THE LAUREL SPRINGS INVESTIGATION
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THE LAUREL SPRINGS RETIREMENT VILLAGE
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FINANCIAL INVESTIGATION
DETAILS OF FINDINGS
Details of Findings
7.Misused Capital Replacement Fund (CRF) 2017-2018
18. Defrauded residents who bought new unit - structure unfit for purpose, and unconscionable exit terms
19. Deceived residents - renaming of Village to Resort

7. Misused Capital Replacement Fund (CRF) 2017-2018

In 2017-2018, the scheme operators misused funds from the Capital Replacement Fund to refurbish units. This is an offence under section 91 of the Retirement Villages Act. Furthermore, the scheme operators falsely told the residents that the Act allowed them to do it, and encouraged residents to vote for a resolution to accept the Financial Statements at the 2018 AGM.

7.1 The misuse of the Capital Replacement Fund for unit refurbishment

7.1.1 According to the 2017-2018 Capital Replacement Fund report, $22, 694 was used for Unit refurbishment:

Evidence Document D6.7 - 01

7.1.2 According to the RECITALS in the Residence Contract and Service Agreement for Unit 10, the units in Laurel Springs belong to bodies corporate to which the Body Corporate and Community Management Act 1997 applies, and are not village capital items:

Evidence Document D6.7 - 07

7.1.3 According to s91(3) and s91(4) of the Retirement Villages Act 1999, using $22, 694 for Unit refurbishment: was therefore an offence:

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7.2 The scheme operators deceptive explanation

7.2.1 In response to my questions at the 2018 AGM, a scheme operator (Lance Taylor) gave this deceptive explanation, encouraging residents to vote to accept the Financial Statements:

Evidence Document D6.7 - 04

7.2.2 In response to my email of 11 October 2018, a scheme operator (Lance Taylor) stated in his email response of 15 October:

Evidence Document D6.7 - 05

7.2.3 In response to my email of 15 October 2018, the scheme operators stated in their letter of 1 November 2018:

Evidence Document D6.7 - 02

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7.3 The official warnings

7.3.1 On 2 November 2018, and on two subsequent occasions, I made written complaints to the Department of Housing and Public Works, the regulator of the Retirement Villages Act, about the financial mismanagement of the village. The regulator issued official warnings to the scheme operators about their financial mismanagement of Laurel Springs:

Evidence Document D6.7 - 03

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