Lendlease is trialling a new contract model that offers a choice of four payment options to its residents, including a pre-paid plan, a refundable contribution and a pay-as-you-go model.
The new scheme is designed to appeal to people who are interested in retirement living but are concerned about the impact of deferred payments on their children, the Sydney Morning Herald reported last week.
The trial of the new options is being rolled out at 15 of its 71 retirement villages, along with Lendlease’s existing contract option of a deferred management fee.
Under the pre-paid plan, the resident would pay the management fee up front and retain the full capital gain or loss on the property. The exit fees would then be about 1-2 per cent in sales commission and $10,000-$15,000 in refurbishment costs, according to Lendlease.
Under the refundable contribution option, the resident pays a higher price up front and receives it back in full when they leave, with no exit fees. There is also a 3 per cent establishment fee payable upfront, which is not refundable.
The PAYG model would benefit retirees who wanted to let the family home to tenants so they could retain it for their estate, then fund their own accommodation cost out of the rental income.