talk to about their emotions, they know that professional staff are always on hand to listen and offer solutions where possible.”

3) Assistance with connecting to loved ones. “Many elderly people desperately want to video-chat with family and friends who they aren’t able to see in person, but they are unsure of how to go about it. The Estates staff are able to help get them set-up and comfortable with using these tools.”

4) Beautiful grounds to socialise safely outdoors. “If you’re not comfortable interacting closely with other people yet but would still like to see them and wave hello, many retirement villages feature beautiful gardens so that you don’t have to be stuck inside on your own all day.”

5) Access to top medical practitioners who can spot the signs of elderly people suffering from loneliness before it escalates. “As feelings of isolation can lead to depression, anxiety and even thoughts of suicide, it’s important to have access to medical practitioners who can identify and treat these symptoms.”

6) Smart technology that keeps a watchful eye. “Some retirement villages use smart technology such as sensors in the floor next to the resident’s bed to monitor if they’ve gotten up that day. This is primarily used as way to detect if a resident is ill but could also be used as an way to detect symptoms of depression.”

“Finally, once the threat of COVID-19 subsides, most retirement lifestyle villages and estates will organise regular community events and activities to encourage socialisation among residents and ensure that there is a strong sense of community to combat feelings of loneliness and isolation amongst the elderly,” van der Spek concludes.”


Shire offers Development Consulting: Assisting Property Developers in the planning and execution of all key elements of new retirement villages. To contact us, click here.

Freedom, friendship and fitness in retirement

Freedom, friendship and fitness in retirement

After more than a year of living in a pandemic, many are experiencing heightened levels of physical and mental stress as the constant health risks and financial insecurity continue to impact lives. For high-risk communities, such as the more mature, this stress is compounded even further. With lockdown measures and the threat of the Covid-19 pandemic set to continue for some time yet, it’s vital that those looking into retirement to consider freedom, friendship and fitness, when choosing a place to stay.

1. Freedom

Despite stringent lockdown regulations, residents of nature-based estates do not experience the sense of confinement suffered by those living in cities and apartments. Estates that boast 24-hour security allow residents to take full advantage of nature walks. Coastal retirement estates, in particular, have attracted significant attention throughout lockdown as people seek the expansive sea and mountain views and relaxed living.

2. Friendship

The social distancing required to lower the risk of infection has shown the importance of human interaction in happy living. Retirement or mature-lifestyle estates tend to attract like-minded individuals that create a valuable sense of community through low-touch activities, events and socially-driven initiatives. This allows for residents to enjoy safe, social interaction while remaining engaged.

3. Fitness

Physical health is connected to mental health and this is increasingly important as one ages. Doing some form of daily exercise will improve mental health among seniors. While maintaining optimum health during the pandemic has proved challenging for most, it’s a lot easier for those residing in nature-based retirement estates. There are many nature trails for running or walking as well as professionally-supervised exercise classes.

Living in lockdown with the freedom of movement, strong friendships and nature-based facilities that encourage improved overall fitness result in improved wellbeing and a quality lifestyle.

To read more about the developments and retirement villages that Shire Retirement Properties (Pty) Ltd. are involved with, click here.

Retirement Village patriarchy

Retirement Village patriarchy 

Patriarchy is a social system in which men hold primary power and predominate in roles of political leadership, moral authority, social privilege and control of property.

My daughter will be 18 years old this month. I find it hard to believe, and yet it is true. Soon she will  no longer require a lift to the beach or anywhere else, as she spreads her wings and finds her feet in  this world. A world dominated by men and in which she must learn to thrive. I have little doubt that  she will do so! 

Facing the reality of her pending adulthood has brought about a change in me too. It is a change that  has perhaps come late in my life, but I have a few years of fight left in me and I sense the need to be  less complicit in a situation that requires urgent attention. 

