Information Centre · Retirement Villages
Retirement Village Refurbishment Disputes in Victoria
Refurbishment and reinstatement disputes arise in Victorian retirement villages when an operator and a resident, former resident or estate disagree about what work is required, who is responsible for it, whether proposed costs are reasonable and whether the agreement and legislation authorise the proposed deduction. The answer turns on the contract, the applicable law, the condition of the premises, the character of the work and the supporting evidence — not on assumptions, general practice or what other villages do.
Key points
- The residence and service contract, the disclosure statement and the underlying occupancy structure (leasehold, licence, loan-licence, company-title or strata) determine the starting position — assumptions imported from residential tenancies, aged care or owners corporations are usually wrong.
- Repair, routine maintenance, reinstatement, refurbishment and improvement are different categories of work with different cost-allocation consequences — the label an operator places on a line item is not determinative and the substance must be analysed against the agreement, the Retirement Villages Act 1986 (Vic) and the actual condition.
- Entry and exit condition evidence — written reports, dated photographs and video, alteration approvals and maintenance records — is critical; where the operator cannot produce contemporaneous baseline evidence, the operator's case for material deductions is materially weakened.
- Proposed work and costs should be set out in an itemised written scope of works supported by competitive quotations, with administration fees, mark-ups and project-management charges separately identified — single aggregated refurbishment figures are not a sufficient basis to accept any deduction.
- Refurbishment deductions, delay to sale or reletting, ongoing recurrent charges and the maximum waiting period for payment of the exit entitlement must be reviewed together — an apparently reasonable refurbishment figure can become unreasonable when its effect on the timing and amount of the exit payment is considered.
- Obtain independent legal advice before authorising disputed work, accepting contested deductions, signing a release or settlement deed, vacating without inventory or allowing a statutory or contractual time limit to lapse — once a release is signed, the dispute is ordinarily over.
Table of Contents
- The direct answer
- What is a retirement village refurbishment dispute?
- Why these disputes commonly arise
- Identifying the retirement village agreement
- Identifying the legal and occupancy structure
- Contractual obligations and statutory protections
- Repair, maintenance, reinstatement, refurbishment and improvement
- Why terminology matters
- Fair wear and tear
- Damage caused by the resident
- Pre-existing defects
- Ageing, deterioration and ordinary depreciation
- Structural defects and building maintenance
- Alterations made by the resident
- Approved and unapproved alterations
- Accessibility modifications
- Fixtures, fittings and personal property
- Entry condition reports
- Exit condition inspections
- Photographs, videos and inventories
- Missing or inadequate condition evidence
- Scope of works
- Whether proposed work is necessary
- Whether the proposed standard is reasonable
- Restoring versus upgrading the premises
- Quotes, estimates and invoices
- Independent quotations
- Operator-selected contractors
- Administration fees, mark-ups and project-management charges
- GST and accounting treatment
- Who authorises the work
- Whether work may proceed while liability is disputed
- Urgent repairs versus disputed refurbishment
- Delays to sale or reletting
- Effect on the exit entitlement
- Ongoing recurrent charges during delay
- Refurbishment after a resident dies
- Role of the executor or administrator
- Joint residents and surviving occupants
- Complaining to the operator
- Requesting further particulars and records
- Negotiation and without-prejudice offers
- Independent building or quantity-surveying evidence
- Mediation
- When VCAT may be available
- Remedies and orders that may be sought
- Costs and proportionality
- Settlement deeds and releases
- Common mistakes
- Practical action plan
- Worked examples
- When urgent legal advice is needed
- Conclusion
- Frequently Asked Questions
The direct answer
In a Victorian retirement village refurbishment dispute, the resident's liability to pay for proposed work is determined by the residence and service contract, the disclosure statement, the Retirement Villages Act 1986 (Vic) and its regulations, the actual condition of the premises and the character of the work. Operators should distinguish genuine damage and agreed reinstatement from fair wear and tear, routine maintenance and improvements. Residents, former residents and estates should obtain the agreement, condition evidence, itemised scopes of work and comparable quotations before accepting any deduction.
Proposed work should be reviewed for necessity, reasonableness and contractual authority. Disputes can materially affect resale, reletting, the amount of the exit entitlement and the timing of payment to the outgoing resident or estate. Early legal advice may be valuable before work is authorised, deductions are accepted or settlement documents are signed — once a release is signed, the dispute is ordinarily over.
This article is reviewed by Julian McIntyre, Associate. It sits beneath the cornerstone Parke Lawyers article on retirement village disputes and VCAT in Victoria, and is intended to be read together with the broader guides on retirement villages in Victoria, the explanation of common contract clauses, the pre-signing checklist and the article on exit fees and resident rights on departure. It is general information only and does not constitute legal advice.
What is a retirement village refurbishment dispute?
A retirement village refurbishment dispute is a disagreement between an operator and a resident, former resident or estate about work claimed for the unit on or after departure. The dispute typically concerns one or more of the following questions: what work is actually required; whether the work is repair, maintenance, reinstatement, refurbishment or improvement; who is responsible for it; whether the proposed cost is reasonable and properly evidenced; whether the agreement and legislation authorise the deduction; and whether the work is delaying sale, reletting or payment of the exit entitlement.
Refurbishment disputes can arise in any departure scenario — voluntary departure, sale or reletting, transfer to aged care, termination of the residence right and the resident's death. The framework for analysing them is the same regardless of the departure trigger, but the facts, the urgency and the decision-maker differ.
