What are Deferred Management Fees (DMF)?

Deferred Management Fees (DMF) are a common feature of retirement village contracts. These fees are payable when a resident leaves the village, and are usually calculated as a percentage of the initial purchase price of the unit or villa, typically ranging from 20% to 30%.

DMF is intended to help fund the ongoing costs of the village and provide for capital improvements, such as new facilities or upgrades to existing amenities. The fees are typically deferred until the resident leaves the village, and are deducted from the sale price of the unit or villa.

One of the key benefits of DMF is that it can help to keep the entry costs of the retirement village affordable. By deferring a portion of the costs until the resident leaves, it allows them to enter the village with a lower upfront cost. This can be particularly beneficial for older adults who may be on a fixed income.

However, DMF can also be a source of concern for some residents, particularly if they are not fully aware of the terms of the contract. Some residents may feel that the fees are excessive or that they are not fully understood. As such, it is important for prospective residents to carefully review the terms of the contract and seek legal advice if necessary.

Deferred Management Fees are a common feature of retirement village contracts and are designed to help fund the ongoing costs of the village. While they can be a source of concern for some residents, they are generally seen as a fair way to keep entry costs affordable and ensure that the village remains well-maintained for future residents.

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