My work focus over the past ten years has been to understand and improve the so-called “Retirement  Village”. “Retirement” is an irksome term, but it is useful because everyone knows what you are  talking about – that stage of life when many people sense the need to gear down, take an interest in  less money-making activities and “smell the roses”. For some that stage is at age 55 and for others it  is at age 88 – or it never comes. 

It will come as a shock to nobody that many retirement villages and retirement organisations are dominated by men – especially during the early years of development. I have been comfortable in  that environment, but am becoming less and less so, as I have begun to realise the very far-reaching  impact of that male domination. 

An 88-year-old lady recently stood up rather shakily in a meeting and asked whether I did not think  that the organisation that owned the village in which she lives, should not have at least one woman  on the board of trustees. I had to agree, despite being employed by those same good gentlemen. 

Too often, houses and common facilities are designed by men, the engineering is done by men, men  run the service organisations and men run the village as trustees, directors and committee chairmen. 

This all despite the fact that the vast majority of retirement villages (if not all) are mostly populated  by ….. WOMEN! 

Women outlast men by a significant factor, and while this is an uncomfortable reality for men to face,  it is a fact. Almost from the first batch of occupants, women will be in the majority. 

Surely there is a pressing need for more women to take an interest in influencing the early  development of retirement villages. More property developers need to have women involved in the  reviews of house layouts and in the types and formats of services offered. 

It is heartening to see the level of female involvement in the management of certain villages. There  is no shortage of talent and strength, and one has to wonder why in some villages, so few women  stand for election as trustees. Perhaps they have little appetite for the power-plays within the male dominated boards of trustees – often comprising several ex-captains of industry? 

If this matter is to be remedied, women will have to step up and men will have to step back – realising  that women must shape the environment that they will live in for the longest. Their needs must thus  be placed first. 

Author: Rob Jones: MD – Shire Retirement Properties (Pty) Ltd

Shire Retirement Properties (Pty) Ltd (Shire) is based in the Western Cape Province of South Africa and specialises in the provision of a range of services focused exclusively on the retirement industry.

The valuation of Life Right occupation in retirement villages

The valuation of Life Right occupation in retirement villages

This article was first published on the 14th of March 2016 by PPE Valuations.

Retirement village developments can generally be defined as usually including a mix of independent living units (ILUs) and serviced apartments (SAs) with community facilities providing a shared congregational area for village activities and socialising (McAuliffe, 2010).

Very little has been published in South Africa on the valuation of retirement villages. The retirement village phenomenon is fairly new in South Africa with a recent history of not more than 30 years when the first Baby Boomers reached retirement age and available amenities (old age homes run by government and other “care” societies and groups) were found to be wanting. Developers saw a market to develop schemes tailor-made to suit the needs of middle- to upper-income retirees, and so the first privately owned and operated retirement villages, as a departure from the traditional retirement homes, were constructed. Since then there was an explosion in the construction of retirement villages.

Retirement village assets differ from traditional residential assets due to their operation in accordance with statutory legislation. Before one can determine the approach and method of valuation to follow, one must have therefore an understanding of the legislation and legal structure surrounding a property type and its ownership. Following is a short discussion on the legislation governing retirement villages as well as the legal structure of ownership, as envisioned by the legislation.

Unfortunately, legislation does not always keep up with the pace at which the social landscape changes with the result that South Africa does not have any specific laws regulating the development of retirement villages per se as opposed to Australia and the USA where every state has its own Retirement Villages Act (Towart, 2013). There exist, however, an Act in South Africa known as the Housing Development Schemes for Retired Persons, Act No 65 of 1988, which tried to address issues regarding such schemes. Unfortunately the language used in the Act is in some respects obscure and the Act’s structure is cumbersome. The word “retirement village” is nowhere mentioned in the Act. And, yet, the Act offers substantial protection against a variety of risks to retired persons who invest in retirement schemes (Kilbourn, 2008).
Some definitions as set out in the Act is important in understanding the legal structure of the property interest.
The Act defines a “retired person” as someone who is “fifty years of age or older”. The purchaser of the housing interest need not be a retired person; anyone; regardless of age, may invest in a retirement scheme. In terms of section 7 of the Act, however, no person other than a retired person or the spouse of a retired person except with the written consent of all other holders of housing interests in the scheme may reside in a retirement scheme.