Why these disputes commonly arise
Several recurring features drive disputes. Residence and service contracts are often long, technical and drafted in favour of the operator. Refurbishment clauses are commonly broad and capable of being read to capture work well beyond what most residents understood at signing. Entry condition reports are sometimes missing, perfunctory or not provided to the resident in a usable form. Operators frequently select their own contractors and provide a single aggregated quotation rather than an itemised scope. Residents, former residents and estates are often dealing with the dispute under significant emotional, financial or time pressure — they have moved, the resident has died, or recurrent charges and interest on bridging finance are continuing to accrue. The asymmetry of information, expertise and resources between operator and resident is often the practical reason the dispute exists.
Identifying the retirement village agreement
The first step in any refurbishment dispute is to identify the relevant agreement. The phrase "the agreement" is rarely a single document. In a typical Victorian village it comprises some combination of a residence contract, a services or management agreement, a disclosure statement given before signing, the village rules, by-laws or community rules, and an interest in land (lease, licence, company shares, units in a unit trust or strata title). The refurbishment obligation is rarely confined to a single clause — it is usually distributed across several documents.
Obtain the complete set. A residence contract read in isolation may understate or overstate the resident's obligation; reading it with the disclosure statement and the rules often changes the answer materially. Where documents have been varied or replaced over time, obtain the version in force at the relevant date.
Identifying the legal and occupancy structure
Victorian villages use several legal structures — leasehold, licence to occupy, loan-licence (sometimes called "loan-and-residence"), company-title, strata title and units in a unit trust. The structure affects what the resident owns, who maintains the unit and common property, who controls resale and how an exit entitlement is calculated. A common reason refurbishment disputes go wrong for residents is that they apply assumptions from one structure (typically residential ownership) to a different structure (commonly loan-licence). The structure must be identified expressly and the refurbishment clause read against it.
Contractual obligations and statutory protections
The Retirement Villages Act 1986 (Vic) and its regulations impose statutory obligations on operators, including disclosure obligations before signing, fairness and process obligations during occupation, and timing obligations on exit. Australian Consumer Law may apply to pre-contract representations about refurbishment, the unfair-contract- terms regime may affect particular clauses, and general principles of contract interpretation apply to the wording in the agreement. Statutes overlay the contract: a clause that purports to authorise an unreasonable deduction or that is inconsistent with the disclosure may not be enforceable in full.
Repair, maintenance, reinstatement, refurbishment and improvement
The single most important conceptual step in a refurbishment dispute is to separate five different categories of work that are often run together in operator correspondence. The table below sets out typical meanings. The categories are not fixed statutory definitions — the precise allocation depends on the agreement and the legislation — but they are widely accepted descriptive starting points.
| Concept | Typical meaning | Common responsibility issue | Evidence needed |
|---|---|---|---|
| Routine maintenance | Ordinary upkeep of the unit and common property during occupation | Whether operator or resident bears ongoing responsibility under the contract | Maintenance records, recurrent-charge breakdowns, agreement |
| Repair | Remedying identified damage or a failure of a building element | Cause of damage and contractual allocation | Photographs, invoices, expert evidence on cause |
| Reinstatement | Returning premises to an agreed prior condition (often relative to entry) | Whether a resident alteration must be reversed, and to what standard | Approvals, entry records, agreement, photographs |
| Refurbishment | Discrete body of work preparing the premises for resale or reletting | Scope, standard and cost allocation between operator and outgoing resident | Itemised scope of works, quotations, agreement, disclosure |
| Improvement | Work enhancing the premises beyond their prior condition | Whether the improvement can be charged to the resident | Before-and-after evidence, valuation, agreement |
| Fair wear and tear | Ordinary deterioration through reasonable use and the passage of time | Whether properly excluded from the resident's liability | Condition reports, age and use evidence, photographs |
Why terminology matters
The label an operator places on a line item is not determinative. Calling deferred painting maintenance "refurbishment" does not convert it into a chargeable deduction. Calling an upgrade "reinstatement" does not impose the cost on the resident. The substance of the work — what is actually being done, why, to what standard, and against what prior condition — is the operative question. A refurbishment dispute is often won or lost at the point of classifying each line item correctly.
Fair wear and tear
Fair wear and tear is the ordinary deterioration that occurs through reasonable use and the passage of time. Walls fade. Carpet pile flattens. Tapware oxidises. Whitegoods reach the end of their commercial life. Skirting boards develop scuff marks. Outdoor paintwork weathers. The longer a resident occupies a unit, the more wear and tear there will be, and that wear is generally not damage for which the resident is liable on departure.
Whether a particular item is fair wear and tear is a question of evidence. The age of the item, the standard at installation, the period of occupation, the reasonable expected life of the item, the use to which it was put and the appearance at entry and exit are all relevant. The contract must be read in light of these facts rather than in the abstract.
Damage caused by the resident
Damage that goes beyond fair wear and tear may give rise to a chargeable repair obligation. Burns in benchtops, broken tiles, damaged plasterwork, holes from heavy picture hooks, stains caused by spills, and similar identifiable damage attributable to the resident's conduct or that of their visitors are typical examples. The operator's case for charging the resident is stronger where the damage is plainly identifiable in the exit condition report and is not present in the entry condition report, where the cause is consistent with use during the resident's occupation and where the repair is itemised, quoted by reference to the specific damage and accompanied by photographs.
Pre-existing defects
Some items recorded as "damage" on exit were present at entry. An entry condition report — or contemporaneous photographs — is the single most important piece of evidence on this question. Where the resident or estate can demonstrate that a particular defect existed at entry, the operator's case for charging the resident for its repair falls away.
