Recent amendments were introduced to the 1999 Retirement Villages Act that increase retirement village operators’ obligations in the areas of asset management planning.
Operators are also required to be upfront with their transparency in the associated capital maintenance and replacement costs included within the annual budgets.
These obligations take effect as of 1st July 2022 or on the commencement of your new Financial Year.
Prior to the commencement of the asset management plan, all residents of the retirement village must be notified that the plan is available for inspection and comment 60 days prior being 1st May 2022.
Without the appropriate processes and systems in place, these obligations will become a great challenge to meet within the required timeframes.
Does your organisation have a facilities management platform and appropriate business processes in place to enable you to meet these obligations?
More specifically, a 3-year plan within the annual budget estimating capital maintenance and replacement costs is inclusive of:
· an estimate of the proposed maintenance and repair costs
· the proposed frequency of maintenance or the schedule of dates on which the proposed maintenance or repair will occur
· the type of maintenance or description of repair
These requirements apply to all major items of capital, or group of items, with a purchase price of more than $1,000. With such a low threshold, this significantly increases what is within the scope of an asset management plan.
Within an annual budgeting cycle, should there be any changes to these proposed activities and costs, the asset management plan must be revised within 28 days of the budget being approved.
Furthermore, a retirement village operator must include within the asset management plan an asset register for all major items of capital. This must contain:
· a brief description of the item
· the effective life of the item
· the asset ID number
· the brand model number and serial number if available
· the date of purchase and purchase price
· or for a building the date of construction and associated construction cost
This information is required for all major items of capital purchased after 1st February 2021 and on a best endeavours basis, to the extent that the information is available, for items purchased prior to this date.
For any major item of capital purchased after the commencement of the asset management plan, the asset register must be amended within 7 days from the date of purchase.
There exists a requirement for retirement village operators to ensure that the asset management plan is kept up to date and revised in accordance with these amendments to the Retirement Villages Act.
These amendments may seem challenging, however, with an appropriate facilities management platform in place, you can maintain an asset management plan in accordance with the act.
Providing transparency to the residents of your retirement village and improving the overall resident experience through good governance and management should not compromise.