Fees and maintenance |
Retirement village operators charge residents´ fees for services and facilities.
Both the public information document and the residence contract must clearly outline all fees and charges, and how they are calculated.
Residents can ask for a quarterly financial statement, which the operator must provide within 28 days.
The residents´ committee can also ask for a document that explains each general service expenditure and the reason for any increases.
Fees
Generally, residents pay maintenance fees and operators pay for capital replacement.
Residents´ fees may include the following:
Ingoing contribution
This one-off payment secures your, or someone else´s, right to live in the village.
General services charges
These ´pay for services´ that operators supply or make available to you can include:
- management and administration
- gardening and minor maintenance
- recreation or entertainment facilities
- other services specified in the contract.
Residents may have to pay the general services charge for up to nine months after they vacate the unit, or until the unit sells.
The operator must consider more cost-effective alternatives before increasing any general services charge. They must also produce a general services charge annual budget to plan for these costs.
Personal services charge
This charge pays for optional personal services that you may use, such as meals, cleaning and laundry services.
Residents may have to pay this charge for up to two months after they give notice that they are vacating, depending on why they are leaving.
Exit fee
Residents pay an exit fee when they leave the village, as well as any outstanding general service charges, personal services charges, expenses from the unit resale and any other costs covered in the contract.
The operator will provide a statement that outlines the total charges when the resident receives the share from the sale of the unit.
Maintenance costs
Capital replacement fund
This fund is used to replace capital items, such as communal amenities, roadways and drainage. It also pays for quantity surveyor fees and taxes on fund interest.
The operator is responsible for the cost of replacing village capital items.
However, if a resident requests (or residents agree to) a capital improvement to the village not included in the PID, they are responsible for paying it.
Residents must also pay for capital replacement if they deliberately damage a capital item or cause accelerated wear and tear.
The operator must get at least two quotes for all capital improvement work. They then give copies of the quote to the resident or residents´ committee requesting the work.
The resident requesting the improvement must pay any reasonable costs of getting the quotes.
The village operator must:
- keep capital improvement money from residents in a trust account
- obtain quotes for all capital replacement
- refund to residents all capital improvement money that exceeds the actual improvement cost
- not use capital improvement money for any other purpose.
The fund is not used to maintain the village. It is protected by law to benefit residents.
Maintenance reserve fund
This fund is used to maintain and repair capital items, pay quantity surveyor fees and pay taxes on the fund interest. It maintains the standards in the village.
Residents contribute to the maintenance reserve fund on an ongoing basis as part of the general services charge.
The fund is not used for day-to-day maintenance or new capital, or to replace capital items.
Insurance costs
Residents who own their own unit should take out their own building and home insurance. All residents are responsible for insuring their personal property and personal liability.
The operator must insure the village to full replacement value. They may pass on this insurance cost to residents as part of the general services charge.
To keep this cost low, the operator can take out insurance that is subject to an excess, which the residents may be required to pay if a claim was made.
Access to financial information
By law, residents can access certain financial information about the village.
Operators must prepare a draft budget before the financial year starts. The residents committee may obtain a copy of the budget before the financial year starts and discuss it with the scheme operator.
The draft budget outlines the cost of maintaining and replacing village facilities, and ongoing fees and charges.
As noted above, residents can also ask for quarterly financial statements. The residents committee can obtain a document that explains any expenditure increases.
Last reviewed 07/12/2011 |
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