Ageing, deterioration and ordinary depreciation
Distinct from fair wear and tear is ordinary depreciation — the reaching of the end of a useful commercial life by an item that has done its job. Carpet installed twenty years before departure has reached the end of its life; tapware installed thirty years before departure is dated; benchtops installed in another decade may be outmoded. Replacement of items at the end of their commercial life is ordinarily a cost of operating the village, not a reinstatement obligation of the outgoing resident.
Structural defects and building maintenance
Structural defects — cracking attributable to ground movement, water ingress through external walls, failed waterproofing in bathrooms — are ordinarily the operator's responsibility as part of the cost of maintaining the building stock. They are rarely a resident reinstatement issue, even where the visible manifestation appears in the resident's unit. Expert evidence may be necessary to distinguish a structural defect from cosmetic damage.
Alterations made by the resident
Alterations made by the resident during occupation are a common source of refurbishment disputes. The starting position is the contract — most agreements distinguish approved from unapproved alterations and treat them differently. Approved alterations may not need to be reversed at all, may need to be reversed only on agreed terms, or may need to be brought up to a defined standard on departure. Unapproved alterations are more likely to attract a reinstatement obligation.
Approved and unapproved alterations
Where alterations were approved in writing, the reinstatement scope must match the approval. A clause requiring reinstatement of "all alterations" does not justify reversing alterations the operator approved on different terms. Where the approval is ambiguous or has been lost, contemporaneous correspondence and photographs of the unit during occupation may help to establish the scope of the approval.
Accessibility modifications
Accessibility modifications — grab rails, ramps, modified bathrooms, wheelchair-accessible features — are commonly made by residents as their needs change. Whether they must be removed at the estate's cost on departure depends on the contract, the original approval, the legislation and operator policies. Many operators are willing to retain accessibility modifications as a positive feature for incoming residents. Forced removal of approved accessibility modifications should be scrutinised against the original approval and the agreement, not accepted by default.
Fixtures, fittings and personal property
The line between fixtures (which form part of the premises) and personal property (which the resident or estate may remove) is a recurring source of dispute. Whitegoods, light fittings, blinds, carpet, bathroom cabinetry and built-in furniture commonly raise the question. The starting point is whether the item was installed with the intention of becoming part of the premises. The contract may expressly classify particular items. Personal property remains the resident's (or the estate's) to remove, and the operator's refurbishment scope should not assume their replacement unless their removal is the resident's entitlement and the cost of repairing any damage from removal is separately identified.
Entry condition reports
An entry condition report records the state of the premises at the start of occupation. A good entry report describes each room and each significant element, notes existing defects, attaches dated photographs and is signed (or at least acknowledged) by both parties. It establishes the baseline against which any departure claim is measured. The single most important piece of evidence in a refurbishment dispute is often the entry condition report and its photographs.
Exit condition inspections
An exit condition inspection records the state of the premises at departure. It should be conducted with the resident or estate's representative present, should allow that representative to record disagreements at the time, and should produce a written report with dated photographs. An inspection conducted unilaterally, without notice, and recorded only in the operator's internal file is far less persuasive evidence than one conducted on notice and in the presence of the other party.
Photographs, videos and inventories
Contemporaneous photographs and short video walk-throughs taken at entry, at significant events during occupation (for example after an alteration) and at departure are extremely valuable. Photographs should record the date metadata, be of usable resolution and cover both general views and close-ups of particular items. Where formal entry or exit condition reports are missing or inadequate, personal photographs and video are often what carries the case.
Missing or inadequate condition evidence
Where entry condition evidence is missing, the operator bears the practical burden of demonstrating the prior condition against which deterioration is measured. Where exit condition evidence is missing, the operator bears the practical burden of demonstrating the condition at departure. Operators who fail to maintain condition records often have weaker cases for material refurbishment deductions than they assume.
Scope of works
The operator should provide a written itemised scope of works identifying each room, the work proposed in that room, the standard sought, the materials specified and the supporting reasoning. A scope that records only a single aggregated line — "refurbish unit — $X" — is not capable of meaningful review and is a reasonable basis to request further particulars before any deduction is accepted.
Whether proposed work is necessary
Each line of the scope should be tested for necessity. Is the work actually required? Is it required because of the resident's use, or because of age, building maintenance or operator preference? Is the operator seeking to address a real defect or to upgrade the unit for resale? Items that are not genuinely necessary should not be charged to the outgoing resident.
Whether the proposed standard is reasonable
The standard sought matters as much as the line itself. Replacing a serviceable laminate benchtop with a new laminate benchtop is a different proposition from replacing it with stone. Replacing a builder-grade carpet with the same grade differs from replacing it with a higher specification carpet. The resident's contribution, if any, should be calibrated against restoration of prior standard, not the operator's current commercial preference.
Restoring versus upgrading the premises
The clearest analytical line is between restoration to prior condition and upgrading beyond it. Upgrades benefit the operator's resale or reletting prospects and should, in the ordinary case, be borne by the operator. Where a contract purports to require a contribution from the outgoing resident toward an upgrade, the calculation should isolate the upgrade component from the restoration component and only the restoration component should be within the resident's contribution.
Quotes, estimates and invoices
The operator should provide written quotations from the contractors selected to do the work. Quotations should identify the contractor, the scope, the materials, the labour rates, any allowances or provisional sums, and the GST treatment. Estimates are no substitute for quotations. Once work has been done, the resident or estate is entitled to copies of the actual invoices and to a reconciliation against the quoted amounts.
Independent quotations
Independent quotations from licensed contractors, prepared against the same itemised scope as the operator's quotation, are valuable evidence. Material discrepancies in price, materials specification or methodology between independent and operator-selected quotations are often the foundation of a successful challenge. Where the agreement requires the operator to obtain competitive quotations, failure to do so is itself a contractual issue.
