As quantity surveyors, Whittaker & Associates provide several reports designed to assist retirement village scheme operators with their legislative obligations.
These reports include:
Capital Replacement Fund – Ten Year Forecast
Maintenance Reserve Fund – Ten Year Forecast
Opinion of Replacement Cost for insurance purposes
Some background context for the Maintenance Reserve Fund Levy
Retirement villages in Queensland are governed by the Retirement Villages Act 1999 (Qld) (Retirement Villages Act). The Retirement Villages Act was introduced to require greater transparency and accountability of each retirement village scheme in respect to residents. It creates extensive obligations for disclosure of information by scheme operators through a public information document (PID).
The Act also sets up comprehensive requirements for scheme operators, which of interest to quantity surveyors, include the establishment of funds for maintenance and capital replacement of the village, and the control of setting ongoing fees.
Understanding Charges to Residents
Once a resident takes up occupation of a unit, they will be liable to pay a general services charge and a personal services charge (if applicable). The general services charge has two main components:
- the resident’s contribution to the costs of operating the village
- the maintenance reserve fund levy
General services are services supplied, or made available, to all residents of a retirement village.
Examples of general services—
- management and administration
- gardening and general maintenance
- a shop or other facility for supplying goods to residents
- a service or facility for the recreation or entertainment of residents
The Retirement Villages Act does restrict the increase in general services charges. Specifically, (s 106 Retirement Villages Act) the total general services charges cannot increase in any year by more than the Consumer Price Index – unless the increase relates to:
- rates, taxes or charges levied on the village itself
- salary or wages of persons employed in the village
- insurance premiums or insurance excesses paid in relation to the village
- maintenance reserve fund contributions.
What is a Maintenance Reserve Fund? [s 97]
The scheme operator is required to establish and keep a fund (the maintenance reserve fund) in a separate trust account which is to be used for maintaining and repairing (but not replacing) the retirement village’s capital items (s 97 Retirement Villages Act).
Residents are solely responsible for contributing to this fund, which is done by way of a maintenance reserve fund levy that forms part of the general services charge referred to above.