Imrah

A hard lesson from administering my late mother's estate: read the fine print on life rights before your parents sign one. For those unfamiliar: a life right is a popular retirement-village model in South Africa. You don't buy the property. You pay a large lump sum (often R2m+) for the right to occupy a unit for the rest of your life. The operator retains ownership and the title. When the holder dies, here is what nobody really explains up front. 1. The operator takes a fixed chunk regardless of how long you lived there. Typical contracts deduct around 40 percent of a notional "Listing Consideration" as the operator's effective fee, amortised over five years. If your loved one lives in the unit for two years, three years, or even just under five, that 40 percent disappears anyway. My mother paid R2 million in 2021. Five years later, the estate stands to receive less than half of it back. 2. The estate keeps paying levies after death. Indefinitely. The contract terminates automatically when the holder dies. But you, as the estate, remain liable for the full monthly levy, rates, and consumption charges until the operator finds a new buyer. There is no deadline. No reasonable-time obligation written in. We are six weeks past hand-over and the invoices keep arriving. 3. The estate cannot use, let, or even allow family to enter the unit. The right to occupy was "personal in nature." It died with the holder. The estate cannot put a tenant in, cannot let it on Airbnb, cannot even allow family to stay there without the operator's written consent. Every mitigation lever sits with the operator at their sole discretion. 4. The operator has zero incentive to re-sell quickly. They hold your capital interest-free until a buyer is found. They earn the levy every month you wait. They earn a remarketing fee on re-sale. The longer they take, the better for them. The worse for you. 5. The contract usually contains a CPA exemption-by-design. Most of these schemes acknowledge the Consumer Protection Act on paper, then carve themselves into clauses that allow exactly the kind of one-sided continuation of obligations the CPA was meant to police. Sections 48 and 52 of the CPA, and the Constitutional Court line on fairness in contract (Barkhuizen, Beadica), give real grounds to push back. But you have to know to push. If you or a family member is considering a life right, please: - Read the full agreement including every annexure, not just the marketing brochure. - Model the worst case: holder dies within 3 to 5 years of taking occupation. - Calculate the estate's expected net return, including post-death levy bleed if re-sale takes 6 to 12 months. - Get independent legal advice before signing. Not advice from the village's referred attorneys. - Ask explicitly: what is the operator's contractual obligation to re-sell within a reasonable time? If the answer is "none," walk away. There are genuinely good retirement villages and well-structured life rights out there. But the structural risk to the estate is rarely disclosed up front. If you've been through this and want to compare notes, please reach out.