SUMMARY OF PROVISIONS

SUMMARY OF PROVISIONS 1 INTRODUCTION 1.1 Policies and Guidelines 1.2 Schedules to the Agreement 1.3 Scope of Agreement 1.4 The Charge 1.5 Ownership and Use of Premises 1.6 Compliance with Laws FINANCE 2.1 Rent Determination Method 2.2 Organisation Funding and Outgoings 2.3 Capital Contribution 2.4 Recovery of Amounts Due To SACHA 2.5 Insurance 2.6 Investment of Surplus Funds 2.7 Financial Management TENANCY MANAGEMENT 3.1 Tenant Eligibility Criteria 3.2 Tenant Selection Procedure 3.3 Management of Applications for Housing 3.4 Public Information Protocols COMMUNITY HOUSING ORGANISATION MANAGEMENT 4.1 Arrears 4.2 Education and Training 4.3 Engagement of Service Providers PROPERTY MANAGEMENT 5.1 Construction and Purchase of Premises 5.2 Funding of Premises 5.3 Goods and Services Tax 5.4 Discharging the Charge 5.5 Sale of Premises 5.6 Maintenance 5.7 Vacancies REPORTS 6.1 Data Collection 6.2 Audited Financial Statements 6.3 Maintenance Plan 6.4 Budget 6.5 Capital Contribution Statement 6.6 Notification of Authorised Person GENERAL 7.1 Breach of Agreement 7.2 Hardship 7.3 Review of the Agreement 7.4 Variation of the Agreement 7.5 Termination of Agreement 6 6 6 7 7 7 7 8 8 8 9 9 10 10 10 12 12 12 12 12 13 13 13 13 14 14 14 15 15 16 17 18 19 19 19 19 20 20 20 21 21 21 21 21 22 2 3 4 5 6 7 1 SCHEDULE A SUMMARY OF ELIGIBILITY POLICY FOR COMMUNITY HOUSING SCHEDULE B SUMMARY OF RENT POLICY FOR COMMUNITY HOUSING SCHEDULE C CHO FUNDING SUMMARY SCHEDULE D CHO REPORTING REQUIREMENTS SCHEDULE E MANDATORY BY-LAWS SCHEDULE F SUMMARY OF MAINTENANCE POLICY FOR COMMUNITY HOUSING SCHEDULE G SUMMARY OF VACANT PROPERTIES POLICY FOR COMMUNITY HOUSING 23 25 27 28 29 30 31 SCHEDULE H 32 SUMMARY OF MANAGEMENT OF HOUSING APPLICATIONS POLICY FOR COMMUNITY HOUSING 2 Definitions "Act" means the South Australian Co-operative and Community Housing Act, 1991. “Agreement” means this Agreement and includes any schedules attached to it. “Annual Report” means the report of the Organisation’s activities including audited financial statements made by the Organisation annually. “Authorised Person” means a member of the Organisation who has been authorised by the Organisation to act in certain matters on behalf of the Organisation. “Budget” means the estimated expenditure against the estimated income of the Organisation for the succeeding financial year. “Capital Contribution” means the residual amount from rent receivable once the Organisation has deducted the three components of funding outlined in clause 2.2.2. “Capital Contribution Statement” means the summary report on actual rent received, arrears in rent, actions taken to recover arrears and capital components payable to SACHA submitted by the Organisation monthly. "Capital Value" means the value determined in accordance with the Act. "Charge" means a charge imposed by SACHA in accordance with the Act. “CHO” means community housing organisation. "Community Housing Sector" means all community housing and related organisations. "CPI" means the "Consumer Price Index: All Groups Index Number: Weighted average of eight capital cities" published for Interest Periods ending on the last day of December, March, June and September in each year, by the Australian Bureau of Statistics. "Current Market Value" has the meaning ascribed to it in the Act. “Data Collection” means the report on household incomes, demographics, composition, sources of income, vacancies, rents, waiting list management and such other things as determined by SACHA from time to time and provided by the Organisation annually. "Eligible Applicant" means a person who meets the requirements of Clause 3.1 and Schedule A,. "Fund" means the Community Housing Development Fund established under the South Australian Co-operative and Community Housing Act, 1991. “Gazette” means the South Australian Government Gazette or the Commonwealth Government Gazette as the context requires. 3 “GST” means the Goods and Services Tax. “GST Act” means the Goods and Services Tax Act 1999 or any related Act imposing or administering GST. “Input Tax Credit” has the same meaning as it does in Section 195-1 of the GST Act. “Maintenance Fund Bank Account” means the account to be established under clause 2.2.4. “Maintenance Plan” means the assessment of the state of repair of the Organisation’s properties and maintenance liability to be borne by the Organisation for those properties over time. “Materially Alter” means alterations or additions to the structure or fabric of the Premises. "Organisation" means the registered housing association or registered housing cooperative specified in the preamble to this Agreement. “Outgoings” includes administration, insurance and vacancy costs, rates, taxes, maintenance, water supply charges, arrears of rent and any other expenses. “Parties” means SACHA and the Organisation, and Party means either of them. “Peak Body” means the representative body for community housing organisations in South Australia – the Community Housing Council of South Australia, and includes its successors or permitted assigns. "Policies and Guidelines" means documents prescribing arrangements for Organisations covered by this Agreement, published under Clause 1.1, including administrative arrangements and development arrangements which may be amended from time to time by SACHA in accordance with clause 1.1 and clause 7.4 which at the time of this Agreement are summarised in the schedules to this Agreement. "Previous agreement" means the agreement which was in force between SACHA and the Organisation immediately before the commencement of this new Agreement (if a preceding agreement had been entered into). “Premises” means land, buildings and materials used in building construction. "SACHA" means the South Australian Community Housing Authority. 