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/Factsheet_print/Tenants_and_home_owners/Retirement_villages/Living_in_a_village/_Recurrent_charges.pdf
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Standard fact sheet.
/Factsheet_largeprint/Tenants_and_home_owners/Retirement_villages/Living_in_a_village/_Recurrent_charges.pdf
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Large print fact sheet.

Recurrent charges 

The main ongoing costs residents pay while living in a retirement village are the recurrent charges. These charges meet the general expenses of operating the village and providing services to residents.

Recurrent charges are:

  • payable to the operator on a regular basis, for example, weekly or monthly
  • based on the annual budget for the village, divided among the residents.

In some villages, residents pay different amounts depending on the size or type of unit they are in or the number of residents living in the unit.

The operator must prepare a receipt for all recurrent charges paid and give it to a resident in person or make it available for them to collect.

In a strata or community scheme retirement village, you will have to pay levies to the owners corporation or community association for the management of the common property, in addition to any recurrent charges you pay to the village operator for their services.

There may be two types of recurrent charges for:

  • general services, and
  • optional services.

 

Recurrent charges for general services 

General services are those services that the operator makes generally available to the residents. All residents pay recurrent charges for these services. Examples include management and administration services and gardening and maintenance services.

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Recurrent charges for optional services 

In some villages, additional services such as meals, cleaning and laundry may be available for residents. This is generally the case in assisted living units and serviced apartments. Only residents who receive these services pay recurrent charges for them.

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Temporary absences and recurrent charges 

If you are absent from the village for 28 days or more (for example, while on holiday or receiving medical treatment) you are not required to pay recurrent charges for optional services for the remainder of the period of absence. You will still need to pay recurrent charges for general services while you are away.

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Changing the recurrent charges 

In most villages, the recurrent charges are increased from time to time to meet rising operating costs.

Depending on what it says in your contract, the operator may vary the recurrent charges by:

  • a fixed formula, or
  • other than by a fixed formula.

A contract must not contain more than one method of varying the recurrent charges. If it does, the method that results in the lowest increase will apply.

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Variation by fixed formula 

Some village contracts provide for recurrent charges to be increased at specified intervals or on specified dates according to a set formula (for example, in line with the Consumer Price Index or pension changes). The operator must give you at least 14 days written notice before the amounts change.

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Variation other than by fixed formula 

If your contract does not have a fixed formula, recurrent charges can be changed only once in any 12 month period. The operator must give you:

  • at least 14 days written notice of a change, if it does not exceed the variation (change) in the Consumer Price Index (All Groups) for Sydney since the previous year
  • at least 60 days written notice if the change exceeds the change in the Consumer Price Index. The operator must also seek the consent of the affected residents, by a majority vote. If the residents do not consent to the change, the operator may apply to the NSW Civil and Administrative Tribunal for an order to change the fees. For more information about giving consent, see Residents’ meetings and input on the Fair Trading website.

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What is the Consumer Price Index variation? 

The Consumer Price Index (CPI) is a figure published four times each year by the Australian Bureau of Statistics. It measures the overall change in price of a range of goods and services that are frequently purchased by households and gives an indication of the rate of inflation.

Under the Retirement Villages Act 1999, the Consumer Price Index (CPI) variation means the difference between:

  • the CPI figure published most recently before notice of a change in recurrent charges was given, and
  • the CPI figure published most recently before the last time the recurrent charges were set or changed for the village

rounded to the nearest dollar.

For example:

  • if you are paying recurrent charges of $100 per week, and
  • the CPI over the 12 months since those charges were set was 4%, and
  • the operator notifies you that your charges will increase to $104,

then the increase is within the CPI variation and the operator does not need to ask for the residents’ consent.

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