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Retirement village operators must give residents clear information about the village’s income and spending.
Legal and financial risks of non-compliance
Operators must meet their legal obligations related to meetings under the Retirement Villages Act and Regulations. Failure to comply can lead to penalties of up to $10,000.
Non-compliance includes:
- not holding required meetings
- not following rules about recurrent charges.
Consulting with the residents’ committee about the annual budget
Operators must hold at least two meetings with the residents’ committee to discuss the village’s annual budget before the annual meeting.
When a meeting is not required
Meetings are not required if the committee confirms in writing that one or both of the meetings are not needed.
How to arrange a meeting with the residents’ committee about the annual budget
To arrange a meeting about the annual budget, the operator must:
- Send each committee member a written notice at least 10 business days before the meeting.
- Include the time, place and agenda in the notice
Include the business to be transacted at the meeting and required information. The operator, or someone authorised to speak on their behalf, must chair the meeting.
Required information
The business agenda for these meetings must provide required information about the village annual budget for the previous and current year, including a summary of actual and estimated income and expenditure and the statements and information upon which this statement is based. Operators may provide unaudited accounts for these meetings.
Consulting with residents at the annual meeting
Financial information you must give residents before the annual meeting
Operators must:
- Send a written notice to each resident at least 10 business days before the meeting.
- Include the time, place and agenda in the notice.
The notice must include:
- Any business to be discussed at the meeting.
- An audited financial statement for the previous financial year showing:
- Income from residents and how it was spent.
- Any income or expenses related to a capital fund.
- Estimated income and expenses for the current financial year.
- Estimated income and expenses for any capital fund for the current financial year.
- A list of items covered by recurrent charges, with details and amounts.
- Details of any management expenses, including how they are shared between villages or other businesses.
- An invitation for residents to:
- submit written questions at least 5 business days before the meeting
- ask questions at the meeting.
- Any other information required by regulations (see regulation 11).
Information must clearly show details for the specific retirement village. If a village has more than one site, the information must relate to the site where the residents attending the meeting live and follow standard accounting practices.
The annual meeting must be held within 4 months after the end of the village’s financial year. It is the responsibility of the operator to establish the financial year for the village and communicate this to residents.
Consultation and transparency
An operator must:
- invite residents to submit written questions at least 5 business days before the meeting and provide reasonable opportunity for residents to ask questions at the meeting
- provide detailed written answers within 10 business days if questions cannot be answered at the meeting
- keep accurate minutes and distribute them to residents within 10 business days after the meeting.
Meeting of residents
Operators may call a meeting of residents at any time.
They must also hold a meeting with residents every year. More information can be found in financial reporting and consultation.
Procedures at meetings
If an operator holds a meeting, they must give residents a reasonable chance to ask questions. Residents can ask questions at the meeting and request a written response. The operator must give a detailed written response within 10 business days.
At the annual meeting, the operator must answer questions about financial information in reasonable detail. They must do this either at the meeting (where possible) or in writing within 10 business days.
Operators do not have to answer questions that are unreasonable.
Meeting minutes
Within 10 business days of any meeting, the operator must ensure the minutes are either:
- provided in writing to each resident (for the annual meeting), or
- made available for residents to inspect in an easily accessible way.
Voting at meetings
If a decision needs to be made at a residents’ meeting:
- each resident at the meeting (one note per residence) gets one vote, cast either in person or by absentee vote
- the decision is made by a simple majority of votes cast
If the decision is about a special levy, at least 75% of residents who vote (one vote per residence) must support the proposal.
Auditing of village accounts
Audits must be performed by a registered company auditor as defined by the Corporations Act 2001 (Commonwealth).
Requests for interim financial reports and invoices
Residents or the residents’ committee can ask for interim financial reports and invoices showing spending for the current financial year up to the last completed quarter.
Operators:
- must provide the report within 15 business days of the request
- may charge a reasonable fee to prepare it.
Failure to comply can lead to penalties of up to $5,000.
How to present financial information
Financial information must:
- Be specific to the retirement village (and to the site where the residents live if there are multiple sites).
- For the annual meeting, the audit must be done by a registered company auditor.
- Follow generally accepted accounting standards.
- Be comparable with previous year’s accounts and current year estimates.
- Use clear formatting and consistent terminology.
Other best practices include:
- Using multiple communication methods (not just technology) to share notices and minutes.
Contact the Retirement Village Unit
Email: retirementvillages@sa.gov.au
