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Retirement Village Contracts

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Lewleq View Drop Down

Joined: 30/April/2017
Location: Australia
Posts: 1
  Quote Lewleq Quote  Post ReplyReply Direct Link To This Post Topic: Retirement Village Contracts
    Posted: 30/April/2017 at 22:36
What is the purpose, point, power of a contract between a resident and operator of a retirement village when the Act states that certain agreed conditions such as maintenance charges and utility fees can be altered/increased by a majority vote of the residents?

citizen-joe View Drop Down
Senior Member
Senior Member

Joined: 09/October/2005
Location: Australia
Posts: 612
  Quote citizen-joe Quote  Post ReplyReply Direct Link To This Post Posted: 01/May/2017 at 20:19
Yes it does not seem right that a variation to the act, that was brought about by lobbying of the government by the retirement villages operators, can cause contracts to be varied. The act does provide for annual increase to the monthly fees in accordance with CPI and for additional increases if certain expenses increase above CPI, but to allow further increases by a simple majority vote by the voting residents, many of whom are very old and do not understand the implications of the increase to themselves or the other residents, is an abomination.

These operators lobby residents about how the services will be improved if they have extra money from them, while the act in no ways compels them to actually improve those services.

The only way I can see that a switched on resident can counter this is to lobby all residents with perhaps a letter box drop in their village about the facts.

I'm in this situation at the moment and with a little research I have discovered that the 11 senior management personnel of the operating company received $3,090,00 remuneration in the last 12 months, ie an average of over $280,000 each. I intend advising all the residents of my retirement village of this fact when I write to them before the vote is taken.

I'm in Queensland and the significant clauses in the ACT, which form part of the contract, states:-

106 Increasing charges for general services
(1) A scheme operator must not increase the total of general services charges for a retirement village for a financial year by more than the CPI percentage increase for the financial year.
Maximum penalty—200 penalty units.
(2) In this section—
CPI means the all groups consumer price index for Brisbane published by the Australian statistician.
CPI percentage increase, for a financial year, means the percentage increase between—
(a) the CPI published for the quarter ending immediately before the start of the financial year; and
(b) the CPI published for the quarter ending immediately before the end of the financial year.
total of general services charges, for a financial year, means the sum of all charges for general services for the financial year, other than the following charges—
(a) a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that the retirement village residents, by special resolution at a residents meeting, have approved;
(b) a charge for a general service that has been increased by more than the CPI percentage increase for the financial year and that is allowed under section 107.
107 Resident's responsibility for paying increased general services charge
A resident is not required to pay a charge for a general service under a residence contract to the extent that the charge is more than that payable under the contract and increased under section 106, unless the excess is attributable to an increase in—
(a) rates, taxes or charges levied under an Act in relation to the retirement village land or its use; or
(b) the salary or wages of a person engaged in the retirement village's operation and payable under an award, certified agreement, enterprise flexibility agreement, industrial agreement, Queensland workplace agreement or other industrial agreement made, approved, certified, or continued in force under—
(i) the Industrial Relations Act 1999; or
(ii) a Commonwealth Act; or
(c) insurance premiums, or insurance excesses paid, in relation to the retirement village or its use; or
(d) maintenance reserve fund contributions.
107A Considering more cost-effective alternative services
Before increasing the charge for a particular general service, the scheme operator must consider whether there is a more cost-effective alternative to the general service.

Not sure what is says in your state?

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