Responsibility for Reinstatement Costs in Leasehold & Licence Villages

Tabular Summary of Section 62 (as at 27 May 2008) (assuming no “accelerated wear” or deliberate damage”)

Table A s62(2) – Residence Contract before 15 March 2006:

Date of residence contract

If residence contract specifies party responsible

If residence contact does not specify party responsible

Before 1 July 2000 (“existing residence contract”)

Costs paid by party specified in contract

Costs shared by resident and scheme operator in same proportion as they share sale price

From 1 July 2000 to 14 March 2006

Costs paid by party specified in contract

Costs paid by scheme operator

Table B s62(3) – Residence Contract on or after 15 March 2006:

Date of residence contract

If resident shares in capital gain on exit

If resident does not participate in capital gain

On or after 15 March 2006

Costs shared by resident and scheme operator in same proportion as they share capital gain

Scheme operator

Note: The definition of “reinstatement works” in the Act does not operate to limit the work an operator can do when a resident departs, HOWEVER, it does limit the costs that can be recovered from the resident (if the resident has any responsibility for those costs according to the summary above). If an operator performs a more substantial renovation than goes beyond the definition of “reinstatement works”, they can only recover the costs that would have been necessary for a mere reinstatement (and then only to the extent that the resident has responsibility for those costs according to the summary above). Where a more substantial renovation is proposed, a resident should request that a hypothetical quote for a mere reinstatement be obtained first, so it can be used for calculating the resident’s contribution.

Reinstatement work – responsibility of costs
contracts dated before 1 Feb 2019