What is the Berea Gardens Retirement Foundation?
A Section 21 company, serving aged persons residing in the municipal area of Buffalo City. It operates five complexes across two campuses and includes a Service Centre for the use of both residents and outside members. Fixed assets exceed R175 million and are managed by a Board of Directors, all who do so in a voluntary capacity, With the exception of the Executive Director.[/accordion-item] If you have a bond-free home or similar asset, you certainly can afford to purchase a flat, and hopefully for less than the value of your existing home. Various rental options are also available within the Foundation.
Do I purchase the flat by 'Sectional Title', 'Share Block' or 'Life Right'?
All our Retirement Complex flats and cottages are sold by “Life Right”.
What is this concept of 'Life Rights'?
The right to live in a specific unit is granted to an individual at a market related and pre-determined sum. This cost sum, when transferred to the Berea Gardens Retirement Foundation, entitles the individual, and spouse, to live in that unit for the remainder of their lives, or until such time as they may need assisted-living or frail care facilities.It is important to note that:
- There is no purchase of real estate, but a granting of the right to live in the unit for life.
- There is, therefore, no transfer duty, as brick and mortar are not involved. This alleviates the need for lawyers costs, transfer duties etc.
- The unit remains the property of the Foundation and is not transferred to an individual. This must be noted in your Will.
If I am acquiring Life Rights to live in a unit, why then do we refer to purchase and sale of a unit?
This has become the norm over the years as it is easier to refer to buying and selling a unit rather than “granting and releasing of the Life Rights”. All reference, therefore, of buying and selling of units needs to be read and understood in the context of the true nature of the agreement i.e. you purchase the right to live in a specific unit.
Will my estate or I get any money back when the flat/cottage is sold?
Yes, in terms of our unique Endowment Fund.
Some people say that I will “loose money” in this scheme.
It is important to note that you are purchasing a lifestyle rather than making a financial investment in property. However, the resident will always get back money, in terms of the unique “Endowment Scheme”.
How does this Endowment Fund work?
Upon resale, the outgoing resident receives a percentage of the market related resale price. This percentage is determined by the number of years the resident has occupied the flat.For example, if a person is granted Life Rights on a flat and that person vacates the unit or passes away within the first year, then 10% of the current value of the life right accrues to the Foundation. On re-granting of the life rights, the person or his/her estate will be refunded 90% of the value at that time, with the Foundation retaining 10%. Each year thereafter, up to year 5, a further 10% will accrue to the Foundation reaching the maximum of 50% of the re-grant price, as set out in the table below:
|PERIOD OF OCCUPATION ENJOYED BY THE RESIDENT|
|UP TO||1 YR||2 YRS||3 YRS||4 YRS||5 YRS||Thereafter|
|Percent accruing to the resident||90%||80%||70%||60%||50%||50%|
|Percent accruing to Berea Gardens||10%||20%||30%||40%||50%||50%|