Refurbishment & Improvements Fund
Residents have previously aired concerns about where the money will come from for the upkeep of the village. Some have had earlier experience in 'strata title' complexes and others have heard stories about residents having to find the money to modernise and refurbish residential complexes. We do not believe these worries are valid in our village. Our village has the 'Refurbishment & Improvements Contribution' fund with a recurring income stream from sales, so there is limited recourse to Residents.
The issue of sufficiency was explored with Management in the years 2004-2007. From experience in their other villages, some over 20 years old, there had never been any problem with sufficiency. On the contrary, the problem they found was one of how to spend a surfeit of funds that builds up over time.
Our Committee and Management continually critically appraise the refurbishment needs of the village. Together we work out a prudent regime of refurbishments and/or improvements for the coming year. This incorporates a view on the ability of the fund to finance the resulting works programme. The Advisory Board then decides what to approve, and in some cases, to be sure its what Residents want, a proposal will be put to a Residents General Meeting for approval. This is what occurred recently when Residents voted to extend and redevelop the bowling green, which was completed in November 2011 at a cost of A$110,000.
The issue of sufficiency was explored with Management in the years 2004-2007. From experience in their other villages, some over 20 years old, there had never been any problem with sufficiency. On the contrary, the problem they found was one of how to spend a surfeit of funds that builds up over time.
Our Committee and Management continually critically appraise the refurbishment needs of the village. Together we work out a prudent regime of refurbishments and/or improvements for the coming year. This incorporates a view on the ability of the fund to finance the resulting works programme. The Advisory Board then decides what to approve, and in some cases, to be sure its what Residents want, a proposal will be put to a Residents General Meeting for approval. This is what occurred recently when Residents voted to extend and redevelop the bowling green, which was completed in November 2011 at a cost of A$110,000.
Access to the Fund
The Manager controls access to this fund. The money is held on trust in an interest-bearing bank account. Residents cannot access this fund, however we can make recommendations on how it might be spent and when by passing a resolution by a simple majority at a Residents General Meeting. Either the Advisory Board or the Developer at their discretion authorise how and when these funds are spent.
Where the money comes from
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The Refurbishment and Improvements Contribution is a fund derived from the proceeds of villa sales. At clause 3.8 the Deed states that "Either the Developer or the Advisory Board may authorise the refurbishment, modernisation, extension, variation or reduction of the Village with the cost of such works to be paid from the Fund."
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 SPENDING GUIDELINES |
Schedule 6 of the Deed, states that "On settlement of the resale of your Estate you must pay the Refurbishment and improvements Contribution being an amount equal to 0.5% (or some other percentage as may be determined under Clause 20.12) of the Estate Sale Price multiplied by the number of days that you have been entitled to occupy the Villa up to a maximum of 3,650 days and then divided by 365. The Refurbishment and Improvements Contribution amount shall not, however, in any case exceed 5% of the Estate Sale Price", excepting any increase in accord with clause 20.12. So, the contribution increases all the while that a villa remains unsold, even if the villa sale price decreases. The rate of sales is the factor that determines how fast the fund builds up. The sales rate had been slow during the aftermath of the Global Financial Crisis, but appears to be increasing now.
If the Refurbishment works would cost more money than is available, this fund can also be topped up in accordance with clause 3.8 of the Deed. "If the balance of the Fund is insufficient to pay this cost, and additional monies are required in order to complete these works, the Developer may (at its sole discretion) elect to advance these additional monies to the Fund. Any additional monies so advanced under this clause plus interest chargeable at the rate then charged by our bankers on overdraft current accounts over $100,000.00 shall be repaid to the Developer from future payments to the Fund as and when these are received.
In the event that the Residents seek to do additional works where the balance of the Fund is insufficient to pay this cost and the Developer elects not to advance the additional monies to the Fund, the Residents’ approval for these additional works must be obtained in the form of a resolution passed by 75% of Residents entitled to vote in a meeting of the Residents in accordance with Clause 17.
Where the approval of the Residents is so obtained, the additional monies must be paid by the proprietor of each Estate in equal proportions. But:
(a) details of the work to be done and an estimate of its cost must accompany the notice of the Residents’ general meeting; and
(b) before these works are commenced, the Advisory Board must be satisfied that the necessary additional funds have either been raised or are available to pay for the works."
To avoid any further contribution from Residents under this provision, it is the view of the Residents' Committee that Residents should never request works for which there are insufficient funds.