Section 1 of the Act defines “housing development scheme” as follows:
“any scheme, arrangement or undertaking-

  1. in terms of which housing interests are alienated for occupation contemplated in section 7, whether the scheme, arrangement or undertaking is operated pursuant to or in connection with a development scheme (read: sectional title) or a share block scheme or membership of or participation in any club, association, organization or other body, or the issuing of shares, or otherwise, but excluding a property time-sharing scheme; or
  2. declared a housing development scheme by the Minister by notice in the Gazette for the purposes of this Act;

“Housing interest” is defined as follows in the Act:
in relation to a housing development scheme (that is a retirement scheme), means any right to claim transfer of the land to which the scheme relates, or to use or occupy that land

“Right of occupation” is defined as follows in the Act:
means the right of a purchaser of a housing interest-

  1. which is subject to the payment of a fixed or determinable sum of money by way of a loan or otherwise, payable in one amount or in instalments, in addition to or in lieu of a levy, and whether or not such a sum of money is in whole or in part refundable to the purchaser or any other person or to the estate of the purchaser or of such other person; and
  2. which confers the power to occupy a portion in a housing development scheme for the duration of the lifetime of the purchaser or, subject to section 7, any other person mentioned in the contract in terms of which the housing interest is acquired, but without conferring the power to claim transfer of the ownership of the portion to which the housing interest relates

To read the rest of the article, click here.

Shire offers development consulting – assisting developers in the planning and execution of all key elements of new retirement villages. To read more about our services, click here.

Is a life right right for you?

Is a life right right for you?

Personal Finance: 4th Quarter 2018 – Life rights by Roz Wrottesley

As the retirement village market grows, so do the options for securing your place in one. Buying a life right is the least-understood financial model, but it has definite advantages for people who want freedom from the risks and responsibilities of property ownership. Roz Wrottesley reports.

At age 50 or older, your search for a new home has a new and unfamiliar dimension: the option of moving into a retirement village with the expectation of living there for the rest of your life.

The idea of not having to move again – even if your health declines, or you outlive your spouse/partner – is attractive, but the decision is not a simple one. How much do you value your independence? Does communal living appeal to you? Can a retirement complex offer you the location and lifestyle you want? And crucially, if it is one of the growing number of developments that offers a “life right” on a property, rather than outright ownership, is it a good investment?

The life-right model is not well understood in South Africa, partly because it is only one option in the developing retirement village market, but probably also because we have a deep suspicion of anything that falls short of full property ownership. There are no regulations specific to this model of financing a home in retirement, which means that life right propositions vary widely and may be difficult to evaluate without the help of a financial planner. However, life-right purchasers do have the protection of the Housing Development Schemes for Retired Persons Act (HDSRP Act), which sets down the requirements of valid contracts and the remedies if contracts are broken.

The two better-known methods of securing accommodation in a retirement village are to buy outright in a sectional title complex, or buy into a share block, which gives you shares in the development company, rather than ownership of property, with the shares allocated to a specific unit of accommodation. Sectional title schemes are subject to the Sectional Title Act, while share blocks are regulated by the Share Blocks Control Act. In the absence of dedicated regulation, life rights developments must be registered in terms of the HDSRP Act. This means that the title deed on the land on which a development is built carries an endorsement (a stamp and notes provided by the Registrar in the Deeds Office) that acknowledges that the rights and properties sold on the land are subject to the provisions of the Act.

Although life rights are not regulated or uniform in this country, the model is well-established in the United States, the most developed retirement-village market in the world, and is growing in popularity in Australia, New Zealand (where reports suggest that life rights represent as much as 80% of retirement village occupation) and the United Kingdom. Whereas retirement was once the preserve of the not-for-profit sector, the retirement of the relatively affluent “baby boomers” (born after World War II, between 1945 and 1964) created the demand for a retirement model that provides a comfortable and independent lifestyle for as long as possible, combined with the support systems needed in old age. Life rights potentially offer the highest level of support for those who can afford it, since the life-right owner exchanges profit for peace of mind in respect of services and freedom from the burdens of home ownership.

