Do your parents know where they want to live in retirement? This is one of the biggest and most important decisions they’ll have to make – and they need to ensure that whatever option they choose is sustainable for the long term. After all, the last thing they’re likely to want do once they’ve settled down in retirement is move again after a few years because their home no longer suits their needs.

While you can’t make this decision for your parents, you can help them weigh up their various options. Go through some questions with them to help them identify their needs – e.g. which location will suit them best in terms of proximity to friends and family, doctors, shops, etc; what are their potential healthcare requirements now and in the future; what ‘feels right’ for them?

It’s also a good idea to discuss the various purchase models available. Here’s a look at some of the options in the market today.

Freehold
Your parents may want to stay in their freehold family home. With this option, they’ll continue to be responsible for the upkeep of their home and garden – and it’s worth considering whether they’ll want to manage this maintenance as they grow older.

Sectional Title
This type of retirement village typically provides access to a community and various on-site facilities. Residents own their units within the development and are responsible for managing the village through a Home Owners Association or Body Corporate. In this model, special levies may be raised to fund upgrades or maintenance projects. If the home and village has been well maintained over time, residents may benefit from property appreciation.

Life Right
In this model, the developer retains ownership of the property while the life right holders (both partners) are guaranteed security of tenure for life and access to all the estate’s facilities. Life rights are protected by an Act of Parliament and are the most secure property right in South Africa. The villages or estates are managed by the life right developer in terms of finance and administration, building and garden maintenance, food and beverage facilities, club house facilities, and security and health care services. It’s worth noting that special levies are prohibited in life right developments.

Share Block
In this retirement scheme, purchasers become shareholders of the entire estate. As with the sectional title model, residents must self-manage the village, run their own finances and administration, and potentially employ a third-party managing agent to operate the village. As every resident is a shareholder, reaching agreement on important decisions may be difficult, which may be why this model has not been adopted more broadly.