Already well-established on the east coast, the land lease model is rapidly gaining momentum in WA and Edenlife Communities is at the forefront of this development.
Land lease communities - what are they?
The land lease model is simple: Edenlife residents enjoy a lifetime lease on the land (up to 99 years) while owning their own home. Your Residential Site Agreement (RSA) grants you the right to occupy your ‘site’ and use all facilities within the Edenlife community for a rental fee, which also covers taxes, settlement fees and any ongoing costs of land ownership. When selling, 100% of the profit goes into your pocket; no exit fees, no stamp duty.
Leasing instead of owning the land on which your home sits simply makes good financial sense. Edenlife residents get more bang for their buck, owning a brand new, low maintenance home in a secure gated environment with access to a fantastic array of modern facilities for residents’ exclusive use.
Your RSA is governed under the Residential Parks (Long-stay Tenants) Act 2006 and the Amendment Act 2020. The Acts govern site agreements, such as that between Edenlife and the residents who purchase a ‘movable dwelling’ and rents the land on which the dwelling sits. Homes in Edenlife Communities are all considered movable dwellings as they can be moved to a different location.
The first leases are for a term of 99 years. Each subsequent change of ownership will include the balance of the lease. For example, if you choose to sell your home after 10 years of occupying the site, the new owners will take over your lease with 89 years remaining. Your obligations and lease conclude once your home is sold.
Under the land lease model, you pay a site fee (fortnightly direct debit) to Edenlife. Because you don’t own the land, you aren’t responsible for paying any of the costs associated with land ownership, i.e. council rates, water rates or stamp duty. The site fee is reviewed on 1 July each year with any increase capped at 3.5% p.a.
As you pay a site fee, and if you are a pensioner, you are more than likely entitled to Commonwealth rent assistance. We can provide you with a letter for Centrelink to make the process as smooth as possible. If you would like more information on rent assistance, please visit the Services Australia website.
| Land lease | Freehold | |
|---|---|---|
| Stamp duty | ✖ | ✔ |
| Council rates | ✖ | ✔ |
| Water rates | ✖ | ✔ |
| Rent assistance (Centrelink eligibility criteria apply) | ✔ | ✖ |
| Conveyancing fees (When selling your home) | ✖ | ✔ |
It’s your home so you can make modifications. However, there are some community guidelines, which help maintain a suitable overall community aesthetic and ensure the value of each resident’s home is not negatively affected by the modifications to another. It is the responsibility of the homeowner to ensure that any modifications comply with local council regulations including seeking building approval when required.
The Residential Site Agreement secures your lease on the site on which your home is located for a period of up to 99 years, as specified in your site agreement. This agreement remains protected and in force even if the ownership of the community changes.
Depending on your will, the home can either be sold with all profits going to your estate or a family member may wish to enter into a new site agreement and move in. However, they would first need approval by the Community Manager.
Many land lease communities charge a deferred management fee to residents when they sell and it can be as high as 30% of their home’s sale price. Edenlife Communities DOES NOT charge a deferred management fee and any capital gain you make when you sell your home is 100% yours to keep.
In comparison, an Edenlife lifestyle community offers a very affordable option to people looking to downsize as there is no deferred management fee, no requirement to refurbish prior to selling and only one standard agreement that is the same for everyone.
No, land lease communities differ from retirement villages for several key reasons:
- Importantly, land lease communities operate under different legislation.
- Retirement villages have different ingoing, outgoing and ongoing costs, e.g. deferred management fees are often 30% of the sale price and you are required to refurbish the home at your cost when you sell.
- Retirement villages can have various types of agreements.
- In comparison, an Edenlife community offers an affordable option to people looking to downsize as there is no deferred management fee, no requirement to refurbish prior to selling and only one standard agreement that is the same for everyone.