Retirement communities (sometimes known as retirement villages) are designed with older residents in mind. The occupancy of housing units is restricted to older adults. A minimum age of 50 or 55 for at least one resident is common. Some communities allow a younger spouse or adult children to live with the senior resident.

Gated retirement villages are surrounded by a wall. The community provides security, requires visitors to obtain a pass that is authorized by a resident, and restricts the length of time that younger visitors can stay. The community typically maintains its own streets and provides security patrols that enforce traffic rules. A 15-mph speed limit, designed to assure that residents can cross the street safely, is typical.

Retirement communities own and are responsible for maintaining the grounds that surround the units, as well as any amenities the community offers to residents. The community therefore mows lawns, trims trees, and maintains golf courses, swimming pools, game rooms, and other amenities that residents are free to use. 

Residents in retirement communities pay monthly dues that pay the wages of groundskeepers, security personnel, and other staff members, as well as the expense of hiring contractors to replace roofs and make repairs of common areas and amenities. While dues cover security and maintenance services in common areas, they do not include assistance to residents in their activities of daily living, although some communities offer various levels of care for an additional fee. Seniors who live alone and need assistance may find it preferable to live in an assisted-living facility or in a retirement community that offers caregiving services for an additional charge.

Residents in retirement communities either own or lease their units. Ownership usually entails the purchase of a condominium. Condominium owners typically elect a governing board that makes rules and sets dues. Retirement communities with rental units are typically owned by an entity that acts as a landlord. Some communities with condominiums may allow owners to lease their unit to age-appropriate tenants while others do not.

A lease governs the terms of living in a rental community. The monthly lease payment (plus a security deposit) is typically the renter’s only expense. When residents buy a unit in a retirement community, they often pay a buy-in fee in addition to their annual dues. While owners are not restricted by lease terms, they are governed by rules that may be amended and enforced by the governing board.

What Do Buyers Purchase?

Ownership allows a retiree to build equity in a unit. It also protects against rent increases, although annual dues may increase if the community’s shared expenses rise.

Purchasers of a unit in a retirement village should understand what they are buying. A unit owner buys everything within the perimeter walls, floor, and ceiling of the unit. Perimeter walls are walls inside the unit that define the unit’s boundaries. Exterior walls or the interior walls of another unit are on the other side of perimeter walls.

The purchaser owns floor coverings, ceiling fans, sinks, counters, bathtubs, interior doors, and everything else that is inside the perimeter walls. If any of those items need to be repaired or replaced, responsibility for doing so falls on the unit owner.

The village owns the land and everything outside of the interior perimeter walls, ceiling, and floor. The unit owner purchases an interest in the village and therefore owns exterior walls and siding, roofs, exterior hallways, sidewalks, yards, streets, and amenities in common with all the other unit owners. The village (usually through a property manager employed by the governing board) is responsible for maintaining all property owned in common outside of the owner’s unit. 

While the unit owner purchases (and is entitled to replace) floor coverings, including tile and carpeting, the subfloor to which the floor coverings are attached belongs to the village. The sheetrock that creates perimeter walls generally belongs to the village, although unit owners are responsible for damages they cause to interior perimeter walls. Unit owners are entitled to paint or wallpaper the surface of interior walls.

Responsibility for making plumbing repairs depends on the location of the problem. If a supply line that connects an interior valve to a sink begins to leak, the unit owner must fix it because the supply line is inside the unit’s interior walls. If a pipe inside the wall begins to leak, the village must fix the problem because the pipe is outside the interior walls.

Unit owners own interior walls that are not perimeter walls, but that ownership is subject to rules governing the units. In most villages, a unit owner cannot remove an interior wall (to combine two bedrooms into a single room, for example) without obtaining the community board’s approval.

What Rules Must Buyers Follow?

Every retirement community maintains rules that unit owners must follow. They agree to follow those rules in the documents they execute to purchase an interest in the retirement village.

Since rules limit the age of residents, a senior purchaser who might want to be joined by adult family members should determine whether the rules allow those individuals to live in the unit. Buyers should also understand restrictions that are placed on the length of visits, so that visiting family members do not plan to stay longer than the rules permit.

Rules can be simple or complex, depending on the community. Enforcement of the rules may be lax or vigorous. Enforcement policies may change as members of the governing board are replaced. Before purchasing a unit in a retirement village, prospective buyers should review the rules and make certain that they are willing and able to abide by them.

Communities might limit the use of amenities to residents. On the other hand, some communities set aside time for visitors (including grandchildren) to use the pool or pickleball courts.

Rules typically impose limitations or obligations concerning landscaping near the owner’s unit. For example, some villages may permit an owner to plant a flower garden along an exterior wall, provided the owner maintains the garden. The rules may instead prohibit owners from planting anything or may restrict the kinds of plants that are allowed. Gardens that might interfere with landscapers are typically forbidden, although some villages establish community gardens for the use of residents.

Home decorations on the exterior of the building — even a holiday wreath on the unit’s door — may need to be approved by the community’s board. Yard signs are typically prohibited, as are banners on the exterior of the building.

Buyers should ask for a complete set of rules before purchasing a unit. Buyers might want to obtain legal advice if they aren’t certain that they understand the rules. Finally, buyers should remember that rules can be changed by the governing board. A unit owner might be required to abide by an unfavorable rule in the future that doesn’t exist at the time of purchase.