Asset management plans

An asset management plan documents the costs of purchase, and ongoing maintenance, repairs and replacement of a retirement village’s major items of capital, including shared major items of capital.

The plan must include the following content:

• an asset register of the village’s major items of capital, including information about the remaining effective life of items of capital
• capital maintenance information about each major item of capital including the estimated costs of maintenance.
• operators must also prepare an annual capital maintenance report with information from the asset management plan to inform expenditure for the annual budget.

Read the secretary guidelines to asset management plans

A major item of capital is an item of capital for which an operator is responsible, that

• has a purchase cost of $1,000 or more, or
• is part of a group of items of capital
  • that are similar
  • each of which has a purchase price of $1,000 or more and
  • each of which has the same effective life and financial year of acquisition.
• but does not include equipment that is a consumable used in the operation of an item of capital or in the day-to-day operation of the village.

Operators cannot charge residents for maintenance or repairs of a major item of capital if the item is not listed in the Asset Register.

An asset register is a list of major items of capital for which operators are responsible and for which residents pay maintenance.

Operators must record all new and existing major items of capital in the asset register, including those items they share with other villages or aged care businesses.

The asset register must include the information specified in the Regulation.

Operators must include certain information about capital maintenance in the proposed annual budget.

Operators must prepare an annual capital maintenance report for major items of capital, including shared major items of capital, and include it in the proposed annual budget.

To prepare the report operators must take information from the asset management plan, including: 

• dates for the proposed maintenance to be undertaken during the budget year,
• a summary of the capital maintenance proposed for the next 3 years including a description of the type of maintenance proposed and estimated costs of the maintenance.

In addition the report must include the amount of money in the capital works fund for capital maintenance.

Operators must also:

• notify and make the annual capital maintenance 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 1 year of the end of their effective life or with accumulated costs of repairs that are greater than 90% of the purchase price at the time the annual capital maintenance report is prepared.

The annual capital maintenance report and 3-year summary is part of the annual budget. It itemises the proposed capital maintenance costs for the annual budget year.

Residents can provide or refuse their consent to expenditure in the proposed budget. If residents refuse to give their consent to the budget, the operator or a resident may apply to the Tribunal to make an order about the proposed expenditure.

Operators must update the asset management plan, including:

• recording in the asset register items purchased, withing 21 days of the purchase,
• amending the plan so it matches an approved annual budget’s capital maintenance report. This must be done within 28 days of the budget being approved,
• as soon as reasonably practicable, after each time a major item of capital is maintained or repaired,
• the total costs of capital maintenance estimated at the commencement of the plan are likely to increase by 25% or more (excluding Consumer Price Index (CPI) increases).

Operators must make the most up to date version of the asset management plan, including the annual capital maintenance report available at the village or at a place of business in New South Wales, for inspection by a resident or prospective resident or a person acting on their behalf.

Operators must also make a hard copy or an electronic copy available 7 days after receiving a request from a resident or a prospective resident.

If operators are not required to provide residents with a proposed annual budget, then operators must notify residents there is a copy of the annual capital maintenance report available for inspection by residents and prospective residents at all reasonable times.

Operators must have an independent assessment done on the draft asset management plan they prepare:

• the assessment must be prepared by an independent quantity surveyor or the auditor of the village whose appointment was consented by the residents
• it must confirm that the plan meets the requirement of the Regulation and be annexed to the proposed plan