Facility Expenses

 

Computation and Payment of Levies

 

1. Levies to be fair.  Each Financial  Year, the Association will set the levies described in this rule 14 and rule 15. All levies must be set in a way that is fair and equitable to the Association and to all Members, including the Residential Members, the Commercial Members, and any category of Membership specified in rule 7.5, and any group(s) of Designated Members (as defined in rule 12.3.1). The levies for a Financial Year will be set taking into account the estimated Facility Expenses for the Financial Year and any contingency sums/special levies contemplated under rule 15.2.

2. Estimate of Facility Expenses. Prior to or as soon as practicable after the commencement of each Financial Year, the Association will set an annual levy and, by written notice, advise each Member of the Association's estimate ("Association's Estimate") of each Member's Proportion of the Facility Expenses for that Financial Year, plus any contingency sum or special levy as the Association, in its sole discretion, elects for that Financial Year.

3. Payment of Facility Expenses. Subject to rule 14.8, each Member will begin by the 20th  of the month following the date of the Association's invoice pay to the Association the Association's Estimate of the Member's Proportion of the Facility Expenses for the current Financial Year in the manner set by the Association.

4. Excluded Property. For the purposes of setting and collecting levies under this rule 14, rule 15 and, where applicable, rule 16:

   • The Association must not levy any "Excluded Property". For the purposes of calculating the payment of levies, an "Excluded Property" is defined as:

   • The earlier of the dates either the Developer notifies the Association that it may levy such Property from, or the date that is 15 months after the date the property meets the definition of Property, whichever date first occurs; or

   • While the Owner of the Property is the Principal Member.

5. Statement of Facility Expenses. Until Kensington Park is completed, then as soon  as practicable after the end of each Financial Year the Association will provide each Member with an itemised statement of the actual Facility Expenses for the just completed Financial Year or any period in terms of rule 14. 7.1, as the case may be, and:

   • If the Member's Proportion of the actual Facility Expenses for the previous Financial Year or any period is greater than the total of the monthly payments made by the Member under rule 14.3 or 14. 7.1.1, the Member will respond within one month of notification pay to the Association the difference, or;

   • If the Member's Proportion of the actual Facility Expenses for the previous Financial Year or any period is less than the total of the monthly payments made by the Member under rule 14.3 or 14.7.1.2, the Association  will credit the difference to the Association's Estimate for the then current Financial Year, or;

   • If on completion of Kensington Park the actual Facility Expenses in any financial year is greater or less than all the Member's Proportions the difference will be carried forward to the following financial year and reflected in the following year's Estimate of the Members' Proportions of the Facility Expenses.

6. Estimate not available. If the Association has failed to advise a Member of the Association's Estimate for the Financial Year before the  date  on  which  the  first  payment  is  due  under  rule 14.3, the Member will on that date and every other date on which a payment is due under rule 14.3 pay 1/12'h of the Association's Estimate applicable to the previous Financial Year. On the Association's Estimate for the Financial Year being advised to that Member:

   • Rule 14.3 will apply after that.

7. New Properties. Where in any Financial Year new Properties ("New Properties") become available:

   • The Association will, on any New Properties becoming available, levy the Owners of those Properties such proportion of the Association's Estimate of the Member's Proportion of the Facility Expenses for the balance of the current Financial Year. The Association may at its discretion, revise the Association's Estimate of each Member's Proportion of Facility Expenses. If on revision, of the Association's Estimate of each Member's Proportion of Facility Expenses, it is found that any Member's Proportion of Facility Expenses for the current Financial Year is:

     • greater than the total payment(s) made or due for the current Financial  Year, then the Member will within one month of written notification pay the Association the difference between the Member's Proportion of Facility Expenses and the revised Member's Proportion of Facility Expenses, or;

     • less than the total payment(s) made for the current Financial Year then the Association will credit the difference to the Association's Estimate for the succeeding Financial Year.

8. Charge against the Property. If a levy or any instalment of the Association's Estimate is in arrears, the defaulting Member may be required by the Association to pay a late charge including interest at the rate of 5% per annum above the Association's banker's overdraft as the Association may determine. That late charge (plus any reasonable handling costs) is to be a charge against the Member's Property to which the levy relates and will be added to that levy.

9. Personal Obligation. Levies are the personal and individual debt of the Member.  No diminution or abatement of levies is allowed for inconveniences arising from making of repairs or improvements to the Common Facilities. A Member is not exempted from liability for any levies through non-use of Common Facilities or otherwise.

10. Certificate of Indebtedness. The Association will, on the application of a Member, or any person authorised in writing by such Member, provide the Member or authorised person with a certificate of the indebtedness of the Member to the Association calculated to the date specified in the application. The statement will show:

    • the Association's Estimate of such Member's Proportion of Facility Expenses for the current Financial Year;

    • the manner and time of payment of the Association's Estimate;

      • payments made by the Member on account of Facility Expenses in the current Financial Year;

      • payments due from the Member on account of Facility Expenses in the current Financial Year and not paid by the Member; and

      • the amount of any Transfer Levy of the Member which is then recoverable or will be recoverable for a given sale price by the Association pursuant to rule 16;

      • any accumulated unpaid default interest;

      • Whether or not it has received notice that any proceedings are pending against the Association, and, in favour of any person dealing with that Member, the certificate will be conclusive evidence of the matters certified therein. The Member may only apply for a certificate of indebtedness once in any year and on each occasion that a Member transfers ownership of a Property.

