Retirement villages case study

The Retirement Villages Act 1999 requires each operator to prepare a proposed annual budget for each village prior to each financial year, itemising the ways in which the operator proposes to spend residents’ recurrent charges during the coming year.  The residents must vote on the proposed annual budget within 30 days of receiving it, and 50% must agree with the budget for it to be approved.

Residents of a retirement village had concerns regarding the proposed annual budget for the following year detailing a 10% increase over the previous year.  The operating costs were to be funded by way of recurrent charges paid monthly.  As a group the residents wrote to the village operators about their concerns.

When negotiations broke down between the manager and the residents, the resident lodged an application to the CTTT.  The matter was listed for a directions hearing at the local community hall to allow for the village residents to attend.  A number of residents attended the hearing and were represented by the chairperson of the Residents Committee.  The manager of the village attended on behalf of the operator.

Both parties produced evidence to support their claim regarding the proposed budget for the village.  The Tribunal Member discovered that the evidence had not been examined by the other party before the hearing, and therefore directed a timetable for the exchange of documents to occur.  The matter was then adjourned for a full-day hearing.

At the next hearing, the village manager and a number of residents appeared.  Extensive cross-questioning by both parties on the evidence was allowed.  The Tribunal Member then reserved the decision in order to review the evidence and relevant case law.

The reserved decision was handed down five weeks later and determined that the proposed annual budget should not exceed the standard CPI increase of 3%.