Operator-selected contractors
Operators often have preferred contractors and use them across all units in a village. The use of preferred contractors is not inherently improper, but it carries risks. Preferred contractors may price work on the basis of bulk relationships that include reciprocal commercial benefits to the operator. They may follow specifications set by the operator rather than the actual condition of the unit. Their quotations may include components that would not appear in a quote obtained by an independent resident.
Administration fees, mark-ups and project-management charges
Administration fees, contractor mark-ups and project- management charges are common in refurbishment quotes and warrant close attention. The contract must authorise the charge, the amount must be reasonable, the basis of calculation must be transparent and any cap (contractual or statutory) must be observed. A 10% to 20% concealed mark-up on a $30,000 refurbishment is a significant number; resident or estate consent should be informed, not assumed.
GST and accounting treatment
Whether GST is added to or included in refurbishment figures must be clear. Apparent discrepancies between quoted and invoiced amounts are sometimes simply a GST issue rather than a substantive cost change. The exit calculation should treat GST consistently.
Who authorises the work
The agreement and the legislation determine who must authorise refurbishment work. In some structures the operator may proceed without express consent, subject to statutory and contractual notice and process. In others the resident or estate must authorise the work. Where consent is required, it should be given in writing on terms that preserve the right to dispute cost — "consent given without prejudice to liability for cost" is a common and useful formula.
Whether work may proceed while liability is disputed
Work that is genuinely urgent (safety, water-ingress, security) usually needs to proceed regardless of the dispute, but the cost may still be contested. Cosmetic refurbishment that is not urgent should not, in the ordinary case, be commenced until liability is resolved or consent is given on terms that reserve the cost issue. Authorising work without reservation often forecloses the dispute about cost as a practical matter.
Urgent repairs versus disputed refurbishment
The distinction between urgent repairs and contested refurbishment is important. Urgent repairs protect the building and reduce loss to both parties; the cost allocation can be argued later. Contested refurbishment primarily affects the operator's commercial position on resale and rarely requires immediate execution. Treating the two categories the same is a common source of disputes.
Delays to sale or reletting
Refurbishment disputes can delay sale or reletting and so delay payment of the exit entitlement. The agreement and the legislation may impose maximum waiting periods after which the exit entitlement is payable regardless of resale, and operators cannot ordinarily use a refurbishment dispute as a basis to extend that period. Document delay carefully — when scopes were provided, when quotations were requested, when works were said to be ready to commence — so the chronology is available if the dispute escalates.
Effect on the exit entitlement
Refurbishment deductions are taken from the exit entitlement — the amount otherwise payable to the outgoing resident or estate. Whether the deduction reduces the gross resale proceeds, is taken from the ingoing contribution, or is charged separately depends on the agreement and the structure. Refurbishment deductions should be examined as part of the full exit calculation, alongside deferred management fees, recurrent charges and other deductions. The broader exit-fees framework is dealt with in detail in the Parke Lawyers article on leaving a retirement village and exit fees.
Ongoing recurrent charges during delay
Recurrent charges may continue to accrue during a refurbishment dispute, subject to statutory or contractual caps. Operators should not use a refurbishment dispute as justification for extending recurrent-charge accruals beyond the applicable cap. Where the cap has been reached, ongoing recurrent charges should cease or be borne by the operator.
Refurbishment after a resident dies
Many refurbishment disputes arise after the resident's death. The executor or administrator inherits the dispute and must work with the operator within the estate-administration framework. The broader scenario — authority to act, access, recurrent charges, resale, exit-entitlement calculation and payment — is dealt with in the Parke Lawyers article on when a retirement village resident dies in Victoria. This article focuses on the refurbishment-cost issue itself, which often becomes the most significant single dispute the estate must resolve.
Role of the executor or administrator
The executor or administrator owes duties to the estate as a whole. Accepting inflated or unsupported refurbishment deductions without enquiry can attract criticism from beneficiaries. A prudent legal personal representative obtains the agreement, the entry and exit condition records, an itemised scope, independent quotations where material amounts are involved and independent advice before signing any release or accepting any deduction.
Joint residents and surviving occupants
Where the agreement records two residents and one has departed (including by death), refurbishment issues become more complex. The surviving resident may have a continuing right to occupy the unit. Refurbishment claims that interfere with that right must be examined carefully against the agreement and the legislation. Pressure to authorise refurbishment that is not currently required — because the survivor remains in occupation — should be resisted unless there is a clear contractual basis.
Complaining to the operator
Most refurbishment disputes begin with a written complaint to the operator. The complaint should set out the issue clearly, identify the contractual and factual basis of the objection and request a written response within a defined period. The operator typically has an internal complaint policy under the Retirement Villages Act 1986 (Vic) which should be followed. The complaint correspondence becomes important evidence if the matter later escalates.
Requesting further particulars and records
The resident, former resident or estate is entitled to ask for further particulars and supporting records — itemised scopes, quotations, invoices, condition reports, photographs, contractor licensing details and the contractual basis of each line item. Operators that decline to provide these particulars often weaken their position; disputes that proceed to mediation or VCAT typically turn on the underlying detail rather than the headline figure.
Negotiation and without-prejudice offers
Many refurbishment disputes resolve through negotiation. Written without-prejudice offers — clearly marked, identifying the basis of the proposed compromise and a response deadline — frequently produce settlements where open correspondence has stalled. Where mediation is available, a structured exchange of offers in the lead-up to mediation often narrows the issues materially.
Independent building or quantity-surveying evidence
For larger or more technical disputes, an independent building consultant, painter, carpet specialist or quantity surveyor can prepare a report on the cause of damage, the appropriate scope of works, the reasonable cost and the comparison with the operator's quotation. Expert evidence is often decisive where the dispute turns on whether items are fair wear and tear, whether structural defects are involved or whether quoted costs are within market range.