    • Information for estimates during the Development Period. The Association will provide to a Member, within five (5) Working Days of receiving a request, a statement of the levies that are estimated to be or were payable by that Member under this rule 14. that:

      • comprises estimates, historical data or both;

      • is itemised in relation to the different Common Facilities and services provided in relation to Kensington Park;

      • contains a statement in relation to each of the Common Facilities and services as to whether the levy is fixed, variable or based on the Member's Proportion;

      • contains a statement as to which of the Common Facilities and services were, or are expected to be, provided in each Financial Year within the period;

      • contains a statement as to what stage of development Kensington Park is at, at the end of each Financial Year within the period;

      • contains, if a levy is based on the Member's Proportion, a statement of a formula by which the levy can be calculated together with a worked example; and

      • contains a statement of the principal assumptions on which any estimates are based.

 

Special and Differential Levies

 

 

 

1. Capital Improvements levy. At any special meeting of the  Association, the  Association may, from time to time, fix an additional levy to be paid by each Member together with the monthly instalments of the Association's Estimate for that Member, to be set aside as a  sinking fund to allow for and meet the costs of Capital Improvements.

2. Special Levies. At any special meeting of the Association, the Association may  make a  special levy, payable by any or each Member at such times as are set by the Association, as  the  Association considers necessary, including:

   • for it to meet its obligations under this Constitution;

   • where costs are incurred as a result of a Member's breach of any provisions of this Constitution provided that in the case of wilful or negligent damage caused by, or purposeful work undertaken at the request of, one or more but not all of the Members or their agents, contractors, employees, residents or invitees (not being maintenance or repair), then such cost will be at the sole expense  of  the  Member(s)  creating  the damage or requesting the work;

   • where circumstance and fairness dictate that particular costs should be otherwise allocated then such costs will be fairly allocated between the Members having the benefit thereof.

3. Levies for Designated Members. Where the  Association  has  made  a  determination  under  rule 12.3, the Association may in setting or fixing  any  annual levy or  special  levy, to  the  extent that the amount to be set or fixed relates to any  Designated  Facility,  calculate  the  amount  required from Members on the basis that only  Designated  Members  are  liable  to  contribute  to that levy and that Non-Designated Members are not required to contribute to that levy.

   • For the purposes of this rule 15.3, where any levy is set or fixed in relation to a  Designated Facility a Member's Proportion will  mean  that  proportion  which  the Occupied Internal Areas of the Property or Properties owned by a Designated Member bear to  the  sum  total of the  Occupied Internal Areas of all Properties owned  by all of the relevant Designated Members.

4. Levies for Shared Facilities.  Where the Association has made  a determination under rule 9.7,  the Association may set or fix  an  annual levy or special levy, to the extent that the amount to be   set or fixed relates to the upkeep and maintenance of the  Shared  Facility  and  calculate  the  amount required from the Members responsible for the upkeep and maintenance of that Shared Facility. For the purposes of this rule 15.4, where any levy is set or fixed in relation to a Shared Facility a Member's Proportion  will  be  determined  by  the  Association  having  regard  to ownership, registered interests and that proportion which the Occupied Internal Areas of  the  Property or Properties owned by a contributing Member bears to the sum total of the Occupied Internal Areas of all Properties owned by all of the contributing Members.

 

Transfer Levy

 

1. Transfer Levy. A Member may not sell, assign, gift, transfer or  otherwise  dispose  of  their  Property or any part or interest in the Property to any other person, firm or company unless such Member has first paid to the Association in cash  on  the  date of  settlement  or  on  such  other terms and conditions as the Association will agree on a levy equal to one per cent (1%) plus GST  of   the gross transaction value (the "Transfer Levy").

2. Assessing the Transfer Levy. The  term  "gross  transaction  value",  for  the  purposes  of  rule 16.1, means at the option of the Association the actual gross sale price received by the Member for each Property and improvements on each Property in money or money's worth or the market value of the Property and improvements to be determined by a registered public valuer agreed to by the Member and the Association and failing agreement by two valuers, one appointed by each party, and their umpire and otherwise in accordance with the Arbitration Act 1996 and its amendments.

3. Exceptions. Notwithstanding the above provisions of this Constitution, the Transfer Levy will  not be payable on any of the following transactions:

   • any transfer from the Principal Member;

   • inter Kensington Park transactions (namely where the Member is contemporaneously purchasing a replacement Property within Kensington Park);

   • inter-party transactions (that is to say, a transaction between Owners who are already joint tenants or tenants in common of a Property);

   • immediate family transactions (that is to say transactions between spouses or de facto partners or parents and their children);

   • estate planning transactions (that is to say transactions between an Owner and a trustee of an inter vivas trust settled by one or more of those Owners where the trust is substantially for the benefit of that Owner and their descendants);

   • the distribution of the Property in specie from the trustees of an inter vivos trust to a beneficiary of such inter vivas trust, provided that such beneficiary is a spouse, de facto partner, parent, child or other descendant of the settlor of such inter vivas trust;

   • the transmission of the Property on the death of an Owner to a trustee or executor and the subsequent transfer of the Property to the Owner's beneficiaries;

   • mortgages; or

   • leases for less than three (3) years.

4. Variations. Notwithstanding the above provisions of the Constitution and the amount stipulated in rule 16.1, the amount of the Transfer Levy may be varied by any of the following:

   • At any Special Meeting of the Association, the amount of the Transfer Levy may be varied with a resolution passed with a majority of 75% of those in attendance.

5. Transfer Levies used primarily for Capital Improvements only. Transfer Levies paid to the Association must be held by the Association in a separate account(s) and used primarily as a sinking fund for the Capital Improvements.

6. The Association may authorise the use of a portion of any money in the transfer levy account(s) to temporarily fund any short-term cash flow timing difference in the collection of the annual levy and payment of Facility Expenses.

7. If the Transfer Levy sinking fund reaches a level which the Committee considers is adequate to cover future foreseeable capital improvements, then any excess may be applied to cover a portion of the annual maintenance costs of the Common Facilities.