Outline of Key Terms for Life Lease Village Scheme

Residency Rights

A resident is granted a non-transferable 45 year lease to occupy an independent living Unit in the Village by the owner Springfields Village Pty Ltd (“Springfields”). The Lease terminates on the resident’s death, on the resident deciding to leave the Village or if the resident for health reasons cannot safely live in the Unit.

Residents use the Village’s Communal Amenities and Common Areas.

Lease rights secure

A Resident’s Lease is protected by:

  • The conditions of the Lease;
  • The Retirement Villages Act 1992, a statutory charge securing the resident’s Lease Loan and a Memorial registered on the village land title.

Management

Springfields is responsible for managing the Village in accordance with the law governing retirement villages and the terms and conditions of the Village Scheme contained in the Lease and in the strata lot owning residents’ Lifestyle Agreements.                  

Lease Loan

  • No rent is paid for the Lease. Instead, the resident lends to the Lessor a “Lease Loan” free of any interest,for the duration of the Lease, and until a replacement resident Leases the Unit.
  • The Lease Loan equals the market value of the Unit under the “Village Scheme” terms.
  • When leaving the Village, the outgoing resident and the Lessor agree upon “Current Market Value” of the Residence. Failing agreement, it is determined by a valuer.
  • The Lease Loan is repaid to the outgoing resident even if the Lease Loan paid by the next resident is a lesser amount.

Loan Growth Sum

  • If the Unit is re-let for a Current Market Value that exceeds the Lease Loan, that excess, called the “Loan Growth Sum”, is paid to the outgoing resident together with the Lease Loan.

Amenities Fee

When the resident is repaid the Lease Loan the resident pays an Amenities Fee to the Lessor for the resident’s:

  • occupancy and use of the resident’s Unit and its amenities; and
  • shared available use of the Village’s Communal Amenities and Common Areas.

The Amenities Fee is calculated on the new Lease Loan paid for the Unit by the next resident. If the Unit is not re-let the fee is calculated on the Unit’s Current Market Value.

The Fee is calculated on the number of days the resident occupies the Unit at 2.5% per annum of the new Lease Loan but is capped after 10 years occupancy at 25% of the new Lease Loan.

Reserve Fund Contribution

To maintain the condition of the Village, there is a Village “Reserve Fund” which pays for repairs, renovations and capital replacements required for the Village’s buildings, Communal Amenities and Common Areas.The Reserve Fund is held on trust and administered by the Lessor.

When residents leave the Village and receive repayment of their Lease Loan and any Loan Growth Sum they make a contribution to the Reserve Fund. This is calculated on the number of days the resident occupies the Unit at 1% per annum of the new Lease Loan but is capped after 10 years occupancy at 10% of the new Lease Loan.

Operating Costs

Operating Costs for the Village are shared equally between the Units and are paid by monthly instalments.They mainly comprise rates, water use and service charges, the costs of insurance, electricity, gas, waste removal, repairs, maintenance, external painting, cleaning and gardening expenses for Communal Amenities and Common Areas, costs of providing amenities and services and management costs. They are budgeted for annually, after consultation with the residents.

The actual Operating Costs are determined after the end of the financial year. Any surplus is applied either to residents’ future Operating Costs or to other purposes approved by a residents’ “special resolution that are for the general benefit of the Village’s residents.

If there is a deficit the residents can be required to pay their share of the shortfall amount.

Resident's Own Outgoings

Residents pay for the electricity, gas, telephone and other services they use in their Unit. They also pay for local authority rates and charges and Water Corporation use and service charges that are directly charged to their Unit.

Administration Fee

An Administration Fee of $560 is payable by the resident on entry. The fee covers administrative and legal expenses incurred by the Owner in connection with granting your Lease.

Maintenance

In general terms, in respect of the Unit the resident is responsible for:

  • Keeping the interior and its fixtures and fittings, clean, well painted and in good tenantable repair and condition but are not liable for structural repairs;
  • Keeping the exterior areas and gardens tidy and well maintained;
  • Keeping waste pipes clean and functioning; and
  • Supplying, operating, repairing, upgrading, maintaining and if appropriate removing and replacing:
  1. internal improvements made by the resident or former resident;
  2. equipment added or substituted for existing equipment;
  3. all floor surfaces, carpets, tiles, linoleum, or other floor coverings;
  4. all curtains, blinds, tiles and wallpaper
  5. all light globes, light tubes, lost keys and access mechanisms or cards;
  6. all air conditioning equipment and ceiling fans;
  7. all air conditioning equipment and ceiling fans;
  8. requested and approved installations.

The Lessor must maintain:

  • The structure of the Village’s residences, other buildings and the Common Areas; and
  • The Communal Amenities, the Common Areas and their fixtures and fittings.

Refurbishment on departure

When the resident wishes to leave and have the Unit marketed, tradesmen are required to perform all necessary Refurbishment Works to restore the Unit more or less to the same condition it was in at the commencement of the lease term.

This work is arranged and supervised by the Lessor. The resident must pay for the Refurbishment Works.

Marketing for Replacement Resident

The Lessor markets the Unit personally or by its marketing agent. The Unit can only be marketed in accordance with the marketing provisions of the scheme.

The Current Market Value of the Unit is agreed upon between the Lessor and the outgoing resident or failing this is determined by a Valuer being the Lease Loan amount that a new resident is prepared to pay for the Residence under the Village Scheme.

If the Residence is successfully marketed by a real estate agent, the outgoing resident must reimburse the Lessor for one half of fees paid to the agent.

Amend Lease

Your Lease can be amended where this is required to comply with the law. Otherwise it can only be amended with your written agreement.

QUALIFICATION NOTE

The above Key Terms sets out some of the important Village Scheme provisions in an abbreviated form only. It is not intended to be a comprehensive statement of all the important Village Scheme terms. You should refer to a copy of the Village Scheme and Residency Lease (“Scheme Lease”) and the Disclosure Booklet to obtain full details and a proper understanding of the Village Scheme.

If any statement in this Outline is inconsistent in whole or in part with any term or terms of the Scheme Lease, the term or terms of the Scheme Lease in question shall prevail over the terms of this Outline.

Based on contract version Jan 16