Island Life Magazine Ltd April / May 2016 | Page 125

LEGAL

Terence
Willey & Co
Terence Willey: 01983 875859
Mark Willey: 01983 611888
www.terencewilley.co.uk

Potential issues with
retirement flats

T

he purchase of retirement flats
have become increasingly more
popular over the last decade
and whilst offering substantially more
facilities that one would expect in a
standard flat complex, it most certainly
cannot be considered without a
premium cost.
To this extent retirement flat
property Leases will often contain
specific restrictions as to complying
with age restrictions affecting a right
to occupy and higher maintenance
and management provisions to
accommodate varying facilities.
Such facilities may include communal
and guest lounges, in-house cafés and
in some cases even indoor swimming
pools. In more recent times the provision
of what is known as an ‘event fee’ clause
has been introduced requiring the

owner of the flat to pay a fee in certain
other circumstances. Quite surprisingly
such a fee may be incurred if a carer
moves in or the flat owner is taken into
residential care.
In addition, fees are often levied in the
event of a decision to sub-let the flat or
take out an Equity Release Mortgage.
Before signing any Lease care should
be taken as to the implications of these
additional restrictions and ‘event fee’
clauses. Where difficulties arise with
individuals in meeting these costs, in
certain circumstances an agreement can
be reached for such fees to be deferred,
together with outstanding service charge
fees, pending disposal of the flat with the
proceeds either going to the Developer or
to a Management or Maintenance Fund
with an interest provision for the privilege.
It is not unusual for such Leases to

require a percentage fee to be paid upon
disposal of the flat which can be as high
as 30 per cent and can often come as a
surprise to families and moreover the
Beneficiaries in an Estate of a deceased
family member. There may also be a
requirement to first offer the flat back to
the Developer upon a sale at a market
valuation or a fix