4 Preamble This is an agreement between ………………………………………………………….. Inc. and the South Australian Community Housing Authority (herein after referred to as SACHA) ("the Parties"), pursuant to Section 64(1) of the Act and clause 7 of Schedule 1 to the Act as appropriate. WHEREAS A1 The Organisation is established principally for the purpose of providing housing for people, especially for those in financial or other forms of need (Housing Association). or A2 The Organisation is established principally for the purpose of providing housing for its members, especially for those in financial or other forms of need (Housing Cooperative). In a spirit of partnership SACHA supports the objects of the Organisation and wishes to provide financial and other assistance to the Organisation to enable it to achieve those objects. To achieve those objects the Organisation intends to purchase, construct or lease Premises and let such Premises to its Eligible Applicants. B. C. 5 THE PARTIES AGREE AS FOLLOWS 1 INTRODUCTION 1.1 Policies and Guidelines 1.1.1 SACHA will from time to time establish and publish Policies and Guidelines to assist Organisations in the administration of the arrangements reflected in this Agreement. As at the date of this Agreement the current key SACHA Policies and Guidelines are as summarised in the Schedules of this Agreement. The Organisation will abide by the Policies and Guidelines. From time to time SACHA may, at its discretion, make variations to or implement new Policies and Guidelines provided that where changes are made to Policies and Guidelines, SACHA will: a) advise the Community Housing Sector prior to any change; b) consult with the Community Housing Sector around negotiable aspects of the change; c) assist the Community Housing Sector in implementing such changes; and d) update the Schedules to this Agreement where necessary. Where Organisations wish to initiate changes to Policies and Guidelines: a) Organisations must put their request in writing to SACHA; b) Organisations should consider raising their proposals through their Peak Body; c) SACHA at its sole discretion may assess the merits of proposed changes against impacts on both government and the Community Housing Sector as a whole; d) SACHA will conduct any such reviews in consultation with the Organisation or Community Housing Sector as appropriate; and e) SACHA may at its sole discretion implement all or any part of any proposal put forward by the Peak Body or Organisation. 1.1.2 1.1.3 1.1.4 1.1.5 1.2 Schedules to the Agreement 1.2.1 SACHA may, at its discretion, at any time during the term of this Agreement, vary, consolidate or replace any of the schedules attached to this Agreement and any such variation, consolidation or replacement will form part of this Agreement, provided that SACHA must notify the Organisation and provide the Organisation with a copy of the varied, consolidated or replacement schedule as soon as practicable after such variation, consolidation or replacement has occurred. 6 1.3 Scope of Agreement 1.3.1 The Agreement will apply for all Premises acquired, leased, developed or improved using, wholly or partly, funds provided by SACHA, and to monies derived from such Premises. This Agreement replaces any Previous Agreement and all terms and conditions stipulated will apply to funded properties as outlined in clause 1.3.1 above. 1.3.2 1.4 The Charge 1.4.1 SACHA will impose a Charge to secure the enforcement of this Agreement over all real property in connection with which SACHA has lent, provided or expended money or any real property which SACHA has acquired, developed or improved for the benefit of the Organisation as contemplated by this Agreement. 1.5 Ownership and Use of Premises 1.5.1 1.5.2 The Organisation will hold in the name of the Organisation all Premises acquired or leased by it pursuant to the rules of the Organisation. The Organisation will use any Premises acquired under this Agreement, and subject to a Charge under the Act, for the purpose of providing residential Premises. This arrangement may be varied by agreement with SACHA. The Organisation shall house only Eligible Applicants (as per clause 3.1 and Schedule A). 1.5.3 1.6 Compliance with Laws 1.6.1 The Organisation must comply will all relevant laws in carrying out its obligations under this Agreement including but not limited to the: a) Residential Tenancies Act; b) Occupational Health, Safety and Welfare Act c) Goods and Services Tax Act; and d) All other relevant legislation. 7 2 FINANCE 2.1 Rent Determination Method 2.1.1 The Organisation will calculate rent for each residential Premises of the Organisation as either: a) An income based rent, or b) The maximum property rent as determined in accordance with SACHA’s Rent Policy as summarised in Schedule B. The lower of these calculations will apply. 2.1.2 2.1.3 The Organisation must abide by SACHA’s Rent Policy. SACHA’s Rent Policy (including the rent determination method) may be varied from time to time in accordance with changes in State or Federal Government policy on community housing rents and in accordance with clause 1.1. Rental income will be applied towards the purposes specified in this Agreement, unless otherwise agreed between the Parties. 2.1.4 2.2 Organisation Funding and Outgoings 2.2.1 2.2.2 The Organisation will be responsible for all Outgoings for Premises acquired pursuant to this Agreement. The Organisation will be funded for its operational costs by retaining a proportion of rental income as follows: a) Property allowance b) Administration allowance c) Maintenance allowance. Schedule C outlines the method for determining the amount of each of these allowances. The sum of these allowances comprises total funding retained by the Organisation. 2.2.3 2.2.4 The Organisation must bank funding retained as property and administration allowances in a general operating bank account. The Organisation must establish a Maintenance Fund Bank Account or similar provision and the maintenance allowance must be banked into that account, or accounted for separately. In the case of vacant Premises, the Organisation will not be eligible for funding as outlined above in clause 2.2.2 for that property during the period of vacancy. If the sum of the Organisation’s funding exceeds total rent payable by tenants for any given month, the Organisation may invoice SACHA for this shortfall. These subsidies will apply until the review date shown in Schedule C. 2.2.5 2.2.6 8 2.2.7 The Organisation must not use income derived from any Premises acquired by the Organisation, in whole or in part from funds provided by SACHA, for any purpose except those allowed by this Agreement. SACHA may make a loan or loans to the Organisation if the Organisation does not have sufficient funds to pay outgoings. The loan will be on such terms as agreed between the Parties which may be varied by agreement. 