Deferred management fees in retirement properties explained

A deferred management fee, also called an event, exit or transfer fee, is a charge written into some retirement leases and payable when the home is sold or its occupancy changes, usually as a percentage of the sale price. Age UK says most housing-with-support schemes charge 1% or 2%, while some newer schemes with extra facilities charge 10% or 30%.

At a glance

• The lease decides whether a fee applies, when it is triggered and how it is calculated.
• Triggers include a sale, sub-letting or a change of occupancy, such as a new partner, relative or carer moving in.
• ARCO says fees in integrated retirement communities often rise by 1% to 2% for each year of occupation, up to a maximum.
• The Law Commission recommended a code of practice rather than a ban, in a report published on 31 March 2017.
• In July 2026 the government said it will require a bespoke annual report for leaseholders who pay a fixed service charge and an event fee.

What is a deferred management fee?

The Law Commission, ARCO and Age UK use several names for the same family of charges: event fee, exit fee, transfer fee, contingency fee and deferred management fee. ARCO says the label matters less than what the fee is used for. The fee is set out in the lease, is payable when the event happens, and is usually linked to the sale price. It is called “deferred” because you pay for the service and facilities later, from your housing wealth, instead of paying more through the service charge each year.

ARCO says operators use the money for major repairs and refurbishment, maintaining and improving communal facilities, staffing and shared services, and sales administration. It also says it can support fixed or capped monthly charges. These are the trade body’s own descriptions.

The Law Commission noted that event fees can make specialist housing more affordable, which is why it recommended regulating them instead of abolishing them. ARCO says deferring the cost can allow lower monthly management charges and widen the buyer pool. The risk is that people who do not understand the fee, or who learn about it late, may find it expensive and hard to leave. A fee that rises each year of occupation also affects a long stay differently from a short one.

When is the fee charged?

Age UK says fees are usually triggered by a sale, sub-letting or a change of occupancy, such as a new partner, relative or carer moving in. The Law Commission found in 2017 that fees can be hidden in complex leases, that leaseholders can be charged unexpectedly, including when a spouse or carer moves in, and that they are often disclosed too late for buyers to factor them in.

The Law Commission recommended limiting when a fee can be charged. The government said in 2019 that it would consider succession rights for spouses and live-in carers.

How much is it, and how is it worked out?

These are not caps, and your lease may differ. The illustrations below are simple arithmetic, not quotes.

• A 1% fee on a £250,000 sale is £2,500.
• A fee of 2% for each year of occupation, with no cap reached, on a £300,000 resale after eight years is 16%, or £48,000.
• A 10% fee on a £300,000 sale is £30,000, and a 30% fee is £90,000.

Because the amount tracks the sale price, it also moves if house prices rise or fall. Ask for a worked example at a sample price and at a lower and higher price.

What does the law say?

Law Commission and early regulators

The Office of Fair Trading looked at transfer fees in retirement leases from 2009, closed its case in April 2013 after some landlords gave undertakings, and published principles in February 2013 for how landlords should enforce them. The Law Commission published its final report on event fees in retirement properties on 31 March 2017. It recommended a new code of practice approved by the Secretary of State, limits on when a fee can be charged and in some cases how much, clear standardised information early in the purchase, and in most cases that the fee should not be payable if the landlord breaches the code. The government’s response in March 2019 accepted the report and said it would implement the recommendations except for two issues it would explore further, but no code of practice has yet been enacted.

The Competition and Markets Authority

In August 2023 the CMA said it was aware of issues with retirement homes, including charges imposed on residents when they leave or sell, which may be high and unpredictable. It said it would review current practice before deciding on further action. We could not find a published outcome from that review as at 9 November 2026, so treat the CMA position as a stated concern, not a rule.

Leasehold and Freehold Reform Act 2024 and 2026 reforms

Section 83(2) of the 2024 Act carves fixed or pre-calculable payments under an age-restricted lease (on grant, assignment, termination or change of occupier) out of the estate-management “administration charge” rules in Part 5. It also extends service charge rules to fixed charges, though those changes are expected from 2027 onwards. At present, GOV.UK says you cannot apply to a tribunal about a service charge if you pay a fixed charge. In July 2026 the government responded to its consultation by saying it will prescribe a bespoke annual report for leaseholders who pay a fixed service charge and an event fee, requiring landlords to disclose the nature of the fees. The response covers England only.

We found no law that caps the percentage a retirement lease may charge, so the lease terms and the disclosure you receive matter.

What do the codes of practice require?

The ARCO Consumer Code, approved by the Chartered Trading Standards Institute, applies to ARCO members. ARCO says event fees must be disclosed at the initial enquiry stage in the Key Facts document and explained well before you commit. Age UK adds that covered schemes must explain transfer fees with realistic worked examples, including how much goes to a reserve fund and who receives the fee. The Retirement Housing Code for private retirement housing is a separate code. Age UK says its Handbook must cover resale arrangements. Age UK notes that neither code binds every scheme.

What should you do before you buy or sign?

1. Ask in writing whether a fee applies, what triggers it and how it is calculated.
2. Ask who receives the fee and how much, if any, goes to a reserve fund.
3. Request a worked example at a sample sale price and after five, ten and fifteen years.
4. Ask what happens if a partner, relative or carer moves in, or if you move to a care home and let the flat.
5. Take the lease to a solicitor experienced in retirement leases. LEASE says retirement leases are very difficult to vary after purchase.
6. Tell your family what the fee is, because it can affect what your estate receives when the flat is sold. See lasting power of attorney for planning ahead.

The same questions apply in integrated retirement communities, retirement villages and resale retirement flats.

Frequently asked questions

What is a deferred management fee in a retirement property?

It is a fee set out in the lease and payable when the home is sold or occupancy changes, usually as a percentage of the sale price. It is also called an event, exit or transfer fee, and may allow lower service charges while you live there.

How much is a deferred management fee?

Age UK says most housing-with-support schemes charge 1% or 2%, and some newer schemes with extra facilities charge 10% or 30%. ARCO says fees in integrated retirement communities often grow by 1% to 2% a year, up to a maximum.

Can event fees be challenged?

The lease is a contract, and LEASE says retirement leases are very difficult to vary after purchase. GOV.UK says you cannot apply to a tribunal over a fixed service charge. Take advice from a solicitor or the Leasehold Advisory Service if you think a fee is unfair.

Are event fees banned or capped?

We found no law that bans them or caps their percentage. The Law Commission recommended regulation, not abolition, and the government has so far announced disclosure measures. Check current rules with a solicitor, because reform is continuing.

Do you pay the fee if a carer moves in?

It can be, if the lease says so. Age UK says transfer fees can apply when occupancy changes, for example if a new partner, relative or carer moves in. Check this clause before you buy, and ask for the answer in writing.

Where to get help next

Compare the full cost picture in retirement home costs in the UK and read retirement flats for sale before viewing. The care glossary explains related terms, and find care helps with support options. The Age UK Advice Line is 0800 678 1602, and the Leasehold Advisory Service gives free lease advice.

Sources

• Law Commission: Event fees in retirement properties
• Age UK: Factsheet 2, Buying retirement housing
• ARCO: Event fees in integrated retirement communities, facts not myths
• CMA: Update on work in the housing sector
• GOV.UK: Government response, strengthening leaseholder protections over charges and services
• Leasehold Advisory Service: Event fees

Reviewed by The Care Panel team on 9 November 2026. This guide is general information about care in England, not legal, medical or financial advice. Rules and rates change; check with your council or an adviser before making decisions.