The major cost of leaving a village is the Deferred Management Fee (DMF) that is deducted from the original capital sum you paid when ‘purchasing’ into the village. It is to cover the cost of the management and refurbishment of the village (roading, footpaths, lighting, communal amenities etc). The industry average is approximately 27% of the purchase price.
You will also have to pay any administration, sales or legal fee that were agreed to be deducted in your contract, plus any other costs still owed to the village (such as village levy or accrued charges in the restaurant for example).
Some questions you need to ask before you enter into any signed agreement include:
- Do you understand what the Deferred Management Fee (DMF) is and how this will influence the amount you/your estate receives once you sell your dwelling?
- Are you expecting to receive capital gains once you sell? If so, you might be disappointed. How will the dwelling be sold? Can you/your estate have a say in how it is valued/marketed?
- Who pays the marketing, administration, and/or refurbishment costs?
- Will you/your estate be reimbursed for any improvement/alteration you have made to the dwelling? Or charged to remove it?
- Will you/your estate be responsible for paying maintenance costs/regular fees while the dwelling is on the market? If so, for how long?
- When will you/your estate receive payment from the sale? What if there are delays?
It’s important to consider your financial obligations, especially if you require funds to move somewhere else.
Updated: 13 Jul 2023