LEAVING THE VILLAGE
Upon leaving KGRV there are some monies the Operator receives, as well as some that you receive.
Should you leave KGRV, the Operator is entitled to 50% of any Capital Gains. That is, if the incoming resident pays a higher ingoing contribution/purchase price than the former resident, the Operator receives 50% of the difference.
If you paid an ingoing contribution of $400,000 and the next resident paid $500,000, the Capital Gain would be $100,000. Of this Capital Gain, the Operator would receive 50%, which is $50,000.
In addition to the share of capital gain, the Operator receives a departure fee (or deferred management fee). This fee is calculated on the length of your stay, at the following rates, calculated on a daily basis:
The Departure Fee is 5% for the first year and 2.5% for each subsequent year, up to a maximum of 11 years (30%), of the next resident’s In going Contribution.
If you leased a villa for $400,000 on 1 January 2014 and the villa was re-leased on 31 December 2018 for $500,000, the monies you would get back are:
|Original Ingoing Contribution||$400,000|
|Next Ingoing Contribution||$500,000|
|Profit on re-lease||$100,000|
|Monies payable to Outgoing Resident|
|½ capital gain on re-lease||$50,000|
|Less Departure Fee|
|5% of $500,000 (1st Year) + 2.5% of $500,000 x 4 years = 15%||$75,000|
If there is any capital loss, it is borne by the Outgoing Resident. For example, in the case of a loss, you would get back the amount paid by the Incoming Resident, less your Departure Fee.
Note: In addition to the above, you may be liable to recurrent charges or a percentage of recurrent charges for the period after you vacate the Premises up to the date the Operator enters into a new Residence Contract with a new resident, in accordance with the Retirement Villages Act 1999.
Once a Resident has permanently vacated the Premises, the Resident is not liable to refurbish (or pay for the cost of the refurbishment) of the Premises. The Operator is liable to refurbish the Premises. However, the Operator is not required to refurbish the Premises until a new resident is found for the Premises.