2.2.8 2.3 Capital Contribution 2.3.1 2.3.2 Capital Contribution will be paid by the Organisation to SACHA in respect of each property over which a Charge under the Act is in force. The due date for payment of a Capital Contribution shall be in accordance with Schedule D. The Organisation will forward a Capital Contribution Statement to SACHA in accordance with reporting requirements specified in Schedule D. Payment of a Capital Contribution for any Premises acquired by the Organisation will become due on the first day of the month following the date when the Premises are first available for letting. If the Organisation fails to provide the Capital Contribution Statement required under this clause by the due date then SACHA may: a) require the Organisation to explain the delay; b) arrange the preparation of the statement at the Organisation's expense; c) invoice the Organisation for any amounts due: or d) recover by any monies due as a debt to SACHA. In the case of vacant Premises, the Organisation will not be liable for Capital Contribution payments to SACHA for that property during the period of vacancy. 2.3.3 2.3.4 2.3.5 2.4 Recovery of Amounts Due To SACHA 2.4.1 If the Organisation fails to make any payment due to SACHA on the due date for such payment, then SACHA may recover the amount owing as a debt to SACHA. SACHA may at its discretion charge interest on any outstanding amount. In deciding whether to charge interest SACHA will have regard to any extenuating circumstances affecting the Organisation's ability to pay by the due date. Interest on outstanding amounts may be charged on a daily basis and will be added monthly to the debt due. Unless otherwise agreed in writing the rate will be 1% per month for the first three months for which the amount is outstanding increasing to 2% per month thereafter. In addition to any interest charged under clause 2.4.2, SACHA may at its discretion impose a recovery fee on any amount outstanding. 2.4.2 2.4.3 2.4.4 9 2.5 Insurance 2.5.1 SACHA will arrange insurance on behalf of all community housing Organisations. This may include (but may not be limited to): ♦ ♦ ♦ ♦ ♦ ♦ Industrial Special Risks Public Liability Associations Liability Fidelity Guarantee Group Personal Accident – Volunteer General Property and will be subject to the approval of SACHA. The Organisation will repay any premiums, brokerage and prescribed fees incurred by SACHA on its behalf on terms decided by SACHA. 2.5.2 2.5.3 Any amount owing to SACHA under clause 2.5.1 not paid within thirty days of a request by SACHA for payment will be treated as a debt due to SACHA. Insurance arrangements Organisation in writing. may be varied by SACHA notifying the 2.6 Investment of Surplus Funds 2.6.1 The Organisation must invest all monies derived from allowances under this Agreement and not immediately required by the Organisation in investments in: (a) bank deposits/bank guaranteed bills; (b) securities guaranteed by the Treasurer of South Australia; (c) deposits in credit unions and/or building societies regulated by the Australian Financial Institutions Commission; or (d) other investments agreed between the Organisation and SACHA. 2.7 Financial Management 2.7.1 SACHA will publish Rent and Finance manuals and provide them to the Organisation to assist the Organisation in maintaining its accounts and preparing financial statements. The Organisation will submit an annual audited balance sheet and an income and expenditure statement to SACHA, which meet the approved accounting standards prepared and published by SACHA under the Act. The audited financial statements and returns will be submitted by the due date specified in Schedule D following the relevant financial year, unless otherwise agreed between the Parties. Submission of the financial statements must not be delayed by a requirement that they are to be laid before the Organisation at its Annual General Meeting. 2.7.2 2.7.3 10 2.7.4 If the Organisation fails to provide any of the statements required under this clause by the due date then SACHA may: (a) arrange the preparation of the statements at the Organisation's expense; (b) arrange the preparation of audits at the Organisation's expense; (c) invoice the Organisation for any amounts due; and (d) recover any monies due under subclause (a) (b) or (c) as a debt to SACHA. The accounts of the Organisation must be kept and audited to a standard and in accordance with practices required under the Act and SACHA’s published guidelines. The Organisation must submit a Budget each year to SACHA by the due date specified in Schedule D. The Budget will contain projections of the income and expenditure of the Organisation for the financial year concerned, in accordance with guidelines agreed by the Parties. 2.7.5 2.7.6 2.7.7 11 3 TENANCY MANAGEMENT 3.1 Tenant Eligibility Criteria 3.1.1 Except in circumstances approved from time to time by SACHA, the Organisation will not accept any person for tenancy who does not fulfil the criteria of the State or Federal Government policy on tenant eligibility for community housing as specified in Schedule A. Schedule A may be varied by Notice of Gazettal from time to time in accordance with changes in State or Federal Government policy on tenant eligibility for community housing. The Organisation will be promptly notified in writing of variations to the State or Federal Government policy on tenant eligibility for community housing as expressed in Schedule A. The Organisation may develop its own specific tenant eligibility criteria in addition to Government criteria specified in Schedule A and will notify SACHA in writing of its criteria through its mandatory by-law in accordance with Schedule E. 3.1.2 3.1.3 3.1.4 3.2 Tenant Selection Procedure 3.2.1 The Organisation will establish a written tenant selection procedure that will be submitted to SACHA for approval. The agreed procedure will be authorised by a suitable by-law passed by the Organisation in accordance with Schedule E. Any subsequent variation to the procedure will need to be agreed by SACHA. 