As part of service redevelopment proposals, an organisation and Human Services may agree that there is mutual benefit in an equity buy-out. A buy-out can involve either:
The Human Services Property Deed of Charge provides an organisation with a right to buy-out the interest of Human Services at any time. However, Human Services does not have a reciprocal right and may only buy-out the interest of an organisation by agreement.
The buy-out is for the financial interest in the property enjoyed by the other party. The financial interest is the proportion of the current property value.
For equity buy-out the current property value is the market value. The market value is to be determined by a sworn valuation. Human Services will arrange valuations from the Valuer-General. At its discretion, the organisation may arrange a second valuation from a private valuer. Any difference in valuations will be resolved at a valuers conference.
The Human Services financial interest is identified as the relevant interest in the Property Deed of Charge/Supplemental Deed of Charge. The organisation’s interest is the property value less the Human Services financial interest.
Where the Human Services interest is subject to buy-out then, following receipt of a cheque for its financial interest, Human Services will arrange for withdrawal of the caveat and cancellation of the Deed.
Where the organisation’s interest is subject to buy-out then, following receipt of a cheque for its financial interest, the organisation will arrange for transfer of Title to the Secretary to the Department of Human Services.
The Human Services relevant interest is to be paid by cheque made out to Department of Human Services and directed to:
Director
Capital Management Branch
Department of Human Services
50 Lonsdale Street
MELOURNE VIC 3000
An organisation may seek approval from Human Services to transfer ownership of a property in which Human Services has a financial interest to another organisation funded by Human Services.
Such proposals are not consistent with Government requirements that funded services be contestable.
It is Human Services policy to buy-out the financial interest of an organisation in property which it no longer requires but for which there is a continuing use for the delivery of human services.
However, if there are regional service delivery needs that cannot otherwise be met, Human Services may approve the proposal, in which case a new Property Deed of Charge will be required with the new registered owner.
As part of service redevelopment proposals, an organisation and Human Services may agree that there is mutual benefit in rationalising their shared proportional interest in a number of properties.
The properties must each be valued to determine the current property value and then the proportional interests "distributed" with the result that the organisation and Human Services each have a 100% financial interest in one or more properties.
For equity exchange the current property value is the market value. The market value is to be determined by a sworn valuation. Human Services will arrange valuations from the Valuer-General. At its discretion, the organisation may arrange its own valuations. Any difference in valuations will be resolved at a valuers conference.
Human Services is required to arrange for withdrawal of the caveat/s on the property/ies and cancellation of the Property Deeds of Charge in which the organisation has a 100% financial interest.
The organisation is required to arrange for transfer of title to the Secretary to the Department of Human Services for property/ies in which Human Services has a 100% financial interest.
If the Human Services financial interest in the properties cannot be evenly distributed then any interest remaining will be reflected in a Supplemental Property Deed of Charge as a revised interest in one organisation property.