Q?What is the Life Right Act or what is the Act?
  1. The relevant Act is the Housing Development Schemes for Retired Persons Act, No. 65 of 1988 (“the Retirement Act”).

  2. The Retirement Act does not refer to “life rights”, but instead to “housing interests”, although such interests are commonly called “life rights”, because they are often held for the lifetime of the holder.

  3. A “housing interest” is a right which entitles the holder to remain in occupation of a specified accommodation unit until the holder passes away, or until the occurrence of some other specified event (such as the holder failing to pay levies, or becoming unable to live either independently or with assistance in the unit, or choosing to dispose of the interest).

Q?How old should you be to buy under this method and is there an age limit?

A holder can buy at any age as an investor, but can only be an occupant from the age of 50.

Q?Who is the seller when I pass away or move to another place?
  1. If the holder passes away, the developer or owner of the property sells the housing interest to a third party.

  2. When the housing interest is sold to a third party, part of the loan consideration paid to the developer/owner by the third party, is paid to the estate of the deceased holder.

  3. The same applies if the holder does not pass away, but simply chooses to sell and move on. It is only the developer/owner which is entitled to sell the housing interest; the holder is not entitled to do so.

Q?Can I sell my Life Right if I choose to move somewhere else?
  1. Yes, the holder can sell at any time.

  2. The market value of the housing interest will be determined by the developer in consultation with the holder.

  3. The housing interest will be offered to prospective buyers on the waiting list, and to other prospective buyers, if necessary.

  4. If the developer succeeds in selling the housing interest, the balance of the compensation received by the developer, less the amounts referred to below, will be paid to the holder :

    • Between 3.5% and 7.5% of the compensation (depending on how long the holder has retained the housing interest) will be paid to the management association as a contribution to the levy fund.
    • 7.5% of the consideration will be paid to the developer, as a sales, marketing and management fee.
    • There will be deducted from the compensation, and paid to the developer or the management association (as the case may be) all amounts owed by the holder for outstanding taxes, outstanding levies and other amounts, the cost of any necessary repairs to the accommodation unit, and the cost of cleaning the interior of the accommodation unit.
Q?What security of tenure do I have in respect of a Life Right?
  1. As the holder of a housing interest you will have excellent security of tenure, on condition that you continue to pay levies and all other amounts due to the management association.

  2. The property on which the holder’s accommodation unit is situated, can be sold and used for other purposes only if an overwhelming majority of the holders agree to this, and only in certain specified circumstances.

Q?How are levy increases controlled

Levies are set by the management association. Each holder is a member of the management association, and will have a vote concerning levies and levy increases.

Q?Can I purchase a life right with anyone other than a person I am married to?
  1. A holder can acquire a housing interest with any one or more co-holders.

  2. A holder does not need to be married to a co-holder or a co-occupant.

  3. A holder who acquires a housing interest with a co-holder who is not his/her spouse or civil union partner, would obviously be advised to conclude a formal agreement with the co-holder, to protect both of them.

Q?Do I have to pay any additional cost i.e. transfer duty?

A holder does not pay transfer duty or VAT to acquire a housing interest.

Q?Can I make changes to my unit/apartment?

If the accommodation unit is yet to be built, certain changes and preferences can be negotiated with the developer. If the unit has already been built, any changes must be approved by the management association (of which the holder is a member). The holder carries the costs in both cases.

Q?What happens to my initial deposit?

The holder’s deposit (or initial payment) is paid to the developers’ attorneys, and held by them in trust, with the interest for the account of the holder. The deposit is paid over to the developer only when the holder actually acquires the housing interest, namely when the accommodation unit is ready for occupation by the holder.

Q?Do I still have to insure the contents of my unit?

Yes, the movable property at the unit, as well as damage to doors, windows, electrical and electronic equipment, is the responsibility of the holder.

Q?Are we allowed to bring our pets with?

Indeed! Small pets with the approval of the management association, which must be managed within the house rules.

Q?What if my children wish to assist me financially?

The holder’s contract with the developer and the management association can include a term that, if and when the holder disposes of the accommodation unit, some or all of the compensation due to the holder be paid to the holder’s children, or other third parties.

Q?Are there any restrictions on the number of guests staying over?
  1. The accommodation unit may be permanently occupied by only two people, both of whom must be over the age of 50.

  2. Visitors can stay at the accommodation unit with the permanent occupants for short periods.

  3. Visitors may not stay at the accommodation unit for longer than 14 days, except with the permission of the management association.