A reader is approaching retirement and would like to consider his accommodation options as his current dwelling is too large to maintain.
He says he has certain requirements such as security and being around people of his own age.
The reader has viewed a few options in retirement villages but would like to consider his rights to be sure his interests are protected as he cannot afford to be without accommodation in his old age.
See the reader’s question here.
The Housing Development Schemes for Retired Persons Act deals primarily with the interests of persons in retirement schemes.
The act provides for certain legislative requirements where a retirement scheme falls under its auspices.
From the outset, however, it is important to understand that not all retirement schemes fall under or have the protection of the act.
The definition of a housing development scheme means any scheme where housing interests are earmarked for occupation, such as sectional title or share-block schemes, excluding time-sharing.
The definition also refers to “housing interest” which, in relation to a housing development scheme, means any right to claim transfer of the land or to use or occupy that land.
From these definitions it is clear that the retired person, defined as someone who is 50 years or older, has a right of ownership or occupation of the housing interest.
The concept of “right of occupation” is also defined in the act which, in summary, requires the payment of one or more sums of money by the retired person.
As a result, it allows the retiree to remain in the housing development scheme for the duration of his lifetime – the so-called life rights.
But that right of occupation does not permit him to take ownership of that housing interest.
Should the reader consider the acquisition of a housing interest from a developer, the act is clear and sets out certain requirements that must be contained in the contract between the parties.
It would be useful to our reader to consider and contrast these requirements against any draft contract put to him by a developer.
A retired person should consider whether or not a housing interest under the act is the best option as only the retired person or his spouse may occupy the dwelling.
Should the retired person wish for anyone else to occupy the house, he requires the written consent of all the holders of housing interests in the scheme.
Due to legislative restrictions in the act, our reader may wish to consider an alternative form of housing that may be less restrictive.
He could, for example, purchase a small dwelling, which could give him more flexibility and prove an investment for his heirs.
A housing scheme may appear to fall within the ambit of the act but, due to non-compliance with the requirements of the act, it may not.
This non-compliance, however, may permit the reader the flexibility he may require while providing much of the security he would have had under the act.
If, for example, the reader chooses to live in a retirement village that is a sectional title scheme that does not fall under the act, it should nevertheless comply with the provisions of the legislation applicable to sectional title schemes.
Such a scheme may provide our reader with sufficient protection and flexibility.
Depending on the financial situation of the reader, he may wish to consider the so-called life rights option, in which case it would be advantageous to secure a housing interest where that form of right of occupation falls within the ambit of the act.
Taking into account our reader’s requirement that he does not want to be in a position where he has no accommodation in his older years, this may be a better or more secure solution.
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