Asset Management Requirements for NSW Retirement Villages

Over the past few years, the asset management practices of NSW retirement villages have been the subject of much scrutiny. The 2017 Inquiry into the NSW Retirement Village Sector and subsequent NSW Government regulations sought to address concerns around transparency and financial practices to ensure fair and equitable housing for NSW’s ageing population.

The regulations mandate that operators maintain up-to-date and detailed asset management plans, requiring thorough documentation, regular updates, and transparency for residents.

While these regulations aim to improve standards, they have also introduced their own share of complexity and confusion. This article aims to clarify your asset management requirements in light of these changes.

NSW Retirement Village Asset Management Requirements

Under the updated regulations, operators are required to create and maintain an accurate asset register, 10-year maintenance schedule, and 3-year maintenance report.

Let’s look at each in more detail:

Asset Register

The asset register is a detailed list of all significant capital items that operators are responsible for, including shared assets with other villages or aged care businesses. This register must be maintained and updated to meet these requirements:

• Includes all capital items with a purchase cost of $1,000 or more.
• Must contain details such as description, location, condition, purchase date, price, and effective life of each item.
• Requires regular, comprehensive audits, especially for older facilities.
• Must be updated within seven days of acquiring new assets.
• Allows grouping of similar items purchased in the same financial year and with the same effective life.

Maintenance Schedule

The maintenance schedule is derived from the asset register and outlines plans for the upkeep and replacement of major capital items, ensuring long-term operational efficiency. As such, it should:

• Provide a strategic plan for the maintenance and replacement of major assets.
• Detail required maintenance, repair activities, replacement plans, and associated costs.
• Include shared assets with other villages or aged care facilities.
• Be closely integrated with the asset register to maintain accuracy and consistency.
• Operators are not penalised if certain details, such as brand model numbers, are unavailable.

Three-Year Maintenance Report

Operators must produce a three-year maintenance report to inform the annual budget. This report is essential for forecasting and planning maintenance expenses.

• Must include estimates of costs, dates, and types of proposed maintenance and repairs.
• Details the amount of recurrent charges allocated in the capital works fund.
• Needs to be accessible to residents and prospective residents, even without requiring their consent through the budget process.
• Must cover plans to replace or maintain items nearing the end of their effective life or with repair costs exceeding 90% of the purchase price.
• Helps residents understand and approve or refuse the proposed budget expenditure.

Keeping the Asset Management Plan Up to Date

Operators are required to keep the asset management plan current by reflecting new acquisitions, budget adjustments, and significant maintenance activities.

• Update the plan with new capital purchases, amendments post-budget approval, and after major maintenance activities.
• The plan must also reflect any significant cost increases (25% or more).
• The latest version of the plan and the three-year report should be readily available for inspection by residents and prospective residents, in either hard or electronic copies within seven days of a request.
• Operators must inform residents about the availability of the three-year report if a proposed annual budget is not provided.

Independent Assessment

An independent assessment by a qualified quantity surveyor or auditor, approved by the residents, is required to validate the asset management plan.

• The assessment confirms that the asset management plan meets all regulatory requirements.
• This independent review must be included with the proposed plan for residents’ feedback and comments.

By adhering to these detailed requirements, retirement villages can achieve high standards of transparency, financial integrity, and operational efficiency, ultimately benefiting residents and commercial stakeholders alike.

Overcoming Challenges in Asset Management

Operators face several challenges in meeting these requirements, including:

1. Detailed and thorough documentation of all assets is essential but can be time-consuming and resource-intensive.
   
2. Maintaining accurate and up-to-date information is critical for compliance and operational efficiency, yet it requires constant updates and verification.
   
3. Regular updates to asset registers and maintenance schedules are necessary to reflect changes and ensure compliance, posing an ongoing challenge.
   
4. Integrating data from various sources into a cohesive system can be complex, but it’s vital for efficient management and decision-making.

How Kairos Helps Retirement Villages

At Kairos, we support internal teams at retirement villages and aged care providers to remain compliant and benefit from effective asset management. There are four ways we help:

1. Asset Data Capture

• Create asset registers of all maintainable asset and building fabric elements. Cleanse and manipulate the data to directly upload in your asset management system.
• Linking and mapping historical and existing asset and financial information against newly attained asset verification data to ensure no legacy data is lost.
• Custom built forms suitable to your requirements and attributes to optimise data usability.

2. Building Condition Audit

• Building asset, and fabric condition audits. Written summaries and detailed analysis of overall condition status, recommendations, cost profiling, way forward and other tailored reporting requirements.
• Tailored programs to suit your business specific requirements. Can including a broad range of other value add activities whilst on- site to maximise your businesses base line knowledge and drive its adoption.

3. Asset Management

• Lifecycle Plans which include 10+ year capital expenditure programs and deep analysis on an organisations asset base.
• Provide detailed analysis on a business facilities management requirement, using an accurate asset register and required maintenance regimes as per Australian Standards.
• Programmed and preventative maintenance schedules.
• Capture all other relevant costs associated to whole of life asset management such as reactive maintenance and CPI scales.

4. Compliance

• A range of essential safety measure and compliance auditing. Such as means of egress, exit doors, fire doors, system interface testing, annual passive inspections and the supply and certification of annual fire safety statements.
• NCC/BCA audits relevant to your building and the standard associated.
• DDA assessments in alignment with AS1428.
• Building risk assessments which identify an array of operational, compliance or environmental risks to the businesses.
• Other assessments such as Asbestos and Emergency Management Planning.

What Next?

Today, retirement villages in NSW are held to a higher standard of asset management. While it’s essential to remain compliant, it’s equally important that you don’t treat this as a “box-tick” exercise. Operators who approach asset management as a value-add initiative will undoubtedly benefit from greater efficiency, fewer disruptions, lower costs, and more accurate financial forecasting.

We work with retirement villages, aged care providers, and healthcare services in NSW, and across Australia and New Zealand.

It’s never too early to understand how precision data capture can enhance the effectiveness of your asset management strategy. Complete the form below and we’ll be in touch as soon as possible.