3.3 Management of Applications for Housing 3.3.1 The Organisation must comply with the Management of Applications for Housing policy as summarised in Schedule H. 3.4 Public Information Protocols 3.4.1 In addition to any requirements under the Act, the Organisation must make available to the public, in writing and on request without charge, its Tenant Selection Procedure, its Appeals Procedure and, if applicable, its Membership Selection Procedure in accordance with Schedule E. 12 4 COMMUNITY HOUSING ORGANISATION MANAGEMENT 4.1 Arrears 4.1.1 The Organisation must pass and retain a suitable by-law setting out the processes to be used when any tenant is in arrears with rent in accordance with Schedule E. The by-law required under clause 4.1.1 must be submitted to SACHA for approval and will come into effect when the Organisation has received written notification of SACHA’s approval. 4.1.2 4.2 Education and Training 4.2.1 4.2.2 The Organisation and its officer bearers must maintain a level of skills adequate to ensure efficient management of its affairs. To enable the Organisation to maintain an adequate level of skills, SACHA will develop an education training strategy and facilitate training opportunities in response to sector demand. 4.3 Engagement of Service Providers 4.3.1 The Organisation will be responsible for the development of a written agreement with any Organisation or person from whom management or administrative services are purchased. 13 5 PROPERTY MANAGEMENT 5.1 Construction and Purchase of Premises 5.1.1 5.1.2 5.1.3 Any contract to lease, construct or acquire Premises will be made subject to the approval of SACHA. The Organisation will notify SACHA annually in writing of the name of any person who is authorised to enter into real estate transactions on its behalf. Premises purchased or constructed wholly or in part with SACHA funds must conform to minimum standards as determined from time to time by SACHA but will not be less than those required by Federal, State and Local Government building codes. The Organisation must be provided with a copy of any relevant reports prepared in connection with purchase, construction or upgrade of any Premises. The Organisation will not Materially Alter or demolish any Premises subject to this Agreement without SACHA's approval. Any alterations must comply with a standard determined or approved by SACHA. 5.1.4 5.1.5 5.2 Funding of Premises 5.2.1 SACHA may provide funding to the Organisation for the purpose of the acquisition of Premises. Any funding to the Organisation will be made by SACHA upon such terms, and subject to the satisfaction of such conditions, as agreed in writing between the Parties. In the absence of written agreement the provision of such funding will be at the discretion of SACHA. SACHA may require the Organisation to issue a debenture, or series of debentures, incorporating the terms on which any funding is provided by SACHA to the Organisation. The Organisation hereby indemnifies SACHA against all liability or loss arising from, and any cost, charges or expenses incurred in connection with: (a) any funding or any amount payable under any debenture issued by the Organisation to SACHA not being paid on the due date for payment thereof, or being irrecoverable from the Organisation for any reason whatsoever; or (b) any guarantee, indemnity or obligation given or assumed by SACHA to any third party in connection with the transfer or assignment (at law or equity) of SACHA's interest in any debenture or series of debentures issued to SACHA; AND for the avoidance of doubt the Organisation hereby acknowledges and agrees that: (c) the payment by the Organisation of any amount due under this indemnity 14 5.2.2 5.2.3 (d) (e) will be secured by the Charge; and the indemnity of the Organisation is an absolute, unconditional and irrevocable obligation and is not subject to any counterclaim, set-off, deduction, diminution, abatement, recoupment, reduction or defence based upon any claim the Organisation may have against SACHA or any other party; and other than full performance of the Organisation's obligations under this Agreement the obligations of the Organisation under this indemnity are not effected by anything which might otherwise have that affect at law. 5.3 Good and Services Tax 5.3.1 Where: (a) The Organisation is entitled to an Input Tax Credit for the acquisition of premises; and (b) SACHA has made a loan under clause 5.2 of this Agreement which relates to the premises, the Organisation must pay to SACHA the amount of that Input Tax Credit within seven (7) days of the Organisation becoming entitled to a refund under Division 35 of the GST Act (whether or not the refund is more or less than the Input Tax Credit). 5.3.2 Where a change in creditable purpose occurs under Division 129 of the GST Act in relation to the acquired premises, SACHA must refund to the Organisation any adjusted Input Tax Credits repayable by the Organisation to the Australian Taxation Office. 5.4 Discharging the Charge 5.4.1 The amount payable to discharge the Charge is unless otherwise determined by SACHA as specified in clause 5.4.3 or 5.4.4. (a) the Current Market Value of the premises, established by a licensed valuer; (b) any other amount required to discharge any debenture or debentures issued which relate to the Premises over which the Charge is to be discharged; (c) any other amounts which are due to SACHA determined at its discretion; and (d) less any amounts already paid on account of investment shares for the premises (valued according to the statutory price that applies at that time in relation to those shares). SACHA will bear the cost of the valuation under clause 5.4.1. Where investment shares have been issued for any premises subject to a Charge under this Agreement, the Charge may be paid out in the manner prescribed under Section 68 of the Act. The amount payable in terms of Section 68 is the amount specified in clause 5.4.1 above or such lesser amount as SACHA may determine in its absolute discretion. 5.4.2 5.4.3 15 5.4.4 In cases where no investment shares have been issued or where investment shares have been issued but the conditions of Section 68 of the Act are not satisfied, the Charge may be paid out by the Organisation paying to SACHA the amount specified in clause 5.4.1 above, or such lesser amount as SACHA may at its absolute discretion determine. The Capital Contribution paid for the Premises will not be deducted from the amount payable to discharge the Charge under this clause. In the event of a dispute over the Current Market Value of the Premises, the matter may be referred by the Organisation to the Appeals process established under the Act. Each Party will bear its own costs for valuations in the event of an appeal. In the event that:(a) the Organisation has deposited in the Fund monies which are in excess of all monies owing to SACHA for the Premises which is the subject of the Charge to be discharged; and (b) any debenture that has not fallen due for payment and cannot be redeemed on the date of discharge of the Charge; then the Organisation hereby irrevocably authorises and directs SACHA to hold such monies referred to in clause 5.4.8 (a) to the extent of the amount required to redeem such debenture on its maturity and to pay on behalf of the Organisation to the holder for the time being of any such debenture the amount required to redeem the debenture. 