The importance of Kiama Council’s current efforts to develop a separate registrar of assets for the Blue Haven Independent Living Units (ILU) has been highlighted by Fair Trading issuing an on-the-spot infringement penalty notice of $2200 for failure to keep and prepare an up-to-date asset management plan for the ILUs.

An asset management plan is a 10 year plan, documenting 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 and who will pay for them.

Amendments to the asset management plan requirements were part of the changes to retirement village laws that were introduced in 2021, and operators had until 1 July this year to comply with the new rules.

“The lack of an asset management plan for the retirement villages was identified as significant issue in the State of the Organisation report and is also an action item of the Strategic Improvement Plan,” says Council’s CEO Jane Stroud, who is advising Independent Living Unit owners at Bonaira and Terralong St of this development in person.

“Staff have been working on developing the asset management plan and it should be finalised in three months.

“Inspections of units are necessary for this process, which has wrongly led some residents to think this is related to the keep, sell, lease options of Council. It has nothing to do with that at all, but is a requirement of the Retirement Villages Act that needs to be completed urgently.”

As foreshadowed in the budget process, the development of a comprehensive asset management plan will include a maintenance schedule of the major items of capital, including information about capital replacement which could have a significant extra cost given the age of the Terralong buildings.

“Council has currently allocated less than one per cent of Blue Haven’s insured value ($190 million) towards to asset management whereas the industry standard is four to eight per cent,” says Ms Stroud.

The plan will have to be independently assessed by a quantity surveyor or auditor. It will need to cover everything from kitchen cupboards to lifts and roofs.

Council also received warnings from Fair Trading for the accounts not being audited and the annual meeting agenda not being in a compliant format.

It is unclear whether there will be additional penalties imposed while the situations are being addressed.