Since the start of the COVID-19 pandemic the Minister for Better Regulation and Innovation in New South Wales has made six orders granting regulatory exemptions with respect to Retirement Villages.

These exemptions were first issued on 27 May 2020 and have recently been reissued for a third time, extending their operation until 31 March 2022. A new exemption order relating to Asset Management Plans (AMP) has also been issued.

Extension of existing Ministerial Exemptions

The six existing Ministerial orders granting exemptions have now been extended to 31 March 2022, as gazetted on17 September 2021. 

New Ministerial Exemption – Asset Management Plans

The new exemption order relating to AMPs was gazetted on 24 September 2021.

The order exempts Retirement Village Operators (RV Operators) from liability for non-compliance with clause 26C(1) of the Retirement Villages Regulations 2017 (NSW) (the RV Regulations) until 31 March 2022.

Clause 26C(1) of the RV Regulations requires RV Operators to notify and make available to residents copies of their Village’s AMP and obtain and provide a written independent assessment in relation to the AMP. Further, clause 26B(3) required RV Operators to prepare their first AMP by their Village’s first financial year end after 1 July 2021.

The exemption means that until 31 March 2022, RV Operators do not need to have prepared and made available the AMP and independent assessment. This would mean that RV Operators who would have had to produce their first AMP at 1 January 2022, due to it being their financial year end, now need to produce it by 31 March 2022.

Typically, under section 101A of the Retirement Villages Act 1999 (NSW), RV Operators are required to prepare an AMP in accordance with the RV Regulations, or face a penalty of 100 penalty units (or $11,000). By exempting compliance with clause 26C(1) of the RV Regulations until 31 March 2022, it in effect exempts RV Operators from the requirement of section 101A for the period.

However, the Exemption Order has some caveats:

  • The RV Operator must still present the parts of the AMP necessary to meet the requirements of Clause 19A of the RV Regulations. This clause requires RV Operators to include in the annual budget a report on specific matters relating to the maintenance of major items of capital in the 3-year report. Clause 19A(3) lists the items that must be included such as  the amount of recurrent charges set aside in the capital works fund for capital maintenance.
  • If an RV Operator does makes an AMP available to residents during the exemption period then the RV Operator must still ensure either during or after the exemption period that the independent assessment required by clause 26C(1) be conducted and provided to residents.

Retirement Village Operators should keep the above dates in mind when considering the matters dealt with by the previous Ministerial Exemptions as well as for the new Ministerial Exemption related to Asset Management Plans.

If you have any questions about the Ministerial Exemptions or Asset Management Plans, please contact a member of our national Health, Aged Care and Retirement Villages team.

Authors

Arthur Koumoukelis | Partner | +61 2 8248 3437 | [email protected]

Lucinda Smith | Partner | +61 2 9020 5748 | [email protected]

Christopher Allen | Law Graduate