Mediation
The Dispute Settlement Centre of Victoria offers free mediation for many retirement village disputes. Mediation is informal, confidential and often resolves refurbishment disputes faster and at lower cost than VCAT proceedings. Mediation does not waive the right to proceed to VCAT if no agreement is reached. For longer or more emotionally difficult disputes — particularly those involving estates — mediation can also help to preserve relationships between family members who disagree about how to handle the operator.
When VCAT may be available
VCAT has jurisdiction under the Retirement Villages Act 1986 (Vic) over a range of disputes between residents (and former residents and their personal representatives) and operators. Whether a particular refurbishment-cost dispute is within jurisdiction must be checked against the current statutory wording before filing. VCAT's general jurisdiction, procedure, evidence and remedies are discussed in detail in the Parke Lawyers article on retirement village disputes and VCAT in Victoria and the generic going to VCAT guide. This article addresses only those aspects directly relevant to refurbishment disputes.
Remedies and orders that may be sought
Subject to jurisdiction, VCAT may make a range of orders in a refurbishment dispute, including declarations about the parties' rights under the agreement, orders for payment, orders restraining or requiring specific conduct and orders about the calculation of the exit entitlement. The available remedies depend on the particular dispute and the statutory framework. Strategy about what to seek and in what order is more important than choosing every possible remedy.
Costs and proportionality
VCAT ordinarily expects each party to bear its own legal costs in its residential lists and only awards costs in defined circumstances. Disputes about modest refurbishment sums must be analysed for proportionality: the legal and expert costs of running a contested VCAT hearing can outweigh the amount in dispute. Negotiated outcomes are often the rational choice for smaller matters. The Parke Lawyers article on costs consequences in Victorian litigation explains the broader framework.
Settlement deeds and releases
Settlement of a refurbishment dispute should ordinarily be recorded in writing. Operator-drafted releases commonly extinguish all claims by the resident and the estate, sometimes in very broad terms, and may include confidentiality, non-disparagement and indemnity provisions. Targeted amendments — reservation of identified claims, carve-outs for undisclosed information, deletion of overly broad indemnities and clarity about future recurrent-charge obligations — often improve the resident or estate's position materially. Releases should be reviewed by a lawyer before signing.
Common mistakes
Common mistakes in refurbishment disputes include accepting a single aggregated "refurbishment" figure without itemised support; treating fair wear and tear as chargeable damage; allowing operator-selected contractors to set both the scope and the price without independent review; authorising work without reserving the cost position in writing; ignoring statutory and contractual caps on recurrent charges; signing operator-drafted releases without amendment; missing the maximum waiting period for exit-entitlement payment; and treating improvements as reinstatement.
Practical action plan
A staged response is more effective than a reactive one. The plan below summarises a typical sequence — adjust to the facts of the particular dispute.
- Obtain the residence and service contract, disclosure statement, village rules and any subsequent variations in the form in force at the relevant date.
- Identify the refurbishment and reinstatement clauses, the recurrent-charge clauses, the exit-calculation clauses and any procedural obligations on the operator.
- Obtain the entry and exit condition reports and all dated photographs and video from entry, during occupation and at departure.
- Request a written itemised scope of works from the operator identifying each room, item, standard and supporting reasoning.
- Separate each scope line into damage, wear and tear, maintenance, reinstatement, refurbishment and improvement, and identify the contractual basis of each.
- Obtain independent quotations from licensed contractors for the items in dispute, against the same scope.
- Identify who has authority to approve the work under the contract and the legislation, and what notice and consent obligations apply.
- Challenge disputed items in writing with the contractual and factual basis, requesting a response within a defined period.
- Monitor resale or reletting activity, recurrent-charge accruals and the maximum waiting period for payment of the exit entitlement.
- Consider negotiation, without-prejudice offers and mediation through the Dispute Settlement Centre of Victoria before escalating.
- Verify VCAT jurisdiction and the remedy sought before filing any application.
- Obtain independent legal advice before signing any release, accepting any contested deduction or commencing or defending proceedings.
Worked examples
The following examples are illustrative only. They are not decided cases. Outcomes always depend on the agreement, the law and the evidence in the particular matter.
Example 1 — Repainting after ordinary wear. A resident occupied a unit for fourteen years. On departure, the operator proposes a complete internal repaint at the estate's cost. The original paintwork is faded but undamaged, and the entry condition report records new paintwork at the start of occupation. The estate obtains an independent painter's report confirming the paintwork has reached the end of its ordinary life. The estate challenges the proposed deduction on the basis that repainting after fourteen years is ordinary maintenance and depreciation, not chargeable damage.
Example 2 — Carpet replacement after long occupation. An operator proposes full carpet replacement and seeks recovery of the entire cost from the outgoing resident. The carpet was installed twenty-two years before departure and is consistent with the wear that would be expected over that period. There is no identifiable damage attributable to the resident. The resident takes the position that the cost is operator depreciation, not a chargeable item, and offers to contribute to the cost only if specific damage can be identified.
Example 3 — Approved accessibility modifications. A resident installed grab rails, a bathroom ramp and a modified shower with the operator's written approval. On departure the operator proposes complete removal of all modifications and reinstatement of the original layout at the estate's cost. The original approval did not contemplate removal. The estate proposes that the modifications be retained as a feature for the next resident at no cost to the estate.
