RETIREMENT VILLAGES ACT 1999 - SECT 93 Capital replacement fund budget

RETIREMENT VILLAGES ACT 1999 - SECT 93

93 Capital replacement fund budget

(1) The scheme operator must, having regard to the quantity surveyor’s report obtained or updated under section 92 (1) , adopt a budget (a
"capital replacement fund budget" ) for each financial year for the capital replacement fund that complies with subsection (2) and section 113AA .

Penalty—

Maximum penalty—200 penalty units.

(2) For subsection (1) , the capital replacement fund budget must—

(a) allow for raising a reasonable capital amount to—

(i) provide for necessary and reasonable spending from the capital replacement fund for the financial year; and

(ii) reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year; and

(b) fix the amount (the
"capital replacement fund contribution" ) to be paid by the scheme operator, from money of the scheme operator, to cover the capital amount mentioned in paragraph (a) .

Example—

Replacing a village stand-by electricity generator is anticipated to be necessary in 3 years time at a cost currently estimated at $60,000. The contribution amount for the capital replacement fund in the budget for the financial year must therefore include the annual proportional share for its replacement of $20,000. Next year, the estimated cost has increased to $68,000 and so the second year amount will be $24,000. The estimated cost in the third year is $70,000, so with the $44,000 accumulated, a further $26,000 is necessary to meet the cost.

(3) The scheme operator—

(a) may use all or part of an ingoing contribution to pay the capital replacement fund contribution; but

(b) must not otherwise raise, or attempt to raise, all or part of the capital replacement fund contribution from residents.