5.4.5 5.4.6 5.4.7 5.4.8 5.4.9 The Organisation irrevocably authorises SACHA to apply any credit balance standing to any account of the Organisation with SACHA (including any subaccount of the Fund) in or towards satisfaction of any sum payable by the Organisation under this Agreement or any debenture to SACHA and the Organisation irrevocably authorises SACHA to do all things necessary or expedient for such purpose. 5.5 Sale of Premises 5.5.1 The Organisation must not sell, mortgage, transfer, assign or otherwise deal with any Premises which are subject to a statutory Charge under the Act, without the consent of SACHA which consent will not be unreasonably withheld. Any monies obtained by the Organisation from dealing with the Premises will be paid to the Fund or by mutual agreement may be applied to the purchase of a replacement Premises or to such other capital purposes as may be agreed between the Parties. The Organisation will authorise the other Party to the dealing to pay any such money to the Fund at the time of settlement, unless otherwise agreed between the Organisation and SACHA. 5.5.2 5.5.3 16 5.5.4 Provided such monies are paid to the Fund at the time of settlement, and are equal to or exceeds the amount payable to discharge the Charge as set out in clause 5.4, SACHA will arrange to discharge the Charge for the Premises. The Capital Contribution paid for the Premises will not be deducted from the amount payable to discharge the Charge under this clause. 5.5.5 5.6 Maintenance 5.6.1 The Organisation must be responsible for maintenance of its Premises, and must at all times keep its Premises in good and tenantable condition, including gardens, boundary walls, fences and drains and other pipes belonging to such Premises. The Organisation will abide by SACHA’s Maintenance Policy as summarised in Schedule F. The Organisation must meet the cost of maintenance from its Maintenance Allowance. The Organisation must make payments of the Maintenance Allowance to its Maintenance Fund Bank Account established for that purpose as specified in clause 2.2.4. All interest earned on the Maintenance Bank Account will be deemed to form part of the Maintenance Fund Bank Account. All Maintenance Fund Bank Account monies must be invested in the manner described in clauses 2.2.4 and 2.6.1. The Organisation will draw funds from the Maintenance Bank Account to meet the maintenance costs of its Premises. Those funds may only be applied for the purpose of maintenance expenditure. The Organisation will develop a fully costed Maintenance Plan in a form consistent with SACHA’s Maintenance Policy. The Maintenance Plan must be submitted to SACHA for approval. 5.6.2 5.6.3 5.6.4 5.6.5 5.6.6 5.6.7 5.6.8 5.6.9 5.6.10 The approved Maintenance Plan will be reviewed from time to time as agreed between the Parties. 5.6.11 Updates of the approved Maintenance Plan must be submitted to SACHA annually in accordance with Schedule D. 17 5.7 Vacancies 5.7.1 5.7.2 The Organisation will abide by SACHA’s Vacant Properties Policy as summarised in Schedule G. In the case of short-term vacancies, the Organisation will furnish SACHA with a report advising of the vacancy, the cause of the vacancy and what action the Organisation intends to take to fill the vacancy or dispose of the Premises. In the case of long-term vacancies, the Organisation will require SACHA’s written approval. If approval is not granted, SACHA may require the return of the property to SACHA. 5.7.3 18 6 REPORTS 6.1 Data Collection 6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 The Organisation will submit information relating to household characteristics for all tenants to SACHA in a form approved by SACHA. The Organisation will not be required to provide the name of any tenant in submitting the above form required under clause 6.1.1. SACHA will provide pro-formas and other information required to enable the Organisation to submit the above return. The form must be submitted each year by the due date specified in Schedule H and must refer to the position at the end of the previous June. The reporting requirements specified in Schedule D may be varied by SACHA notifying the Organisation in writing. The material collected will be managed in accordance with relevant government and confidentiality practices. 6.2 Audited Financial Statements 6.2.1 6.2.2 6.2.3 The Organisation must submit annual audited financial statements to SACHA. The report will be submitted each year by the due date specified in Schedule D and will refer to the position at the end of the previous June. If the Organisation prepares Annual Reports which include audited financial statements it may choose to forward those documents to SACHA. 6.3 Maintenance Plan 6.3.1 6.3.2 The Organisation will submit a Maintenance Plan as outlined in clause 5.6 to SACHA for approval. The Organisation will submit an annual update of its approved Maintenance Plan to SACHA in accordance with Schedule D. 19 6.4 Budget 6.4.1 The Organisation will submit a projected income and expenditure Budget for the operation of the Organisation on an annual basis in accordance with Schedule D. 6.5 Capital Contribution Statement 6.5.1 The Organisation will submit a statement of the required Capital Contribution for the month previous to the statement in accordance with Schedule D. 6.6 Notification of Authorised Person 6.6.1 The Organisation will notify SACHA in writing of the name of any person or persons authorised by the Organisation to enter into real estate transactions on its behalf as per clause 5.1.2. Notification to SACHA under clause 6.6.1 shall be done in accordance with Schedule D. 6.6.2 20 7 GENERAL 7.1 Breach of Agreement 7.1.1 If a Party breaches this Agreement, any costs or expenses incurred by the other Party to the Agreement as a result of the breach are recoverable by that other Party from the Party in breach. Without derogating from the operation of clause 7.1.1 (a) if costs for expenses are recoverable by SACHA and a Charge exists over any of the Organisation's Premises, those costs or expenses will be taken to form part of the monies secured by that Charge; and (b) if costs or expenses are recoverable by the Organisation, the Organisation may set off those costs or expenses against monies owed by the Organisation to SACHA other than monies owed by the Organisation under any Debenture. 