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
14. Knowingly Included false information in Village Comparison Document
18. Defrauded residents who bought new unit - structure unfit for purpose, and unconscionable exit terms
19. Deceived residents - renaming of Village to Resort

14. Knowingly included false information in Village Comparison Document

The scheme operators knowingly included false information in the Village Comparison Document (VCD) for the Laurel Springs Retirement Village, published on their web site and dated 1 February, 10 June 2019 and 6 March 2020, and provided to prospective residents. They falsely stated that there had been no increase in the General Services Fees in 2018-2019, and no increase in the Maintenance Reserve Fund contributions in 2017-2018. This is an offence under sections 74 and 86 of the Retirement Villages Act.

14.1 False information in VCD - no Increases in GSF and MRF

14.1.1 In the VCD dated 1 February 2019, the scheme operators falsely stated that there had been no increase in Maintenance Reserve Fund contribution from 2016-2017 to 2017-2018:

Evidence Document D6.14 - 01

14.1.2 In the VCD dated 10 June 2019, the scheme operators again falsely stated that there had been no increase in Maintenance Reserve Fund contribution from 2016-2017 to 2017-2018, and also falsely stated that there had been no increase in General Service fees (GSF) from 2017-2018 to 2018-2019:

Evidence Document D6.14 - 02

14.1.3 In the VCD dated 6 March 2020, the scheme operators again falsely stated that there had been no increase in Maintenance Reserve Fund contribution from 2016-2017 to 2017-2018, and also falsely stated that there had been no increase in General Service fees (GSF) from 2017-2018 to 2018-2019:

Evidence Document D6.14 - 05

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14.2 Actual increases in GSF and MRF

14.2.1 The Laurel Springs fees for 2016-2017 and budgets for 2017-2018 and 2018-2019 show how much the fees actually increased:

Evidence Document D6.14 - 03

14.2.2 According to the 2017-2018 and 2018-2019 budgets, the GSF for singles increased from $154.30 +GST to $164.00 +GST per month.

14.2.3 According to the 2017-2018 and 2018-2019 budgets, the GSF for doubles and new singles increased from $195.20 +GST to $207.00 +GST per month.

14.2.4 According to the 2016-2017 village fees and the 2017-2018 budget, the MRF for all residents increased from $22.00 +GST to $33.00 +GST per month.

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14.3 The deception

14.3.1 I have converted the monthly fees to weekly fees to allow a direct comparison of actual amounts, by using the formula weekly fee = monthly fee x 12 / 52, and noted the deception on a copy of the VCD for 10 June 2019:

Evidence Document D6.14 - 04

14.3.2 The GSF actually increased by 6.0 % from 2017-2018 to 2018-2019, for doubles and new singles, not by 0% as published in the VCD.

14.3.3 The MRF actually increased by 50.0% % from 2016-2017 to 2017-2018, for all residents, not by 0% as published in the VCD.

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14.4 Why It matters

14.4.1 As evidenced by the following exchange at the 2018 AGM, the scheme operators knew that the fees would have to be significantly increased to achieve a self-funding GSF budget:

Evidence Document D6.14 - 06

14.4.2 I used Microsoft Excel to produce tables and charts to show the long-term cumulative effect of increases in GSF and MRF. For original sources of data, refer to refer to Evidence Document D6.3 - 07 and D6.3 - 08. The following chart shows the increases in fees for new singles and doubles:

Evidence Document D6.14 - 07

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