Some of the most commonly disputed issues in retirement villages are budgets, expenditure and capital replacement v capital maintenance.
Recently the NSW Civil & Administrative Tribunal provided some observations in its findings in the matter of Alloura Waters Retirement Village Residents Committee v Living Choice Australia Pty Ltd  NSWCAT which operators can use as a guide for approaching some of these commonly disputed expenditure
What issues were commented on?
The key issues which were raised and decided on or commented on by the Tribunal were:
Click here to view table
Tips for operators
With the distinction between capital expenditure and capital maintenance in the spotlight, operators should carefully consider whether:
- the expenditure incurred in relation to an item of capital changes the character or function of the item so that there is a substantial improvement to the capital item beyond its original condition – capital replacement; or
- the expenditure is necessary to ensure that the item of capital works and allows the item to continue to function or preserve its ability to work AND it cannot be said that it would be more cost effective to replace the item – capital maintenance.
Also, when determining whether or not to adjust the approved budgets, an operator should exercise good management practices and should be careful to ensure that there is no reduction in services to the residents of the village as a consequence of the adjustment.