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 and your village's public information document (PID).

Ingoing contribution

The ingoing contribution is a one-off payment that secures a resident's right to live in the retirement village.

General services charges

These charges pay for services you supply to all village residents, for example:

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

The current public information document (PID) contains the amount you can charge a resident for general services and how to calculate that charge. You cannot charge more than indicated in the PID.

You must prepare a budget each financial year to plan for these costs and monitor actual spending against the budget.

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.

If the residents' committee requires a copy of the budget:

  • they have to request it in writing at least 28 days before the financial year begins
  • yu have to supply the budget to them at least 14 days before the financial year begins.

Increasing general services charges

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 increase unless the residents' committee approves the extra increase
  • provide a document that explains any budget increases to the residents' committee if they request it.

However, residents are 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
  • maintenance fund contributions.

New general services

If you intend to offer a new service it must first be approved by special resolution at a residents meeting. If you need capital improvements in order to provide the services, the residents must also pass a special resolution asking you in writing for the capital improvement.

The law states that operators should:

  • get at least 2 quotes for supplying the service from qualified trades people unless there are exceptional reasons that make this impractical
  • give the residents' committee copies of the quotes and pay the costs of getting the quotes
  • not charge residents for the new service before it is supplied.

Personal services charge

The personal services charge pays for 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 are not responsible for these charges beyond 28 days after they leave the village.

Fees and charges when residents leave

Residents may have to pay the general services charge 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 charge in the same proportion as you will share the income 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 a unit is vacant or has no contract on it, you must pay the proportion of the whole general services charge that relates to the unit.

You may accrue the resident's proportion of the charge as a debt and reduce the amount you pay in exit entitlements. You are not allowed to charge interest on the accrued amount.

Exit fees

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, personal services charges, outstanding fund contributions, expenses from the unit resale and other costs covered in the contract. These are deductions that determine exit entitlement.

You must give the resident a statement that outlines their total fees.

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.

Contact

General enquiries 13 QGOV (13 74 68)