Reinstatement fees in retirement villages explained

Fees and charges are one of the main things that confuses people moving into and out of retirement villages.

That’s why it’s important to understand what each fee or charge is and when it is applied.

One of the charges that some people can be hit with when they leave retirement villages is a reinstatement fee.

So, what is a reinstatement fee?

Well, a reinstatement fee may be charged to you when you vacate your retirement village unit to cover the cost of returning the unit to the condition it was in when you move in.

Retirement village lawyer Richard McCullagh writes that only damage needs to be covered, with the exception of fair wear and tear.

“Residents whose village contract commenced on or after 1 July 2000 are, if the contract requires, liable to pay for the reinstatement of their residential premises to the condition the premises were in when they moved in, fair wear and tear excepted,” he writes.

However, there are exceptions.

“If the contract requires a greater contribution by you, that obligation is not enforceable unless  the contract was entered into prior to 1 July 2000 and either (a) you agree that the usual village tradespersons carry out the work or (b) you accept one of up to three quotes provided by the operator,” Mc Cullagh writes.

“The other main exception to a resident contributing to reinstatement applies if (a) the operator does not attach a complying signed condition report to the village contract and (b) you are not a ‘registered interest holder’.”

You’re not classed a registered interest holder if your retirement village contract is for a licence or short term lease.

But what do you do if you’re being charged a reinstatement fee and disagree?

McCullagh suggests you request any quotes for reinstatement include an estimate covering fair wear and tear, and another covering anything classed as beyond fair wear and tear.

“If that is not provided, or it is but you find the apportionment unreasonable, get your own quote for each item of reinstatement with a reasonable apportionment noted in the quote by the relevant tradesperson (eg painter) or supplier (eg for carpet),” he writes.

“With this, seek to negotiate a compromise with the operator or, failing agreement within a reasonable time, apply to the Tribunal (Consumer Trader and Tenancy Tribunal) for an order with your quote to be presented as evidence.”

With this in mind, it’s important to remember that any issues or concerns with your retirement village contract may require some legal assistance or advice.

Tell us, have you ever been hit with a reinstatement fee? How much did it cost you?