Entry costs
To buy into a village, you’re typically required to pay a deposit and a capital sum for an occupation right agreement (ORA). The most common legal title under an ORA is a licence to occupy, which gives you a contractual right to live in a specific property within a village, but no legal ownership of the property itself or the land.

Deferred management fee
Under a licence to occupy, it’s common for the operator to retain between 20-30% of your initial capital sum; this is usually referred to as a deferred management fee.

A good way to think of the deferred management fee is that it covers the long-term costs of residing at the village, such as maintenance of facilities and communal areas, and the re-licensing and refurbishment of your property after the licence ends.

The deferred management fee typically accrues between the first 2-5 years of residing at the village and is deducted on the re-sale of your licence. The fee is calculated as a percentage (typically between 20-30%) of the initial capital sum and it accrues to the operator over a period of time (usually 2-5 years).

What the fee covers varies between villages, so it’s important to discuss the details of the fee and how it’s calculated with the sales manager.

Note: Some operators will include costs associated with re-licencing your unit – such as legal, admin and marketing fees – within the deferred management fee. Other villages will have them as separate costs. It’s important to consider this when comparing the deferred management fee percentage between villages.

Depending on the village, the deferred management fee may be known by another term such as:

Membership fee
Amenities fee
Facilities fee
Village contribution fee
Periodic or weekly costs
While you’re living in a village, you’ll be required to pay periodic (usually weekly) fees to cover day-to-day operating costs such as rates, insurance, grounds maintenance, staff wages and village services. The fee amount (and what’s included) varies significantly from village to village, so be sure to ask the sales manager for details.

Fees may increase over time (with appropriate notice from the village), or they may remain the same during your entire occupancy (these are generally marketed as fixed fees).

What’s included and excluded from village fees?
Every village is different. However, in most cases, you will be required to pay separately for things like contents insurance, phone & internet, household power, and any additional services you choose, such as housekeeping, meals or healthcare.

Some of these costs may be covered in the fee if you live in a serviced apartment. Be sure to ask the village sales manager for a full breakdown of inclusions and exclusions by property type.

Leaving costs
Exit costs often depend on the circumstances in which you leave the property. For example, whether you leave the village altogether or transfer to a different property within the village (e.g. from a villa to a serviced apartment).

Some potential leaving costs to be aware of include:

The deferred management fee. If you leave the village, the deferred management fee will be deducted from the capital sum you receive when the operator re-licenses your unit. If you transfer to another property in the village, it’s important to ask the sales manager how your deferred management fee will be treated.

Ongoing weekly or periodic fees. Your occupation right agreement will set out whether weekly fees cease when you provide vacant possession or continue until your unit is re-licensed. If the fees continue, the operator must reduce them by at least 50% by the later of either:
The date you stop living in the unit (and remove all your possessions) or
Six months after the date your licence to occupy terminates.

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