The elderly facing hidden fees on retirement properties and homes


As the age demographic of our society has changed over the last 2 or 3 decades there has been a similar change in approach to living in one’s retirement. In this period there has been a marked growth in the development of purpose-built retirement housing developments. A number of companies have sprung up whose business model is geared specifically to this sector of housing.

A great deal of the publicity material for the many new developments directed at the elderly shows healthy, happy and active elderly people playing with their grandchildren with hazy sunshine and blue skies in the background.

The comfort of our elderly parents or relatives is paramount and these types of advertisements go a long way to entice us to consider the option of buying a retirement home, and in so doing removing the concerns of loneliness and lack of companionship.

Sadly, there is a rising practice in some developments where, having sold the idea to potential buyers who have set their hearts on the final retirement property that they will purchase, the legal papers introduce an unexpected angle to buying such a property in the form of a fee payable to the landlord on the future sale. The normal reasons for a sale are on the passing away of the property owner or they are being moved into accommodation where they will have more hands-on support such as in a nursing home.

In the case of one development, the lease refers to “a relevant percentage” being payable to the landlord on completion of the sale by the seller. The relevant % is an eye watering 12.5% on retirement properties that command prices in excess of £400,000.00. In one recent sale, the “relevant percentage” worked out at over £54,000.00, meaning that sales of retirement homes can have extortionate fees.

Other developments add on similar fees such as a 1% “contingency fee” and an additional 1% “transfer fee”.

Such fees are in addition to any estate agents fee that sellers may be bound to pay over and above the monthly service charge and annual ground rents payable. These too are also not insubstantial.

There is of course the option for the elderly buyer not to proceed with the purchase on sight of the lease terms, but if the property is the perfect fit for that person there is a huge reluctance to go back to the drawing board.

The law needs to be changed to prohibit landlords from charging these additional fees with an obligation to be placed on landlords to provide a deed of variation to change existing leases in order to remove this type of clause.

Perhaps there is also merit in consumer organisations and consumer programmes highlighting these issues so that the public can be made aware and educated about this practice.

To discuss retirement living, or any other property-related legal matter, please contact me directly or speak with another member of the Hart Brown property team. Call us today on 01483 887766, email us or contact via live chat.

This is not legal advice; it is intended to provide information of general interest about current legal issues.


David Knapp

Partner, Residential Property

David is Partner of the firm, and a qualified solicitor. David has worked at Hart Brown for 38 years, joining the firm in 1981. He...

David Knapp- Partner, Residential Property

Partner, Residential Property

David Knapp

David is Partner of the firm, and a qualified solicitor.

David has worked at Hart Brown for 38 years, joining the firm in 1981. He graduated from the City of Birmingham Polytechnic in 1980, attended Guildford Law School in 1980 and qualified as a solicitor in 1984.

David's specialism in residential property and progression throughout the firm has enabled him to build many long-lasting relationships with clients he has helped over the years and continues to do so. He has a great deal of legal and life experience and enjoys interaction with those known to him as well as newly introduced people.