While protocols are not legally binding, there is an expectation that they will be applied.
On this page:
Protocol on increases in maintenance charges
1. It is good practice to consult with residents (in writing with a follow-up meeting) on proposed increases in maintenance charges, particularly where it is above the consumer price index (CPI). So that residents can see how the components of the charge relate to the increase, break down the charge to show:
- what part relates to the provision of services, which requires their approval if above CPI
- what parts are composed of:
- rates/taxes/charges applicable to the village
- salaries/wages paid to village employees, which can be above CPI and does not require their approval.
It is also good practice to include any options for cheaper alternatives or for avoiding the increase.
2. As soon as you become aware that residents’ share of maintenance charges for vacant/unbuilt units is likely to become an issue, it is good practice to advise them (in writing with a follow-up meeting) on:
- how the charges are shared between you and them
- how it is likely to affect them in the current financial year
- what is being done to address the vacancy problem
- (where applicable) the reason why residents’ shares are calculated differently from their share of the general charge (or from their owners corporation fee).
If the problem is ongoing, it is good practice to continue this process at subsequent annual meetings.
Protocol on the maintenance process
It is good practice to:
1. produce a simple document for each resident explaining what items of maintenance you are responsible for carrying out and what items they are responsible for carrying out, and how it is paid for. This document should include the contact person and procedure for making a maintenance request.
2. where possible, respond to a maintenance request (for which you are responsible for carrying out) immediately. If that is not possible, consider a recording process (which should be monitored daily) that includes the following:
- the resident’s name
- the nature of the request
- the date the request was made
- whether urgent or non-urgent
- the employee/contractor responsible for attending to the request
- the estimated time for resolution (consider within 24 hours for urgent matters and within 14 days for non-urgent matters)
- written acknowledgment of the request with the estimated resolution date and the name of the person attending to the problem
- advice to the resident if the estimated resolution date is missed, and a proposed new estimated resolution date
- when and how the matter was resolved
- confirmation of resolution by the resident.
It is good practice to check the log daily for missed timelines and update it where necessary.
Protocol on insurance claims
If a resident’s property has been damaged because of something that is covered by the village’s insurance policy, it is good practice to consider the feasibility of fixing the damage before acceptance of the claim or, if that is not feasible, before receipt of the payout.
If it is not feasible to fix the damage before acceptance of the claim but you can do so before receipt of the payout, or if neither option is feasible, you should explain this to the resident.
- How the maintenance charges for vacant/unbuilt units are shared
- Increases in the charges
- Responsibility for carrying out maintenance work
- Process for dealing with maintenance requests
- Delays in processing insurance claims for damage to units.
Note: the separate issue of what matters are covered by the service charge and what matters are covered by the capital replacement fund is covered in Protocol 3: What is covered by service and capital charges.
Residents may be unfamiliar with what their contracts say about their maintenance charges and with the provisions of the Retirement Villages Act 1986 (the Act) governing increases in the charges.
Residents may believe that the Act restricts all increases in the charges to CPI and that they must approve any increases above CPI. They may not understand that you, as the manager, can increase the charges above CPI, without their approval, when rates, taxes or charges applicable to the village, or wages or salaries of village employees, have increased.
Even when residents accept your right to increase the charges above CPI, they may expect you to consult with them about alternatives.
Vacant units awaiting re-leasing or re-selling can present problems regarding how the charges for them are shared between you and the remaining residents. This may raise the sensitive issue of increased costs for residents, particularly for those on fixed incomes.
This dilemma can also arise for new villages where only some of the units have been built or sold, resulting in residents bearing a larger share of the charges than they might have expected in a fully built and occupied village.
Further, there may be a difference between residents’ contractual liability for the charges for vacant units and their expectations. In loan-licence villages, some residents may expect that they will contribute according to their share of the general charge, and in strata-title villages, some residents may expect that they will contribute according to their lot liability. These expectations may not accord with the position under their residence contract.
Residents may be unclear about the process for carrying out maintenance work. It benefits you as manager, and the residents, if there is a transparent process for the carrying out of maintenance work; a process that addresses timeliness, cost, and who carries out the work.
Where a unit has been damaged and the damage is covered by the village’s insurance policy, the time taken for the claim to be processed and for a payout to be made can sometimes be lengthy.
For emergencies, most villages have provision for the repairs to be made immediately and without waiting for the claim to be processed.
However, where, for non-emergency repairs, the insurance process is likely to be lengthy and the affected resident is likely to be substantially inconvenienced in the meantime, the resident may ask for the repairs to be done as soon as possible and before a payout is received.
In addressing such a request, the problem for you, as manager, may be that fixing the damage before the insurer has assessed it may jeopardise the acceptance of the claim, or that fixing it before receiving a payout may cause cash-flow problems.
This protocol supports better communication with residents about these matters to help reduce disputes.
The residence contract is the document that governs:
- what services are covered by the maintenance charges
- how the charges for vacant/unbuilt units are to be shared between the manager and residents
- what maintenance is provided by whom, when and how.
Section 38 of the Act states that maintenance charges cannot be increased by more than CPI unless approved by the residents or residents’ committee, or unless the increase arises from increases in rates, taxes, charges, wages or salaries.