Example 4 — Large refurbishment quote after death. An executor receives a $48,000 refurbishment quotation from the operator's preferred contractor. The quotation is a single line. The executor requests an itemised scope. When provided, the scope includes a full kitchen replacement, a full bathroom replacement and a new air-conditioning system. The executor obtains two independent quotations against the same scope at $32,000 and $36,000. The executor takes the position that the kitchen and bathroom replacements are improvements rather than reinstatement and that the air-conditioning system is at the end of its ordinary life and is operator depreciation.
Example 5 — Upgrade in disguise. The operator proposes replacement of laminate benchtops with stone benchtops, replacement of builder-grade tapware with high-end tapware and replacement of carpet with a higher specification carpet. The resident takes the position that the proposed work is an upgrade for the operator's commercial benefit, not reinstatement, and offers to contribute only to a same-specification replacement of items that are genuinely at the end of their life.
Example 6 — Materially different quotations. The operator's preferred contractor quotes $28,000. Two independent quotations against the same scope come in at $14,500 and $16,200. The resident requests the operator's written reasoning for the difference. The operator declines to provide further detail. The resident proposes that the work proceed at the average independent figure or, if the operator insists on using its preferred contractor, that any excess be borne by the operator.
Example 7 — Dispute delays resale. A refurbishment dispute remains unresolved for nine months after departure. Recurrent charges have continued to accrue during that period. The applicable contractual or statutory cap on recurrent charges has been reached. The estate writes formally demanding that recurrent-charge accruals cease and that the exit entitlement be paid in accordance with the maximum waiting period under the legislation regardless of resale.
Example 8 — No entry condition report exists. The operator proposes deductions for damage to plasterwork, flooring and benchtops. There is no entry condition report. The estate has photographs taken by family members on the day of move-in showing existing damage in substantially the same locations. The estate takes the position that the operator has not discharged its evidentiary burden and that the deductions cannot be sustained.
Example 9 — Identifiable resident damage. The exit condition report identifies a burn mark on the kitchen benchtop and a broken bathroom tile that are absent from the entry condition report. The cause is consistent with use during occupation. The estate accepts that these specific items are chargeable, but disputes the operator's proposal to replace the entire benchtop and to retile the entire bathroom — proposing instead a repair to the affected items at proportionate cost.
Example 10 — Concealed administration charges. The operator's "refurbishment" figure includes a 15% administration charge that is not separately identified. The resident requests an itemised breakdown. When provided, the breakdown reveals a substantial administration component. The contract does authorise an administration fee, but caps it at 10%. The resident challenges the 5% excess.
When urgent legal advice is needed
Urgent advice is appropriate where the operator has commenced work without consent or has commenced disputed work despite reservations, where the maximum waiting period for payment is about to expire, where the operator has refused to pay the exit entitlement, where a release is being pressed for immediate signature, where a limitation period is about to lapse, or where the dispute is interfering with the surviving resident's continuing occupation. In any of these cases the cost of early advice is generally a fraction of the cost of unwinding a poorly handled refurbishment dispute.
Refurbishment disputes can also intersect with other issues — property conveyancing where a unit is being transferred to a related party or family member, or broader estate administration. Parke Lawyers' property and conveyancing team is available to assist where those issues arise.
Conclusion
Retirement village refurbishment disputes are about evidence and analysis at least as much as they are about law. The contract, the disclosure statement, the legislation, the condition evidence, the itemised scope and the comparable quotations together determine what is recoverable. Operators who cannot produce that detail rarely sustain large deductions; residents and estates who do not insist on that detail often pay more than they should. Early, careful work — getting the documents, separating the categories, obtaining independent quotations, reserving the cost position and considering negotiation or mediation before authorising work — typically produces materially better outcomes than reactive responses after the work has been done.
Reviewed by Julian McIntyre.
Frequently Asked Questions
What is a retirement village refurbishment dispute?
It is a disagreement between an operator and a resident, former resident or estate about the work, standard or cost claimed for restoring, repairing, reinstating or refurbishing a retirement village unit on or after departure. Disputes commonly arise over what work is actually required, whether the proposed work goes beyond fair wear and tear, whether the agreement authorises the deduction, whether the quotations are reasonable, who controls the contractor selection, and whether the work is delaying sale, reletting or payment of the exit entitlement. The outcome depends on the residence and service contract, the disclosure statement, the Retirement Villages Act 1986 (Vic) and its regulations, the condition evidence and the character of the proposed work.
Who pays for refurbishment when a resident leaves?
The starting point is the residence and service contract. Some contracts allocate refurbishment costs entirely to the outgoing resident or estate; others share the cost between the resident and the operator on a defined formula or by reference to the length of residence; others limit the resident's contribution to identified items such as repainting and recarpeting. The legislation overlays the contract — operators cannot recover amounts they are not contractually or statutorily entitled to recover, and cannot recover deductions that are unreasonable, not properly evidenced or inconsistent with the disclosure provided when the resident signed.
Is refurbishment the same as maintenance?
No. Routine maintenance is ordinary upkeep of the unit and common property during occupation — gutters cleared, lifts serviced, painting cycles, garden upkeep — and contracts ordinarily allocate that work and its cost to the operator from the recurrent charges already paid. Refurbishment is the discrete body of work performed at departure to prepare the unit for resale or reletting. The two concepts are often conflated by operators seeking to recover what is, in substance, deferred maintenance from the outgoing resident or estate.
What is fair wear and tear?
Fair wear and tear is the ordinary deterioration that occurs through reasonable use and the passage of time. Faded paintwork, worn carpet pile in walkways, scuff marks on skirting boards, oxidised tapware and ageing whitegoods are typically fair wear and tear. The concept is not a fixed statutory definition for retirement villages — it must be read against the contract, the disclosure statement, the legislation and the proven condition. The operator generally cannot charge the resident for restoration of items that have simply aged through ordinary use.
