What is a Loan and Licence Agreement? “A Loan and Licence Agreement is where you pay an ingoing contribution or loan (purchase price) to the Scheme Operator, and in return receive a Licence to Occupy and the right to reside in the Accommodation Unit under the terms of the Agreement. Most not-for-profit retirement villages operate under Loan and Licence Agreements”.
Under a Loan and Licence Agreement, the village operator retains ownership of the village property. The village operator also receives the interest from the loan. The capital gain from the sale of the unit is usually retained by the Loan and Licence village operator.