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Maintenance charges
Most residents pay a maintenance charge every week, fortnight or month. The maintenance charge helps cover the cost of:
- managing the retirement village, including staff salaries
- maintaining shared facilities and common areas, such as gardens and recreational facilities
- providing shared services, such as emergency call system monitoring.
Optional services that residents choose to use on a user-pays basis are not included in the maintenance charge.
Some villages include a capital maintenance component in their maintenance charge. Others charge a separate amount for this purpose.
Owner residents may also have to pay owners corporation fees in addition to retirement village maintenance charges. Some villages combine these two amounts into one payment.
Find more information about owners corporation fees.
Some retirement villages offer both independent and assisted living arrangements. Recurrent charges may be higher under an assisted living contract if it includes regular additional services, such as meal services.
Increasing maintenance charges
An operator can increase the maintenance charge up to the adjusted maintenance charge. This is the maximum that can be charged unless a higher charge is:
- approved by a special resolution passed at a meeting of residents
- to cover increases in salaries or wages paid in accordance with an award, or
- to cover increases in rates, taxes or charges relating to retirement village land or its use imposed by law.
The adjusted maintenance charge is calculated using a formula set out in the legislation. This takes the previous year’s adjusted maintenance charge and increases it in line with the consumer price index (CPI). It is not necessarily based on the actual amount that was actually charged in the previous year.
You can find more information in the guide to calculating a village’s adjusted maintenance charge.
If an operator is proposing a vote of residents to increase maintenance charges above the adjusted maintenance charge, a special resolution is required. They must also use the correct form to give all residents at least 21 days written notice of the vote.
Download the Retirement Village Notice of Meeting Special Resolution about Maintenance Charge.
Find more information on requirements for meetings and voting at Annual meetings and village governance.
Notice of increased maintenance charge
When an operator sets the maintenance charge for a year, they must give a maintenance charge notice to each resident who is required to pay it.
The notice must include:
- the amount of the maintenance charge
- the goods and services the charge will fund
- how much of the charge goes towards the operator’s cost of managing the village, including the cost of employing or engaging people and maintaining facilities, common areas and capital items
- a statement that the charge does not include optional services.
Changing services and facilities
The operator cannot vary the services and facilities provided at the village without the approval of residents.
Any variation, including reducing, withdrawing, adding or changing a service or facility, must be approved by special resolution at a meeting of residents. If the variation requires a maintenance charge increase or special levy, these must also be approved by special resolution.
The operator must raise a proposal for the variation of services or facilities at a meeting of residents if they receive:
- A petition from 5 residents or 10% of residents in a village that has 10 or more occupied premises, or
- A petition from residents in the majority of occupied premises in smaller villages, or
- A request by the residents committee.
A proposal can also be made at the operator’s own initiative.
Special levy
A retirement village may need more money than is collected in ongoing maintenance fees, to meet unexpected expenses such as major repairs, or to fund a new service or facility.
If this is the case, the operator can only charge a special levy if residents have not been charged one in the past 12 months and either:
- residents agree to the change through a special resolution, which requires the support of at least 75% of the residents voting at the meeting
- the levy seeks to cover costs due to Victorian or Commonwealth law or the order of a court
- the retirement village contract or its by-laws make residents responsible for the type of expenditure the special levy is intended to cover; for example, your contract states that residents will have to pay for any new facility, like a bowling green or pool.
Optional services
Optional services (sometimes called personal services) may be available to residents on an as-needs basis. They can include meals, cleaning, laundry and personal care such as assistance with bathing and dressing. They are provided on a user-pays basis. Your maintenance charge notice must state clearly that optional services are not included in the maintenance charge.
A list of optional services will also be attached to the village information statement.
Metered services and insurance costs
Residents will usually bear the cost of services that are separately metered and charged to individual premises.
These services include:
- telephone
- gas and electricity
- household contents insurance.