Hello, this is Brian Herd talking to you about the difference between a retirement village and a manufactured home park.
The difference between a retirement village and a manufactured home park
With retirement, living longer, wanting to downsize but stay independent, there has been an absolute explosion in the various independent retirement lifestyles in Queensland over the last 20 years. Two in particular are very popular; the retirement village and the mobile or manufactured home park. What’s the difference? It’s important to know because they are generally speaking when you look at them a congregation or collection of older people living together usually with a community facility or services being provided, but there are important distinctions to understand.
There are major two major distinctions, a legal distinction, and a financial distinction. The legal distinction is this, in a retirement village, what you buy is not freehold, you generally buy what’s called a 99-year leasehold of your unit. So, you don’t actually own the unit you live in, be it a detached or semi-detached unit, so you buy a lease for 99 years and you pay a price for that lease.
In a manufactured home park however, you actually buy the unit that you live in, so you own the construction, the home itself. What you then do, is rent the site underneath the manufactured home, so it’s a lease of the dirt underneath the home. You own the home but rent the dirt underneath it, so that’s the legal distinction.
So far as the finances are concerned, in a retirement village, they’re quite complicated. You generally speaking pay what’s called a in-going contribution which is the price you pay for the lease of your unit and then while you’re living there you’ll continue to pay what’s called a general services charge. And when you come to leave the retirement village, you’ll pay usually to the operator amongst other things what’s called an exit fee, used to be called the deferred management fee.
Financially however, a manufactured home park simpler. What you pay when you move in is the price of the unit itself, the home and then, after you’ve moved in, you pay what’s called a site fee, which is the rent to the operator of the village to lease the site underneath your manufactured home. So, that’s the financial distinction. When you come to leave the manufactured home park, you can actually get someone to buy your unit and take over the site rent from you that you are paying to the operator before you left.
These are important distinctions. They both look the same, if you look at a retirement village or a manufactured home park, they look the same, but they are really different when it comes to the law and the finances. So, it’s important to get advice on either of them if you’re contemplating moving into them.
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