Can the operator charge for repainting?
Sometimes, depending on the contract, the condition of the paintwork and the standard sought. Repainting a wall genuinely damaged by the resident is usually chargeable; full repainting of a unit that has merely faded after many years of ordinary occupation often is not. Many disputes turn on whether the operator is seeking to recoup deferred painting cycles or to restore identified damage. Independent quotations and dated photographs from departure (and ideally from entry) are central to the analysis.
Can the operator charge for new carpet?
Whether the cost of replacement carpet is recoverable depends on the contract, the age and condition of the existing carpet, the cause of any damage and the standard of replacement specified. Carpet that is genuinely soiled or damaged beyond reasonable use may give rise to a chargeable deduction; carpet that has reached the end of its commercial life through age generally is depreciation that should not be passed to the outgoing resident or estate. Itemised quotations identifying the carpet grade, the underlay, removal, disposal and installation are essential to any informed assessment.
Can the resident be charged for an upgrade?
Generally no. Work that improves the unit beyond its prior condition — installing a higher specification kitchen, upgrading bathroom fittings to a current commercial standard, replacing functioning whitegoods with new equivalents — is ordinarily an improvement that benefits the operator's resale or reletting prospects, not a reinstatement chargeable to the resident. Where the contract does authorise some contribution, the calculation should isolate the upgrade component and exclude it from the resident's share.
What if the proposed work improves the premises?
Work that takes the premises above their prior condition is, in substance, an improvement. Improvements are usually for the operator's commercial benefit and should be borne by the operator unless the contract clearly provides otherwise and the resident understood that allocation at the time of signing. The character of the work is a question of evidence, not labelling — calling an upgrade a 'refurbishment' does not convert it into a recoverable cost.
Does the agreement control the outcome?
The agreement is the starting point but not the end. The Retirement Villages Act 1986 (Vic) and its regulations impose statutory disclosure, fairness and process obligations that overlay the contract. The Australian Consumer Law may apply to representations made before signing. A clause that purports to authorise an unreasonable deduction, that is inconsistent with the disclosure provided, or that purports to exclude statutory rights, may not be enforceable to its full apparent extent. The agreement must be read together with the legislation, the disclosure and the actual condition evidence.
What evidence should the operator provide?
The operator should provide a written itemised scope of works, supporting quotations, the entry and exit condition reports, dated photographs of the items said to require work, the contractual basis of each deduction, the calculation of the exit entitlement and copies of relevant invoices once incurred. Summary figures and aggregated 'refurbishment' line items without underlying detail are not a sufficient basis for the resident or estate to accept a deduction.
Can I request an itemised scope of works?
Yes, and ordinarily should. An itemised scope identifying each room, the work proposed in that room, the standard sought, the materials specified and the supporting reasoning enables the resident or estate to engage meaningfully with the proposal. A scope that simply records 'refurbish unit — $X' is not capable of meaningful review.
Can I obtain my own quotations?
Yes. Independent quotations from licensed contractors, prepared against the same itemised scope as the operator's quotation, are powerful evidence. Material discrepancies in price, materials specification or methodology between independent and operator-selected quotations are often the foundation of a successful challenge to a refurbishment deduction.
Must the operator use the cheapest quote?
No. The operator is not required to use the cheapest available contractor and should not necessarily do so where quality, warranty, licensing or insurance differs. But the operator is required to act reasonably, and a quotation materially above comparable independent quotations, without supporting justification, is open to challenge. Reasonableness — not the lowest dollar figure — is the operative standard.
Can the operator charge a contractor mark-up?
It depends on the contract. Some contracts permit a defined percentage administration or project-management charge; others do not. Where a mark-up is charged, the resident or estate is entitled to see the underlying contractor invoice, the formula by which the mark-up is calculated and any contractual or statutory cap. Concealed mark-ups embedded in a single 'refurbishment' figure are usually a basis for further enquiry.
Can the operator charge administration fees?
Only where the contract validly provides for them and the amount is reasonable. An administration fee that duplicates work already covered by the operator's recurrent charges, or that is not contractually anchored, is open to challenge. The fee should be identified separately in the exit calculation rather than absorbed into the refurbishment figure.
What if there is no entry condition report?
The absence of an entry condition report is significant. The operator bears the practical burden of demonstrating the condition of the unit at entry against which any deterioration claim is measured. Where no entry record exists, contemporaneous evidence — photographs, inspection notes, correspondence about defects — becomes critical, and many disputed items may not be sustainable without baseline evidence.
Who decides whether damage was caused by the resident?
In the first instance, the parties try to resolve it through correspondence and evidence. Where the dispute is not resolved, it may be referred to the operator's internal complaint pathway, to Consumer Affairs Victoria, to mediation through the Dispute Settlement Centre of Victoria, or to VCAT under its retirement-villages jurisdiction. Determining causation is fact-sensitive and turns on the condition evidence, the timeline and any expert opinion.
What happens to approved alterations?
Alterations made with the operator's written approval are usually treated differently from unauthorised alterations. Approved alterations may not need to be reversed at all, or the resident may have agreed at the time of approval to specific reinstatement obligations. The reinstatement scope must match the approval. A clause requiring reinstatement of 'all alterations' does not justify reversing alterations the operator previously approved on different terms.
Can accessibility modifications be removed?
Whether accessibility modifications (grab rails, ramps, modified bathrooms, wheelchair-accessible features) must be removed depends on the contract, the original approval, the legislation and the operator's policies. Many operators retain accessibility modifications as a positive feature for resale or reletting to incoming residents. Forced removal of approved accessibility modifications at the estate's cost should be scrutinised carefully against the original approval and the agreement.