Lifelong security

In essence – and in theory – a life-right scheme offers you (and your spouse/partner) a home for life without all the responsibilities of full ownership and at a more affordable price than you would pay for outright or sectional title ownership of a similar property. In effect, you are buying a lifetime lease, paid upfront, but with the HDSRP Act assuring you of the same security of tenure you’d have with conventional ownership. And since the property does not change hands, life-rights purchases are not subject to transfer or registration fees and are exempt from VAT – a considerable saving, as any property owner will know.

As part of the “for life” tenure proposition and to make the villages more attractive to people looking for a supportive environment, most life-right schemes include communal facilities and services – for example, lounge and dining areas and residents’ transport – and offer some level of care and assisted living, from on-call careworkers and nurses to full-time frail care.

You need to be at least 50 years old to be eligible for retirement-village living and the purchase price is a fixed capital amount, paid in a lump sum or in instalments depending on the terms offered by the developer or seller. In most cases, when both partners have died, the original capital investment is given back to their estate without interest … although new financial models are being created all the time and anything is possible, says Rob Jones, chief executive of retirement property consultancy Shire Retirement Properties.

“In South Africa, at termination, a life-right contract can provide zero return at termination, or the initial capital amount plus up to 25 percent of the capital gain on the property … or anything in between,” says Jones. “What most people don’t take into account is that those operators who give zero returns are probably selling the life right relatively cheaply (or they should be!), while those that offer a share of the gains are certainly selling the life right at a higher price – perhaps closer to the price of a comparable sectional title or full-title unit. Generally speaking, a life-right price should be lower than the price of buying the title to an equivalent dwelling.”

The 2017 Alexander Forbes Benefits Barometer supports this, giving R1.3 million as the starting price for a life right in a retirement village, compared with between R2.3 and R3.2 million for sectional or full title. Some villages offer rental options, but these come at a very high price: research by the retirement income specialists Just Retirement indicates that renting in an upmarket village can cost R8 000 a month, depending on your age and gender, soaring to a full cost of as much as R59 000 a month if you rent and need full frail care. Costs increase year-on-year by about three percent above inflation, according to Just Retirement.

Jones says developers who invest in life-right properties are in it for the long-haul; there are no quick fortunes to be made, however expensive the schemes may seem. “Returns are good, but not in the short-term,” he says. “In most life-right contracts the developer gets to keep all the capital gains realised over the contract period and, in return, provides maintenance services and ‘trouble-free’ living in the village. The best life-right operators do not quibble over maintenance issues and maintain the properties very well; they are, after all, protecting their own investments and need to turn over ownership many times in order to realise their return.”

Some developers offer a so-called “deferred purchase” option, says Jones. This operates similarly to the “balloon” payment that makes a luxury car more affordable: a percentage of the purchase price – in the case of a life right, up to 15 percent – is held over until the end of the contract.

“The deferred portion of the purchase price is subject to interest and is due and payable at termination, significantly reducing the returned capital,” says Jones. “Most purchasers who use this option are not concerned about the returns and simply want the lowest possible purchase price. Many of them have no heirs, or heirs who do not need the capital, in which case the funds are often earmarked for the charities of their choice in the life-right contract.”

Surprisingly, the price of a life right is the same, whether you buy at age 50 (with the prospect of a possible 40 years of tenure, or even more), or at 80, with 10 or 15 years ahead of you. Says Jones: “There are some life-right villages internationally that vary the price with the age of incoming residents; I am aware of one in Spain that offers this benefit to older purchasers. It is not available in the South African market, largely due to the unpredictable nature of the financial model. But I foresee it being offered at some stage, probably by one of the larger operators who can weather the potentially unstable cashflow outcomes.”

