Weekly/monthly service fees: what they cover

Weekly/monthly service fees: what they cover

The recurring service fee — usually called a "general service charge," "recurrent charge," "site fee," or "maintenance fee" depending on the village type — is the second biggest financial commitment in a retirement village contract, after the DMF.

What it typically includes

In a traditional retirement village, the weekly service fee usually covers:

• Salaries of village manager, gardeners, maintenance, security
• Maintenance of communal areas (community centre, pool, gym, gardens)
• Building insurance for the structure (not contents)
• Council rates on the common land
• Water charges (sometimes — varies)
• Operator overhead and management costs

In a land-lease over-55s community, the weekly site fee usually covers:

• The lease of the land your home sits on
• Maintenance of common areas
• Management costs
• Sometimes water and council rates (sometimes billed separately)

What it usually does not include

• Your own electricity, gas, internet, phone
• Personal contents insurance
• In-home cleaning, meals, or personal care
• Strata levies (in strata-title villages — these are additional)
• Capital works levies (sometimes raised separately when major works are needed)

How fees can change

Most state Retirement Villages Acts allow weekly fees to increase annually, but constrain how:

• CPI-linked. The operator can increase the fee by CPI without resident approval.
• Above CPI. Increases above CPI typically require a resident vote at a meeting, with notice and a budget justification.
• Capital works. Major capital works often require a separate levy and may need 75% resident approval depending on state law.

In a land-lease community under the NSW Residential (Land Lease) Communities Act 2013, site fees are generally tied to CPI or a fixed percentage stated in the site agreement, with the operator able to apply once per year.

What to scrutinise before signing

• The current fee, in writing, and the budget showing how it is calculated.
• The 5-year history of fee increases at this specific village.
• The mechanism for above-CPI increases.
• Whether a sinking fund exists and how it is funded.
• Whether any major capital works are budgeted in the next 5 years that would trigger a special levy.

A village whose fee has been frozen for three years is not necessarily a good sign — it may indicate deferred maintenance that will arrive as a special levy.