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RETIREMENT VILLAGES ACT 1999 - SECT 99 Maintenance reserve fund budget

RETIREMENT VILLAGES ACT 1999 - SECT 99

Maintenance reserve fund budget

99 Maintenance reserve fund budget

(1) The scheme operator must adopt a budget for the maintenance reserve fund (a
"maintenance reserve fund budget" ) for each financial year that—
(a) complies with subsection (3) and section 113AA ; and
(b) subject to subsection (2) , is consistent with, and implements any recommendations in, the quantity surveyor’s report obtained or updated under section 98 (1) .
Penalty—
Maximum penalty—200 penalty units.
(2) Subsection (1) (b) does not apply to the scheme operator to the extent of any part of the maintenance reserve fund budget that has been agreed to by the residents by special resolution at a residents meeting.
(3) For subsection (1) , the maintenance reserve fund budget must—
(a) allow for raising a reasonable amount for maintenance and repairs to—
(i) provide for necessary and reasonable spending from the maintenance reserve 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 to be raised by way of contribution to cover the estimated recurrent expenditure mentioned in paragraph (a) .
Example—
Painting of village property is anticipated to be necessary in 3 years time at a cost currently estimated at $3,000. The contribution amount for the maintenance reserve fund in the budget for the financial year must therefore include the annual proportional share for painting of $1,000. Next year, the estimated cost has increased to $3,400 and so the second year levy will be $1,200. The estimated cost in the third year is $3,500, so with the $2,200 accumulated, a levy of $1,300 is necessary to meet the cost.
(4) If, at the end of a financial year for which a budget for the maintenance reserve fund is adopted, there is a surplus or deficit, the surplus or deficit in the maintenance reserve fund must be carried forward and taken into account in adopting the budget for the next financial year.