Freedom from responsibility

Relief from all the hassles that come with property ownership is often the most attractive thing about life rights, says Jones. The responsibility for maintaining the properties lies with the developer/owner and residents are not individually liable for insuring their properties, or for paying rates and taxes. “For retirees who like this mode of purchase, capital growth is not the driving factor,” says Jones. “Many buyers are much more concerned with making sure their partners are not left with all the property problems after they themselves are no longer around.”

The HDSRP Act requires a developer to appoint an independent managing agent to run the property and to make sure there is a residents’ association to represent the residents’ interests. While the Act gives life-right owners certain management rights, in the most successful villages they cede these rights to the managing agent, for their own convenience and for the sake of efficiency, says Jones.

“Because the law is not very clear (or good) when it comes to dealing with life rights, this is a practical, workable approach for life-right schemes,” he says. “The village is more successful in the long run because the buildings are well maintained and the infrastructure is provided for services that the residents need. The residents are still very much involved – for example, in considering the consumption levies and working with the managing agent to ensure that costs are contained.”

He says developers and managing agents are often ill-prepared, when a retirement village opens, to deal with the considerations of residents or to communicate how things can work to the benefit of all stakeholders, so conflict arises. “This may be exacerbated by the innate (and sometimes well-founded) suspicion people have of the motives of developers and managing agents,” says Jones. “So both of those parties need to illustrate their reasonableness and willingness to take input from residents seriously. The reputation – and therefore the resale value – of a village depends on it.”

 The levy question

Levies are set up when a village is established and the HDSRP Act requires developers to hold them as advertised for the first year and to provide levy estimates for the next two years. The managing agent manages levy collection and works with the residents’ association to revise levies annually according to the budget.

Most information on life-rights schemes includes reassuring assertions that levies are both affordable and transparent, since residents are not responsible for maintenance of their properties or for rates and taxes. Levies, then, should cover consumables, such as water and electricity, and the use of facilities and services provided by the village. But what’s to stop the developer from raising the levies unfairly after the first three years?

“In theory there is always a risk of unwarranted increases in annual levies,” says Jones. “However, if there is a well-established residents’ association, this can be avoided through the development of a positive relationship between the life-right developer/operator and the association. If it does happen that levy increases seem excessive, or there are other persistent problems, such as neglect of maintenance or loss of services, the residents’ association can insist on the intervention of an internally appointed mediator. That is usually the best route, initially, but if it fails, the residents do have recourse to the Community Schemes Ombud Service ( Ideally, the options for resolving disputes should be spelled out in the life-right contract, so that matters do not quickly escalate to litigation.”

It’s all about the contract

In this minimally regulated environment, there is a distinctly pioneering spirit about the way some developers create life-right schemes, if Jones’s expert assessment is anything to go by. Few developers take the trouble to develop a strong financial model, he says, and many go into it without much thought at all. As a result, he has more than once been called in to help revise a failing scheme … even a scheme that was part of a “fairly large group”.

What does failure look like? Jones says it is a “very tricky situation” when a development – or a developer – gets into financial difficulty, but in most cases, the village is taken over by another operator, or raises the funding needed to continue using the assets of the village as collateral for loans.

“A life right village could (in theory) be converted to a sectional title village, but the calculation of value due to the original owner is complex and I have (thankfully) not yet had to assist with such a situation,” he says. “This underlines the need to purchase from the right sellers of life rights, and to take an active interest in the wellbeing of the owner.”

It is impossible to overstate the importance of scrutinising the life-right contract in detail and taking advice from a property lawyer and/or a financial adviser before signing on the dotted line. While contract terms vary significantly from development to development, the HDSRP Act does offer some protection for the purchaser by spelling out exactly what information must be provided in all contracts. Any contract that does not meet the requirements of the Act is invalid.


Q: What information can a prospective buyer not do without?

