RETIREMENT VILLAGES ACT 1999 - SECT 91 Capital replacement fund

RETIREMENT VILLAGES ACT 1999 - SECT 91

91 Capital replacement fund

(1) A scheme operator must—

(a) establish and keep a fund (the
"capital replacement fund" ) for replacing the retirement village’s capital items; and

(b) hold amounts standing to the credit of the fund in a separate account—

(i) that is established and kept for the purpose; and

(ii) the name or style of which includes—

(A) the operator’s name; and

(B) the retirement village scheme the account is for followed by the words ‘secured capital replacement fund account’; and

(iii) that requires withdrawals from it, whether by cheque or otherwise, to be signed by the scheme operator.

Penalty—

Maximum penalty—540 penalty units.

(2) The scheme operator is solely responsible for contributing to the fund.

(3) No amount standing to the credit of the fund may be applied or used for a purpose other than—

(a) replacing the village’s capital items; or

(b) paying the quantity surveyor’s reasonable fees for giving a report for section 92 ; or

(c) paying tax on amounts paid into the fund under section 94 (1) (b) .

(4) A person who applies or uses an amount in contravention of subsection (3) commits an offence.

Penalty—

Maximum penalty—540 penalty units.

(5) Without limiting subsection (3) , the scheme operator must not use the amount standing to the credit of the fund for—

(a) the village’s capital improvement, maintenance or repairs; or

(b) capital replacement, maintenance or repairs of body corporate property to which the Body Corporate and Community Management Act 1997 applies.

Penalty—

Maximum penalty—540 penalty units.

(6) Immediately the fund is established, a statutory charge is created over it for the benefit of the residents of the village to ensure the availability of the balance of the fund for the purposes mentioned in subsection (3) .

(7) The charge has priority over any other charge over the fund given by the scheme operator, including a charge given before the commencement of this section, other than a charge created and given priority over other charges under a Commonwealth law or another law of the State.

(8) Regardless of any change in who controls the scheme’s operation, the charge is irrevocable and continues until—

(a) the village ceases to operate as a retirement village scheme; and

(b) all former residents have been paid their exit entitlement.