More regulation changes are on the cards, this time for retirement village operators in NSW.
On the 23 December 2020 the NSW Department for Fair Trading notified retirement living operators that there would be a raft of new compliance requirements to fulfill in 2021.
One of the biggest changes comes in regards to asset management.
From 1 July 2021, operators are expected to maintain an Asset Management Plan (AMP) for the village’s main capital items.
This plan must be available to current and prospective residents, and include:
- Costs associated with maintaining and replacing items of capital.
- Reasons for decreases or increases in costs.
- How often costs are incurred and the expected lifespans of items.
- Maintenance and replacement requirements of items of capital.
Back in December the Department said, “To allow time for operators to prepare the asset management plans and fully comply with this requirement, penalty provisions for non-compliance will not commence until the second half of 2021”.
This week our colleagues over at Thomson Greer shared updated information, which says from 1 September 2021, village operators in NSW are expected to:
- Prepare in consultation with the residents, an AMP including prescribed content every 10 years in relation to each village they manage;
- Include into the AMP an asset register being a list of the major items of capital and their prescribed information (Asset Register);
- If capital maintenance is included into the proposed annual village budget, include into the proposed budget a 3-year report relating to capital maintenance for major items of capital that is extracted from the AMP current for the corresponding period;
- Update the AMP within 28 days of the annual budget being approved, if the 3-year report included into the approved annual budget differs from the AMP;
- Update the AMP within 7 days of the purchase of a major item of capital.
This is important. If a major item of capital is not in the asset register, funding for its capital maintenance from the capital works fund or recurrent charges are not authorised.
Concurrently with the New Regulations, the Department of Customer Services has issued Secretary’s Guidelines for Retirement Villages AMPs, including a recommended template to follow when developing an AMP.
I managed to track down the gazette information which showcased the likely template sample and guidelines for the AMP’s in Appendix 1 & 2, pages 19-21. You can view the information here.
For those operators keen to commence planning for this activity it may be a great resource to start helping you plan for developing your AMP.
Alternatively, engaging the services of a Quantity Surveyor would also be an option to consider for time poor village professionals.