Are you ready for the 2025 AMP rules? Most villages aren’t

As of 1 September, NSW has enacted new rules to cover Asset Management Plans (AMP) for retirement village operators. In a move to ensure greater upcoming costs transparency for residents and government oversight alike, definitions of capital, stricter requirements for asset registers, condition ratings, and funding forecasts mean that many Providers may unintentionally be caught out. 

With legislation detailing “on the spot fines of up to $1,100 may apply for a breach of an asset management plan requirement”, the risk of non-compliance could be costly for many. Leveraging the expertise of experts in AMPs and the new changes, such as MDFM, can make all the difference to operators smoothly securing compliance.

Compliance and competitive edge

The legislation has passed without much fanfare and includes subtle changes, meaning that many operators and villages may be unprepared for the new requirements. The new requirements are a point of compliance under law, with the Act including, “offence provisions for operators who do not comply with the requirements related to asset management plans”.

However, for operators who position themselves to meet the requirements, not only is compliance secured but greater transparency for residents can lead to strategic strengths in the market.

1. What’s changing in 2025

“Major items of capital”

• The new Act maintains the previous definition of a major item of capital being an item of capital, including a shared item of capital, that an operator of a retirement village is responsible for.
• With a purchase price of $1000 or greater.

However it is in the strictness and comprehensive expectation of how every major item of capital is catalogued, and information gathered, that upcoming changes must be acknowledged by providers. 

Stricter requirements for asset registers, condition ratings, and funding forecasts

Underpinned by the definition of “major items of capital”, the asset register must clearly and completely list all items that fall within the operator’s responsibility. The asset register must also include information about the remaining effective life of items of capital.

All new and existing major items of capital must be listed in the asset register. Providers must include major items of capital that are shared across villages or even with other aged care businesses.

‘Condition’ wording vital change

The expectations and requirements of calculating remaining effective life of major items of capital now allows the operator to deviate from the prescribed ATO life expectancies. The condition-based assessment or rating of the item, if done by an operator, must be kept on-hand. The rating process and information must show the way in which the remaining effective life was calculated and be able to clearly demonstrate that the estimate is reasonable.

The introduction of the word ‘condition’ has been a welcome addition for clarity. The previous legislation and guidelines made no reference to the condition of an asset which should in fact be a key consideration when it comes to maintenance and replacement planning. Meeting this updated requirement will elevate providers to be in a position of greater insight, resulting in a more competitive position in the market and reputation yield from both residents and potential residents. 

The AMP must also include capital maintenance information for each major item of capital inclusive of estimated costs of maintenance. The forecast funding must be clear for each major item of capital, including the estimated date of replacement if relevant.

Updated timing

It is critical that providers pivot to plan and schedule resources to meet new AMP timing requirements. The capital maintenance report is now an annual forecast (as opposed to a 3 year forecast). 

The requirement is still to provide a forecast of maintenance costs for all items of capital. Additionally providers must identify assets with less than one year remaining life, or where repairs to the asset have exceeded 90% of the purchase price of the asset. Inclusive in the requirement for clarity in the AMP, a provider must also indicate whether they propose to replace or continue to maintain those assets. 

New focus on resident transparency and operator accountability

The new Act squarely places the impetus on operators to comprehensively document the costs of buying, maintaining, repairing and replacing any major items of capital.

The Act’s changes elevate the intention to secure transparency surrounding the maintenance and forecast costs of retirement village assets that residents pay the maintenance for.

Greater risk of non-compliance penalties and reputational damage

The Act displays no tolerance for any omissions when it comes to the listing and maintenance information of every major item of capital within the operator’s responsibility.

Through unannounced visits, or compliance checks, the Act makes the provisions for penalties of non-compliance to be issued to operators at A$1,100 per infraction. Any breach of an asset management plan requirement may be costly, both financially and reputationally for operators.

2. Why most villages aren’t ready

• Many providers are still relying on outdated Excel registers or incomplete data.
• Historical asset data is often inaccurate, missing, or inconsistent.
• Gaps such as the absence of Quantity Surveyor letters of assessment are common.
• Asset management can often be treated as a tick-box exercise rather than a strategic tool. With incoming changes under the new regulation this may be costly.

It is worthwhile for all providers to assess their readiness and reach out to experts such as MDFM to help prepare for the upcoming changes.

3. The 2022 AMP problem

Remembering the rapid but unhelpful pivot to the 2022 AMP is an important lesson in responding to regulatory change. Many operators rushed to prepare AMPs in 2022 to satisfy new requirements. However, providers must be looking to longevity of strategy when it comes to the AMP process. The 2022 plans often met the bare minimum at the time but weren’t designed to be maintained.

Today, those documents are commonly proving to be obsolete and unhelpful:

• They don’t reflect current assets or conditions.
• They’re not fit for new 2025 compliance standards.
• They provide little to no strategic or financial value.

MDFM: Leveraging experts

MDFM’s experience is in transforming outdated AMPs into living, working tools that not only satisfy the legislation but also drive smarter decisions, better budgeting, and improved resident outcomes.

Leveraging the expertise of MDFM may be the difference between worrying about compliance and securing strength with a competitive edge.

4. The risks of inaction

The risk of inaction and non-compliance are significant for providers:

• Financial: Unplanned failures (lifts, roofs, boilers) blow out budgets.
• Reputational: Residents expecting comprehensive and transparent evidence of planning and accountability.
• Operational: Accreditation and audits may expose shortfalls.

While full compliance requires understanding the nuances of the upcoming changes, and responding precisely, providers are able to act now, and access support, to be in the best position.

5. Opportunities for leaders

Villages that act now can:

• Strengthen capital works planning with credible data.
• Boost resident trust and satisfaction through transparent reporting.
• Provide boards and executives with clear, actionable insights.
• Lower costs over time via proactive lifecycle management.

6. The time to act is now

Providers must start reviewing and upgrading AMPs immediately.

A core difference that will separate providers, is working with specialists who understand the compliance detail and the strategic value.

Save the time and money of costly updates that don’t meet the new AMP regulations, and leverage the expertise of MDFM to do the updates quickly and accurately, first go.

MDFM can bridge the gap — ensuring plans meet 2025 requirements, while also becoming a practical, high-value tool for management and boards.