ELDERLY residents living in retirement villages are having to pay huge sums of money to housing associations after their home is sold.

The findings were revealed following a St Helens Council review into service charges residents living in retirement villages have to pay in the borough.

Retirement villages provide community living – usually for people aged 55 years or older – and have become increasingly popular over the past decade as they also have care providers on-site to provide 24-hour care, ensuring people can continue to live independently in their own homes.

Currently, there are four retirement villages in St Helens that are owned and managed by two housing associations, Your Housing Group (YHG) and Torus.

“Residents had raised concerns with their local councillors over the various service and maintenance charges and the sinking fund charge payable on the sale of a property within a retirement village,” the draft report said.

“Our enquires into the culture, procedures and policies in each of the premises we have visited have been extremely interesting.”

The review, which focused on owners and shared owners of retirement village properties, was headed up by Haydock councillor Martin Bond and Earlestown councillor Dave Banks.

A sinking fund covers the cost of major repairs and is payable upon the sale of the property.

Councillors found that, if a home-owner dies or wants to move home then the sinking fund is charged at one per cent of the final sale figure, per year of ownership.

During a meeting at YHG’s Reeve Court in Rainhill, which has 174 apartments and 32 bungalows, residents complained that paperwork provided on the scheme was “confusing”.

“Residents stated that they were issued with all the paperwork that you would expect, although it was quite confusing,” the report said.

“Solicitors locally and further afield were surprised that the sinking fund was set as high as one per cent.”

Residents told councillors they understood the supplied information when explained by solictors, but only to a certain level.

“We learnt that families could be involved from the outset but they felt the information was very misleading, and there seemed to be confusion amongst the residents of how the sinking fund is calculated and on what value,” the report said.

During a meeting with YHG representatives, councillors were told the information relating to the housing schemes is “transparent and clear”.

A YHG spokesman told the Local Democracy Reporting Service it is now looking to address some of the issues highlighted in the report.

“We welcome the findings contained in the report and are already working on the areas where recommendations have been made,” the spokesman said.

As part of the review, the task group also met with representative of Torus, which runs Heald Farm Court in Earlestown.

As with YHG residents, the sinking fund is paid when the property is sold and the charge is one per cent for each year the home is owned.

During a meeting with residents in Heald Farm, which has 86 apartments and three bungalows, residents also expressed concerns over the sinking fund.

“Residents were not very clear with regards to the sinking fund and no-one was clear of the exact amount and how it was calculated,” the report said.

It continued: “When discussing the sinking fund, residents understood it was for repairs, although they did point out that there were several repairs that were outstanding.”

During a meeting with Torus representatives, councillors were told that prospective buyers were given “clear and transparent” information and that family members were always encouraged to attend meetings.

A spokesman for Torus told the Local Democracy Reporting Service: “The sinking fund is money put aside by housing associations to cover any major work that may be required on large schemes.

“This could include funds to cover replacement door entry systems, lifts, communal lighting, roofs and drainage, for example.

“Marketing material shared with any potential home buyers clearly explains the charge, what it might be used for and when it would be collected.

“Since it is part of the lease, it is also something that a buyer’s solicitor should explain prior to any sale completing.”

The report will go before cabinet at a later date.