Entering into a life rights agreement is entirely different from buying in a sectional title scheme.
The Housing Development Schemes for Retired Persons Act 65 of 1988 serves to protect elderly people when investing in a retirement village that is not a sectional title scheme. The Act specifies what the offer to purchase life rights must contain. By signing a life right agreement one commits to pay the purchase price and consent to having the right to live in the property for the remainder of life, or until you leaving the village. In the case of death or leaving the retirement village a percentage of the original contribution is retained. [Biccari Bollo Mariano Attorneys, October 2010 SS 7/10] In contrast to ownership of part of a sectional title retirement village, there is no purchase of actual real estate — life right entails only the right to live in a specific unit, the ownership is retained by the management company — the basic concept is that an individual pays a sum of money in respect of a specific unit and receives the right to live in that unit for the remainder of their life [Sifiso Msomi of Shepstone & Wylie's property department]. Life Rights assume the form of a lease, not a form of property ownership — the occupant (the agreement holder) has no rights to the title in land, only the right of use. The right to life is the fundamental right and property rights are an extension thereof.