7.1.2 7.2 Hardship 7.2.1 Where in SACHA's opinion the Organisation suffers undue hardship due to excessive costs which are incurred beyond its control, an adjustment to the rate of the Capital Contribution under clause 2.3 may be made by the Organisation to reduce its costs to a reasonable level. The adjustment will be subject to SACHA’s prior written approval following written application by the Organisation and will have effect for the period of time determined by SACHA. 7.3 Review of the Agreement 7.3.1 This Agreement must be reviewed by the Parties at least every 10 years during its continuance. 7.4 Variation of the Agreement 7.4.1 7.4.2 7.4.3 This Agreement may be varied following negotiation between the Parties and such variation must be in writing and signed by the Parties. All Schedules to the Agreement, except Schedule A, may be altered by SACHA as specified in clauses 1.1. and 1.2. Schedules to the Agreement may be altered by notice as per 1.2.1 and/or by notice in the relevant Government Gazette. SACHA will give notice in writing to the Organisation of the alteration and enclose an amended version of the Schedule and/or Gazettal notice. 21 7.5 Termination of Agreement 7.5.1 This Agreement may be terminated as follows: (a) by mutual agreement, or (b) when the Charges for all Premises owned by the Organisation have been discharged. 22 SCHEDULE A SUMMARY OF APPLICANT ELIGIBILITY POLICY FOR COMMUNITY HOUSING In order to be eligible for community housing, applicants must meet the: 1. Base Eligibility criteria; and 2. CHO Eligibility criteria for the Community Housing Organisation (CHO) with which the applicant is applying to be housed. Base Eligibility The Base eligibility criteria has 4 tests. These are: 1. General eligibility test 2. Income eligibility test 3. Asset eligibility test 4. Needs eligibility test To pass the Base Eligibility criteria, applicants must pass either: • The General, Income and Assets tests; or • If they fail one of the above tests, they must pass the Needs tests. The General eligibility test To pass this test, applicants must: • Be current residents of South Australia; and • Not own residential property; and • Receive an independent income; and • Be able to show proof of income and proof of identification. The Income Eligibility test To pass this test an applicant must not have an income which is above the current income limit which applies to their household type. Current income limits are shown in SACHA’s Tenant Eligibility Policy. The Asset Eligibility test To pass this test an applicant must not have assets which are valued above the current asset limit which applies to their household type. Current asset limits are shown in SACHA’s Tenant Eligibility Policy. The Needs Eligibility test An applicant must pass this test if: • They have not passed either the General, Income or Assets test; or • They have passed the above tests, but they have urgent need for housing and need to be housed before other applicants. 23 To pass the Needs Eligibility test an applicant must show that their needs mean that they: • Cannot stay where they are in the short term, and do not have any other appropriate housing options to move into; or • Cannot stay where they are in the medium term, and do not have any other appropriate housing options to move into; or • Meet automatic needs entry criteria as per SACHA’s Eligibility Policy. Applicants who meet the Base eligibility criteria will be placed on the waiting list for community housing, and must then meet the CHO eligibility criteria for the CHO they are applying to for housing. The community housing waiting list is currently structured as follows: Category 1 Applicants (and current tenants wishing to transfer) who due to their needs: • cannot remain in their current housing in the short term; and • have no other appropriate housing options available. Applicants (and current tenants wishing to transfer) who due to their needs: • cannot remain in their current housing in the medium term; and • have no other appropriate housing options available. Applicants who have no needs issues, but who pass other eligibility requirements. Category 2 Category 3 Preference is given to housing applicants with higher needs (Category 1 and 2). However, offers of housing may also be made to applicants in Category 3. CHO Eligibility Each CHO has specific information about its eligibility criteria in its by laws. Potential applicants should ask those CHOs with which they wish to apply for housing, for more information about the CHO eligibility criteria. IMPORTANT NOTE Further information can www.sacha.sa.gov.au. be found in SACHA’s Eligibility Policy, at 24 SCHEDULE B SUMMARY OF RENT POLICY FOR COMMUNITY HOUSING Community Housing Rents Households occupying community housing properties will be charged the lower of either: • The maximum weekly property rent; or • A weekly income based rent (generally 25% of all assessable income except for very low income earners). SACHA currently uses a ceiling rent methodology to determine the maximum property rent (a percentage of property capital value), but will move to a market rent methodology in 2006. Market rents are set by the State Valuer General, and aim specifically to set a maximum property rent that is generally equal to similar properties in the wider rental market. SACHA may also agree to differ the rent from the rent set above in limited cases, such as joint ventures or equity share arrangements. Commencement of rent Charge Rent will be charged in advance, from the date when a household occupies a property. Under Section 54 (1) of the Residential Tenancies Act, CHOs may ask for no more than 2 weeks rent in advance. Guidelines for the