Collecting and managing residents' fees in retirement villages
As an operator of a retirement village, you can charge residents for services and facilities. These charges must be explained in the residence contract, village comparison document and prospective costs document.
For residents who moved in before 1 February 2019, the public information document (PID) (PDF, 244KB) sets the amount you can charge a resident for general services and how charges are calculated. You cannot charge more than indicated in the PID.
Village comparison document
As a registered retirement village scheme operator, you must provide a village comparison document (VCD) (Form 3) (DOC, 262KB) to a prospective resident who is interested in purchasing a unit in a retirement village. This document will help prospective residents to compare other villages before they make a purchase.
The VCD will include information on:
- the ingoing contribution
- other entry costs
- exit fees
- general service charges
- maintenance reserve fund contribution
- body corporate fees (if applicable)
- ongoing or occasional costs for repair, maintenance and replacement of items.
Prospective costs document
The retirement village operator must provide a prospective costs document (PCD) (Form 4) (DOC, 245KB) to prospective residents within 7 days of the request. This document relates to costs of a specific unit in the village. You may have several PCDs depending on the type of accommodation provided.
The PCD will include:
- costs of the ingoing contribution and other entry costs
- current ongoing costs of living in the village
- personal service charges
- the estimated exit fees
- the percentage of capital gain that the resident is entitled to when a unit is sold
- the percentage of capital loss that the resident will be responsible for when a unit is sold.
The ingoing contribution is a one-off payment that secures a resident's right to live in the retirement village.
Personal services charge
The personal services charge covers optional personal services that residents may use such as meals, cleaning and laundry services. You negotiate personal services as part of the contract with each resident.
Residents may have to pay this charge for up to 1 month after they give you notice that they are vacating or for up to 2 months if you have given the resident notice to leave.
Fees and charges when residents leave
Residents may have to pay the general services charge and maintenance reserve fund contribution in full for up to 90 days after they vacate the unit unless the unit sells earlier.
After the 90 days, you and the resident share the cost of the general services charge and maintenance reserve fund contribution in the same proportion as you will share the gross ingoing contribution from the unit resale.
The resident is required to pay their share for 9 months or until the unit is sold, whichever comes first.
If the resident's unit has not been sold within the 90-day period, you may accrue the resident's proportion of the general services charge and maintenance reserve fund contribution as a book debt and reduce the amount you pay in exit entitlements. You are not allowed to charge interest on the accrued amount.
If a unit is vacant or has no contract on it, you must pay the proportion of the whole general services charge and maintenance reserve fund contribution that relates to the unit.
Exit fees are usually set as a percentage of the ingoing contribution. A resident may have to pay this amount to you when they leave the village or when you sell their right to reside.
In addition to the exit fee, a resident may have additional charges including:
- general service charges
- maintenance reserve fund contributions
- personal services charges
- selling costs.
These are deductions that determine exit entitlement.
You must give the resident a statement that outlines their total fees and charges within 14 days of their request.
The exit fee is calculated on the day the resident leaves the unit.
For residence contracts entered into on or after 1 March 2012, the exit fee is calculated on a daily basis if based upon the length of time the resident has resided in the village.