What is a deferred management fee?
When moving into a retirement village, one of the most significant costs to understand is the Deferred Management Fee (DMF). A DMF is applied under a licence to occupy agreement, where you pay an upfront sum for your home and the operator retains a portion of that amount, usually between 20 and 30 percent, when you leave the village.
Key takeaways
- A Deferred Management Fee (DMF) is usually the largest cost when leaving a retirement village.
- Most villages charge around 30% of your entry price, usually accrued over 3–5 years.
- The DMF helps cover the long-term costs of operating and maintaining the village.
- The amount and how it is calculated vary between villages.
What the DMF is designed to cover
The DMF is designed to help cover the long-term costs of operating the village. This can include maintaining facilities, looking after communal spaces, roading, and refurbishing your home for the next resident.
How the DMF accrues
The DMF accrues over your first few years in the village, typically spread across two to five years. Once the maximum is reached, it does not continue to increase. The fee is deducted from the amount repaid to you when you leave and your home is re-licensed to a new resident.
Other terms you might hear
Some villages use different terms for the DMF, including “amenities fee”, “membership fee”, or “facilities contribution”.
Questions to ask village managers
Always ask how the DMF is calculated, what it covers, and how it would apply if you moved to another home within the village, into the on-site care home if the village has one, or if you were to leave the village altogether.
Comparing DMFs across different villages
You can compare Deferred Management Fees across different villages using Village Guide’s comparison tool. It shows the percentage charged and how many years it takes to reach the maximum fee, making it easier to understand how different villages structure their costs.
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Deferred Management Fee FAQs
Does every village charge a DMF?
Almost all do, but the percentage and structure vary. Some operators have lower DMFs or alternative fee models.
Can the DMF increase after I move in?
No. The percentage and maximum amount are fixed in your Occupation Right Agreement (ORA).
Does the DMF cover refurbishment?
In many villages, yes — but not always. Some charge refurbishment separately, so it’s important to confirm this.
What if I move to another home within the village or into the on-site care home?
If you move from one independent home to another within the same village, it’s common for your Deferred Management Fee to roll over, so the time you’ve already spent in the village continues to count. If you move into a serviced apartment or care suite, this is often treated differently. In many cases, your current Occupation Right Agreement will come to an end and you’ll enter into a new agreement for that home or level of care, with a new Deferred Management Fee and a new accrual period starting from that point. Policies do differ between operators, so it’s important to speak with the village sales manager about how this would apply in your situation.