charging of a bond can be found in Section 61 of the Residential Tenancies Act. Charging less than prescribed rent CHOs may not charge households less than the prescribed rent that would normally apply (i.e. income based or ceiling rent). Charging more than prescribed rent CHOs may only charge more than the prescribed rent that would normally apply (i.e. income based or market rent) as follows: Non member tenants When calculating total household rent, co-operatives may charge non member/ prospective member households an additional percentage of the rent (as specified in SACHA Rent Policy) that the household would normally pay if they were members. Additional services CHOs may choose to add an additional charge to the rent that would normally apply, for additional services that the CHO may provide. These additional charges are subject to conditions outlined in SACHA’s Rent Policy. Income based rent Income based rent is calculated as approximately 25% of gross assessable household income. Income based rent can only be charged instead of the maximum property rent, if the: • Income based rent is lower than the market rent; and • Household provides proof of income as requested, which verifies that income based rent is lower than market rent. 25 Very low income households For households whose total assessable income is less than the current weekly rate of Newstart (minus GST compensation) for a single person with no children, rent will be assessed as 21% of their assessable income rather than 25%. These households will generally be single students. Applying for income based rent Households may apply for an income based rent either when they move into a property, or during their tenancy. In order to be charged an income based rent, households must: • Provide proof of income for each independent household member when applying for the income based rent; and • Continue to provide the above as part of a normal rent review or as specifically requested. Assessing income based rent Income based rent is assessed using the gross assessable income of all persons in a household who receive an independent income. Information about income assessibility and suitable proof of income can be found in SACHA’s Rent Policy. Income of children The income of children must be taken into account as follows: Dependent children (i.e. the parent receives income for the child) • Family Tax Benefit Part A (FTB A) – the base rate of payment is not assessable. Additional payment above the base rate is assessable. • Family Tax Benefit Part B (FTB B) – 50% of the total payment received is not assessable. • Lump sum Family Tax Benefit payments – once-off or annual payments “offset” or “adjustment” payments are not assessable, unless SACHA advises otherwise. • Foster Care Allowance – income equivalent to the rate of FTB A and FTB B that the foster carer would receive if the child was their own would be assessable (minus any deductions that would normally occur for example not including the base rate of FTB A). Independent children (i.e. the child receives an income in their own right) Children aged under 21 – Only income above the at home rate of Youth • Allowance (18 years and over rate) is assessed for income purposes. • Children aged 21 or over – this income is assessable. Other • Maintenance or Child Support Payments – these payments are assessable. • For each child aged under 21, $10 is also deducted from the total household weekly assessable income, before rent is calculated (note this deduction does not apply to children with an income above the at home rate of Youth Allowance (18 years and over rate)). IMPORTANT NOTE Further information can be found in SACHA’s Rent Policy, at www.sacha.sa.gov.au. 26 SCHEDULE C CHO FUNDING SUMMARY The Organisation will be funded for its operational costs by retaining a proportion of rental income as follows: 1. Property allowance – based on 1.0% of Capital Value of properties managed. 1a. Property allowance Country CHOs with less than 25 properties – based on 1.4% of Capital Value of properties managed. Country CHOs are defined as organisations with 100% of their properties located in areas with a postcode of 5200 or above. 2. Administration allowance – tiered into 3 levels. • • • $7 per property per week for co-operatives with up to 90 properties. $17 per property per week for associations with up to 90 properties. Large CHOs managing 90 or more properties, $17 per property per week for the first 90 properties and $20 per property per week for each property above the 90 property limit. These amounts will be indexed annually against the CPI. 3. Maintenance allowance – based on a flat dollar amount of $23 per property per week indexed annually in line with CPI. 3a. Large CHOs (managing 90 or more properties) – Large CHOs may transfer up to 25% of their maintenance allowance to general operating accounts to cover maintenance administration costs. CHOs doing this must include this in their Maintenance Plan for approval by SACHA. This funding methodology will be reviewed within 2 years from its initial implementation. 27 SCHEDULE D CHO REPORTING REQUIREMENTS The Organisation will submit the following reports to SACHA by the dates shown or other such dates as agreed with SACHA : Report Capital Contribution Statement CHO Budget Maintenance Plan or update Data Collection including segmented waiting list Notification of Authorised Person Audited Financial Statements (or Annual Report including Audited Financial Statements) Clause 2.3.2 and 6.5 2.7.6 and 6.4 5.6.8 and 6.3 6.1 5.1.2 and 6.6 2.7.3 and 6.2 Due Date 21st of the month 31 May 31 May 31 July 30 September 30 September Frequency Monthly Annually Annually Annually Annually Annually CAPITAL CONTRIBUTION PAYMENT AND REPORTING REQUIREMENTS (per clause 2.3). For rent periods commencing in the previous month the Organisation will forward a statement to SACHA by the 21st of each month identifying: a) total Capital Contribution due to the SACHA; b) total Capital Contribution collected by the Organisation in respect to its properties; c) Cumulative number of weeks in arrears; d) The property address / agency number of group and share households; e) Accumulated amount of current tenant arrears; f) Cumulative number of weeks in arrears; and g) Actions taken to recover arrears. The Organisation will forward payment of Capital Contribution due to SACHA by the 21st of each month. 