Retirement village operators and their Asset Management Plans will come under the NSW Fair Trading microscope from July 1 and could face penalties without them.
NSW Fair Trading had extended the deadline for preparing the plan to July 1 but extended them because retirement village operators reported difficulties in meeting the deadlines set previously.
Many operators have criticised the plan as being unrealistic and laborious.
Some of our readers are concerned operators will use the plan requirements to pressure residents to pay "highly increased fees" and threatening to take them to the tribunal if didn't pay the extra.
A NSW Fair Trading spokesperson said the asset management plan scheme required operators to produce a 10-year record of all assets worth more than $1000 held by the village as well as their expected maintenance needs.
"The plans must be presented to residents for approval once reviewed and signed off by an independent auditor or quantity surveyor," the spokesperson said.
"The plans are to be presented to residents according to their financial year, which is a different date for each village. The plans are not required to be provided to Fair Trading.
"The offence provisions relate to failure to have a plan in place. These provisions start on July 1."
Fair Trading will audit retirement villages in coming months to test compliance with requirements under the Retirement Villages Act 1999, including obligations to have a comprehensive plan in place.
Retirement village operators must maintain a plan for each village they manage or operate and make the plan available to current and prospective residents.
The plan must document the costs of purchase, ongoing maintenance, repairs and replacement of a retirement village's major items of capital, including shared major items of capital and who will pay for them.
The information in the plan must include:
- Costs associated with both maintaining and replacing items of capital;
- Reasons for decreases or increases in costs;
- How often costs are incurred; and
- The expected lifespans of items of capital.
The plan must include the following components:
- An asset register of the village's major items of capital, including information about the effective life of items of capital; and
- A maintenance schedule of the village's major items of capital, including information about capital replacement.
Operators must also:
- Prepare a three-year report for capital maintenance extracted from the asset management plan and include it in the annual budget;
- Notify residents and make the three-year report available to residents and prospective residents, even when consent from the residents through the budget process is not needed;
- Include any proposals to replace or continue to maintain items of capital that are within one year of the end of their effective life or with accumulated costs of repairs that are greater than 90 per cent of the purchase price at the time the three-year report is prepared.
The Senior approached the Retirement Village Residents Association for comment.
Therese Murray
Wordsmith. Senior journalist. Editor. I have a proven track record in helping people and communities solve their problems. My career is all about telling stories.
Wordsmith. Senior journalist. Editor. I have a proven track record in helping people and communities solve their problems. My career is all about telling stories.
