September asset management deadline looms for NSW retirement villages
Amendments to the Retirement Villages Act 1999 mean that all NSW retirement living facilities are required to have an asset management plan in place, and available to current and prospective residents, by 1 September 2021.
“One of the significant complaints commonly received from residents is that operators don't look after capital items, and that they are not replaced when they pass their usable life,” says Surekha Parajuli, Principal and Electrical Section Engineer at Northrop.”
“The requirement to maintain an asset management plan is to guard against such neglect.”
What should an asset management plan contain?
An asset management plan is a 10-year plan documenting the costs of purchase, maintenance and replacement of a retirement village’s major capital items, including shared items.
The plan must include:
- costs associated with both maintaining and replacing capital items
- reasons for decreases or increases in maintenance costs
- how often costs are incurred
- the expected lifespan of major capital items
The plan must comprise the following components:
- an asset register of the village’s major capital items, including information about the item’s effective life and capital replacement
- a maintenance schedule of the village’s major capital items
"The resulting management plan can then be used to meet the legislative obligation to produce a three-year maintenance and replacement schedule - a key ingredient for annual operating and capital budgets,” says Surekha.
Other benefits of asset management plans
Aside from any legal requirement, an asset management plan can be an invaluable tool to help manage any facility.
As well as the consequential smoother running of the facility, this plan can reduce complaints from residents, increase value and ultimately reduce loss.
“An asset management plan enables you to actively manage the assets you have, progressively maintaining, updating or upgrading them,” says Surekha.
“This means the chances of you being caught out by something failing unexpectedly is reduced, so that you can better control demands on cash."
Creating your asset management plan
Northrop works with many clients to create asset management plans, develop asset registers, assess existing services, develop capital and operating budgets, and conduct due diligence when considering the purchase of a facility.
The team can also offer training and guidance to retirement village managers to assist in meeting the new requirements.