28 SCHEDULE E MANDATORY BY-LAWS Mandatory By-Laws for Community Housing Organisations are referred to under the: • South Australian Co-operative and Community Housing (General) Regulations 1992, Schedule 4, Section C (2) (b) (Tenant Selection) & (4) (a) Appeals Process). Funding Agreement, clauses 3.2 (Tenant Selection) & 4.1 (Rent Arrears). • The three mandatory by-laws cover: 1. Tenant Selection Procedure 2. Appeals Process 3. Rent Arrears It is mandatory for all community housing organisations to develop these by-laws and they must be approved by SACHA prior to their implementation. 29 SCHEDULE F SUMMARY OF MAINTENANCE COMMUNITY HOUSING POLICY FOR CHO Responsibility for Maintenance CHOs will maintain properties to adequate standards as outlined by SACHA. SACHA’s Responsibility for Maintenance SACHA has a responsibility to regulate CHOs in the undertaking of maintenance activity, and assist CHOs to manage maintenance. Maintenance Funding CHOs will use the maintenance allowance to fund repairs, preventative treatments and reasonable improvements to properties. The maintenance allowance can be used to fund any professional inspection of properties by licensed builders. Maintenance Plans CHOs must submit Maintenance Plans to SACHA by May 31 annually. The Maintenance Plans will show forecast maintenance expenditure per property per annum for an eight year period. Unfunded Maintenance Liabilities SACHA will take action when unfunded liabilities are identified in CHO Maintenance Plans or through other dealings with CHOs. SACHA may respond to CHO unfunded maintenance liabilities in the following ways: • Negotiate the return of the property(s) to SACHA, as per Property Sales and Property Returns and Transfers Policies, for • Sale • Redevelopment • Upgrade and redistribution within the Community Housing Sector; or • Provide funding to the CHO to allow the issue to be addressed if SACHA believes the CHO has adequate risk management strategies in place. Stock Inspections CHOs must have all properties inspected within 12 months of signing this Agreement in accordance with SACHA’s funding guidelines for initial inspections. From this point forward CHOs will be responsible for monitoring the condition of their properties on an ongoing basis. IMPORTANT NOTE Further information can www.sacha.sa.gov.au. be found in SACHA’s Maintenance Policy, at 30 SCHEDULE G SUMMARY OF VACANT PROPERTIES POLICY FOR COMMUNITY HOUSING CHO Returns to SACHA and Allowances CHOs are required to report vacancies of more than 6 weeks to SACHA as part of their Monthly Capital Contribution Statement. Vacancies 6 to 12 Weeks SACHA will contact CHOs by letter asking the CHO to return a ‘Vacant Property Information Request Form’ when notification is received of properties vacant for more than 6 weeks. CHOs are required to return this form to SACHA within 14 days. SACHA will contact CHOs that do not return ‘Vacant Property Information Request Forms’ within the 14 day period. Long Term Vacancies 12 Weeks or More The Funding Agreement requires SACHA approval for vacancies of more than 12 weeks. Where a CHO believes it has reasonable cause for a long term vacancy the CHO can submit to SACHA a Long Term Vacancy Request form. SACHA will then assess the risk and reasons for the long term vacancy and will either approve or reject the CHO’s request. If a CHO does not submit a Long Term Vacancy Request Form SACHA will follow processes as outlined in the Vacant Properties Policy until the CHO submits a Long Term Vacancy Request (which may or may not be approved by SACHA). Approval of a Long Term Vacancy Request Where SACHA approves a long term vacancy, approval will be given to the CHO for a set period of time. The period set will depend on the reason for the vacancy and the strategies that the CHO has in place to allocate the property. If a long term vacancy approval period lapses the CHO may be required to submit another long term vacancy request to SACHA which may or may not be approved. Rejection of a Long Term Vacancy Request If SACHA does not approve the long term vacancy request SACHA will in the first instance request in writing that the CHO seek applicants from other suitable CHO waiting lists. If a suitable tenant cannot be found for the property within one month of the request from SACHA, SACHA will ask the CHO to return the property to the Authority in accordance with the Returns and Transfers Policy. If the CHO refuses to return the property to SACHA, SACHA will commence processes to call in the Charge on the property in accordance with the Act. IMPORTANT NOTE Further information can be found in SACHA’s Vacant Properties Policy, at www.sacha.sa.gov.au. 31 SCHEDULE H SUMMARY OF MANAGEMENT OF HOUSING APPLICATIONS POLICY FOR COMMUNITY HOUSING The principles guiding the management of Community Housing applications are as follows: Applicants All applicants for Community Housing must first meet the base government eligibility requirements for Community Housing as described in Schedule A of this Agreement. Community Housing Organisation Responsibilities Organisations will: • Manage their own individual waiting lists segmented on the basis of need; • Nominate from time to time whether their waiting lists are open or closed to new applications; and • Be responsible for responding to individual enquiries and/or applications for housing/membership. Housing Associations Housing Associations will assign a priority to applicants based on: • • Applicants first meeting the eligibility criteria as determined by the Association; and The assessed level of need of individual applicants. Housing Co-operatives Housing Co-operatives will assign priority for tenant membership based on: • • • Applicants’ first meeting the eligibility criteria as determined by the Co-operative; Applicants being deemed to be suitable, compatible and committed to tenant management; and Assessment of need then being undertaken to determine the applicant’s position on the waiting list. Any future policy changes proposed to the management of Community Housing applications eg. the introduction of a New Application System, will be consulted on widely in accordance with the principles set out in clause 1.1 of this Agreement. IMPORTANT NOTE Further information can be found in SACHA’s Management of Housing Applications Policy, at www.sacha.sa.gov.au. 32