Fees

General services charges fund

An operator must establish and keep a fund for general services.

The general services charges pay for the services that operators supply or make available to all residents and can include:

• management and administration
• gardening and general maintenance
• recreation or entertainment facilities
• other services identified in the contract.

The operator must prepare a budget each financial year to plan for these costs and monitor actual spending against the budget. The budget must be in the approved form if one is prescribed.

They must carry forward any surplus or deficit at the end of the financial year, and account for the amount when preparing the following year's budget and before setting the amount of the general service charges for the following year.

A residents' committee, or a resident can request a copy of the draft general services charge budget for the financial year

• They have to request it in writing at least 28 days before the financial year begins; and
• the operator has to supply the budget to them at least 14 days before the financial year begins.

Increasing the total general services charge

The Retirement Villages Act 1999 limits how the total general services charge can be increased by the scheme operator.

An operator must:

• look for cost-effective alternatives before increasing any charge
• not increase the general services charge by more than the Customer Price Index (CPI) percentage increase unless village residents approve the increase by special resolution vote
• provide a document that explains the expenditure involved in providing each general service and any variation from the amount originally budgeted to the residents' committee if they request it.

However, you will be required to pay an increase if it is due to an increase in:

• rates, taxes or charges on the village
• a village employee's salary (if the law demands an increase)
• insurance premiums or excesses.

If you leave the village

You may have to pay the general services charge in full for up to 90 days after you leave the unit, unless the unit sells earlier.

After 90 days, you and the operator share the cost of the general services charge in the same proportion as you will share the proceeds of the unit resale. You pay your share of this amount for a further 6 months or until the unit is sold, whichever comes first. For more information about how your share of these costs is calculated, please refer to the department's guideline How to calculate proportionate costs (PDF).

If your unit has not been sold within 90 days, the operator may accrue your proportion of the general services charge as a book debt and deduct it from your exit entitlement amount when it becomes payable. The operator is not allowed to charge interest on the accrued amount.

Maintenance reserve fund

An operator must establish and keep a fund for maintaining and repairing the village’s capital items.

The maintenance reserve fund is used to:

• maintain and repair the village's capital items
• pay quantity surveyor fees (for reports prepared for this account)
• pay the tax liability on this fund.

Residents are solely responsible for contributing to the maintenance reserve fund.

An operator cannot use the fund for day-to-day maintenance of the village, capital improvement or replacement, or capital replacement, maintenance or repairs of body corporate property.

Managing the maintenance reserve fund

A budget for the maintenance reserve fund must be prepared each financial year. The budget must include enough funds for necessary and reasonable spending for the financial year and for future expenses, and must be in the approved form, if one is prescribed. The budget must be consistent with, and implement any recommendations in the quantity surveyor’s written report, about the expected maintenance and repair costs for the village for the next 10 years.

The operator will need to carry forward the surplus or deficit at the end of the year and account for the amount when preparing the following year's budget.

A resident or residents' committee can request a copy of the draft maintenance reserve fund budget or independent quantity surveyor’s report for the financial year.

• They have to request it in writing at least 28 days before the financial year begins.
• The operator has to supply the budget to them at least 14 days before the financial year begins.

If you leave the village

You may have to pay the maintenance reserve fund contribution in full for up to 90 days after you leave the unit, unless the unit sells earlier.

After 90 days, you and the operator share the cost of the maintenance reserve fund contribution in the same proportion as you will share the proceeds of the unit resale. You pay your share of this amount for a further 6  months or until the unit is sold, whichever comes first. For more information about how your share of these costs is calculated, please refer to the department's guideline How to calculate proportionate costs.

If your unit has not been sold within the 90-day period, the operator may accrue your proportion of the maintenance reserve fund contributions as a book debt and deduct it from your exit entitlement amount when it becomes payable. The operator is not allowed to charge interest on the accrued amount.

Personal services charge

The personal services charge pays for optional personal services that you may use, such as meals, cleaning and laundry services. You can negotiate personal services as part of your residence contract.

If you leave the village, you may have to pay this charge for up to 1 month after you give notice that you are vacating your unit or for up to 2 months if the operator has given you notice to leave.

Exit fee

After you leave the village, and your unit has been sold, you are usually required to pay an exit fee as well as:

• any outstanding general service charges or maintenance reserve fund contributions
• any outstanding personal services charges
• a share of expenses from reselling the unit
• your costs associated with reinstating and/or renovating the accommodation unit
• any other costs covered in your residence contract.

The operator must give you an estimated exit entitlement statement that outlines your total fees and charges within 14 days of your initial request. For more information about what should be included in your exit entitlement statement, please see the department’s exit entitlements guideline.

Your exit fee is calculated on the day you vacate the unit.

The basis for the calculation of your exit fee will be outlined in your residence contract. Usually the fee is based on a proportion of either the ingoing contribution you paid for the unit when you moved in or the price you sold it for. Generally, the proportion you pay will depend on how long you lived in the village.