What if the resident has died?
After the resident's death the executor (after probate) or administrator (after letters of administration) generally takes on the role of negotiating refurbishment scopes and quotes with the operator. The legal personal representative owes duties to the estate as a whole and should not accept refurbishment deductions without satisfactory itemisation and evidence. The Parke Lawyers article on what happens when a retirement village resident dies covers the broader estate-administration framework; this article focuses on the refurbishment-cost dispute itself.
Can an executor challenge refurbishment deductions?
Yes. The executor stands in the shoes of the deceased resident for the purpose of dealing with the operator and may negotiate, accept or contest refurbishment deductions in the same way the resident could have. An executor who accepts inflated or unsupported deductions without enquiry may, in some circumstances, be open to criticism by beneficiaries.
Can work proceed while the amount is disputed?
Sometimes, depending on the contract, the urgency of the work and the consequences for sale or reletting. Urgent repairs (genuine safety, water-ingress or security issues) often need to proceed; contested cosmetic refurbishment usually does not need to be commenced before liability is resolved. Authorising work without reserving rights about cost is risky — the position should be reserved in writing before any work is permitted to start.
Can refurbishment delay the exit entitlement?
It can, but not indefinitely. The Retirement Villages Act 1986 (Vic) and the agreement together may impose a maximum waiting period after which the exit entitlement is payable to the outgoing resident or estate regardless of resale or reletting. Refurbishment delay that pushes payment past that period does not extend the operator's right to withhold. Document delay carefully and obtain advice if the period has expired without payment.
Do recurrent charges continue during the dispute?
Often yes, subject to any statutory or contractual cap that limits the recurrent charges payable after departure (or, where the resident has died, after death). The operator should not use a refurbishment dispute as a reason to extend recurrent charges beyond the applicable cap. Recurrent charge accruals should be reviewed in parallel with the refurbishment calculation.
Can the operator withhold all sale proceeds?
Not without a proper basis. Operators may apply contractually authorised deductions against the exit entitlement, but cannot ordinarily withhold the entire amount as leverage in a refurbishment dispute. Where withholding is excessive or unjustified, formal demand and, if necessary, VCAT proceedings may be appropriate.
Should I sign a release?
Only with legal advice. Releases drafted by operators commonly extinguish all claims by the resident and the estate, sometimes in very broad terms, and may bar future complaints about the refurbishment process or the calculation. Targeted carve-outs preserving identified claims and excluding undisclosed information are often achievable through negotiation.
Can the dispute be mediated?
Yes. The Dispute Settlement Centre of Victoria provides free mediation for many retirement village disputes. Mediation is informal, confidential, and often resolves refurbishment disputes faster and at lower cost than VCAT proceedings. Mediation does not waive the right to proceed to VCAT if no agreement is reached.
Can refurbishment disputes go to VCAT?
Often, yes. VCAT has jurisdiction under the Retirement Villages Act 1986 (Vic) over a range of disputes between residents (and former residents and their personal representatives) and operators, which can include disputes about refurbishment, reinstatement and the calculation of the exit entitlement. Whether the particular dispute is within jurisdiction must be checked against the current statutory wording before filing.
What orders can VCAT make?
Subject to jurisdiction, VCAT may make a range of orders, including declarations as to the parties' rights under the agreement, orders for payment of money, orders restraining or requiring specific conduct, and orders about the calculation of the exit entitlement. The available orders depend on the particular dispute and the statutory framework — the Parke Lawyers cornerstone article on retirement village disputes and VCAT explains the general procedure in more detail.
Will VCAT award legal costs?
Generally not. VCAT ordinarily expects each party to bear its own legal costs in the residential lists and only awards costs in defined circumstances. Costs orders should not be assumed; cost recovery is not a substitute for proportional case management. The Parke Lawyers article on costs consequences in Victorian litigation explains the general framework.
Do I need an expert report?
Sometimes. A building consultant's, painter's or carpet specialist's report can be valuable where the dispute turns on technical questions — whether paintwork is genuinely damaged or merely faded, whether carpet has been damaged or has simply reached the end of its life, whether structural cracking is the resident's responsibility or a building defect. Expert evidence is rarely necessary for small disputes but often decisive in larger ones.
Are there time limits?
Yes. Contract claims, statutory claims under the Retirement Villages Act 1986 (Vic), claims under the Australian Consumer Law and any other related claim each have their own limitation periods. Internal complaint processes and operator response steps also have prescribed timeframes under the legislation and the agreement. Identify the applicable time limits before the dispute is allowed to age — missed limitations can defeat an otherwise meritorious claim.
What records should I keep?
The residence and service contract, the disclosure statement, the village rules, any entry and exit condition reports, all correspondence with the operator, dated photographs and video, all notices of proposed work, every itemised scope and quotation, every invoice, expert reports, the exit-entitlement calculation, recurrent-charge statements, settlement offers, executor authority where relevant and the final settlement deed. Retain the records for at least the longest applicable limitation period.
When should I obtain legal advice?
As early as practicable, and certainly before authorising contested work, accepting disputed deductions, signing a release, vacating without an inventory, refusing to pay disputed fees, or allowing a limitation period to lapse. Independent legal advice is most effective before, not after, irreversible steps are taken.
Retirement Villages · Litigation & Dispute Resolution
Facing a retirement village refurbishment dispute?
Parke Lawyers advises Victorian residents, former residents, executors, administrators and families on retirement-village refurbishment and reinstatement disputes — analysing the agreement, the evidence and the quotations, negotiating with operators, and where necessary appearing in VCAT.
This article is general information only and does not constitute legal advice. Please obtain advice tailored to your circumstances.