Rob Jones:

  • A thorough understanding of the financial commitment and implications;
  • Knowledge of the reputation and track record of the developer/operator; and
  • The nature of the services in the village, including things like laundry, domestic services and catering. The most important service, though, is care. Ideally, a home-based care service should be available, but when that is no longer adequate, a care centre should be available with rooms for frail care and memory care (dementia).  Memory care units should be designed specifically for the purpose.

Q: What if an owner has to move out because of extreme ill health or other circumstances?

RJ: He or she simply terminates the contract, but there may be a considerable wait for the return of the original investment. This happens only once the right has been resold and paid for – a process that tends to move faster in established villages with well-managed waiting lists. There is no legal limit on the time it takes to refund the owner, but if a right is slow to sell, many life right operators will allow for some other intervention, such as appointing other sales agents, reducing or eradicating levies, or even paying out the owner in full or part. Another option is rental of the unit to offset costs in favour of the life right owner.

Q: Can a developer terminate a life right?

RJ: Yes; the most likely reason is that an owner is no longer capable of living independently. This is normally not a unilateral decision, but taken in consultation with the resident and a multidisciplinary team that includes the personal physician and family. In the exceptionally rare circumstance that a resident refuses to conform to the rules of the estate, the operator can resort to termination (but then so can the life-right purchaser).

Q: Can the developer raise special levies over and above the consumption levies?

RJ: There is some uncertainty around this. An attorney I consult with believes the HDSRP Act does not allow for special levies at all, but I think this applies only to life rights, as the tenants are not property owners and the landlord has the responsibility of improving and maintaining the property. This is one of many aspects of the law that need attention.


The HDSRP Act contains a number of prescriptions in respect of life right contracts, says attorney Nanika Prinsloo, a director of Prinsloo & Associates Attorneys in Somerset West.

  • The sale agreement must be in writing and signed by both the purchaser and the seller, or their authorised agents. Identification of the parties must include full names, ID numbers, addresses, registration details of companies/trusts, and so on.
  • There must be a precise description of the legal grounds on which the life right is sold. The developer must have the legal right to sell and the development should have been registered in terms of the HDSRP Act.
  • What the purchaser is buying must be described in detail. The period of the life right and any limitations and rules that apply to the exercise of the right must be spelled out. It should leave no room for error.
  • The agreement must contain a statement as to whether the title deed on the land has been endorsed. When a piece of land, the development is registered with the Deeds Office – in other words, the Registrar puts a stamp on the original title deed noting that the endorsement has been done in terms of the Endorsement of the Title Deeds Act of 1990. A developer is not allowed to sell a life right in a retirement village unless the title deed has been endorsed at the Deed’s Office.  Without that endorsement, a developer who proceeds to sell a life right is committing an offence and can be fined R20 000 or sent to jail for five years.
  • The contract must clearly describe the land to which a life right is being sold, providing the erf number as well as the unit number (if any), the size of the property and the magisterial district.
  • The seller must provide evidence of his or her right to sell the life right on the property. If the seller is the owner of the right, rather than the land, he or she must provide details of the owner of the land and evidence of the purchase agreement. If there is a bond on the property, all the relevant details must be supplied.
  • The purchase price must be set out in the agreement, plus the amount of interest that will be levied on the purchase price if it is paid off. If the amount is to be paid in instalments, the amount of each instalment must be stated, as well as the dates on which payments must be made.
  • In terms of Section 6 of the HDSRP Act, a developer may not receive any monies from the sale of a life right in a retirement village unless an architect or a quantity surveyor has issued a Section 6(1) certificate stating that the housing development scheme concerned has been erected in accordance with any approved building plans, town-planning scheme and local authority by-laws.
  • The contract must contain a clause confirming that a copy of the certificate has been given to the purchaser, or giving a date by which the certificate will be supplied.
  • If any services are to be rendered in the retirement village, the contract must contain a statement setting out where the services will be delivered, when they will be delivered and what rights and obligations the purchaser has in relation to those services, so ther is no doubt how they may be used.

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