C3; Property Investment, Compliance and Management
To ensure the Board delivers its responsibilities for property asset management and it’s obligations as the owner of the building, ‘Farrer House’ for compliance with the Australian Building Regulations and associated statutory requirements and to ensure a consistent approach to maintaining and improving the facility.
The Australian Building Regulations, 2006 require the owner of a building constructed before 1 July 1994 ensure the maintenance of essential safety measures of the building, all safety equipment, safety fittings or safety measures so they fulfil their purpose. The owner is required to provide an Annual Essential Safety Measures Statement indicating that the essential safety measures have been maintained over that 12-month period. Appropriate records of inspections and repair work are kept and support this statement.
3.1 The property at 24- 28 Collins St, Melbourne is owned by the Victorian Farmers Federation Property Trust (VFFPT) and is known as “Farrer House”. Farrer House is an asset managed to provide a long-term return to the VFF from asset value appreciation and returns from tenant leases.
3.2 The VFFPT lease Farrer House to the Victorian Farmers Federation (VFF) using a head lease. The VFF issues sub-leases to contract tenants in accordance with the terms of the head lease. Sub-lease agreements create legal obligations for the VFF and tenants. The VFF maintains infrastructure on each floor to ensure flexibility of tenancy number and area, with the ability to separate rates, power, water, telephony, and internet services for three to four tenancies per floor.
3.3 Sub-leases specify rent and outgoings to be paid by tenants. The VFF benchmark rent on a square meter basis and seek to match a “B class” Melbourne CBD office market. As a guide, sub-leases should specify that outgoings including rates, and utilities such as water and power are to be paid by the tenant. Quid pro quo and service rent transfer arrangements are not permitted. Inducements such as rent discounts or contributions to tenant fit out are permitted. As a guide the rent discount should not be more than 50% of the annual rent or fit out cost.
3.4 Sub-leases must be prepared under independent legal advice in accordance with the head lease. A sub-lease is approved by the CEO and Board Chair. Management maintains a register and record of sub-leases and reports regularly to the RAF committee on matters including occupancy, revenue, expenditure, compliance and service delivery.
3.5 A tenant may apply for rent abatement under exceptional economic or access circumstances. Rent abatement applications must contain sufficient information to show the impact on the tenant. Subject to legislation The CEO may approve a rent abatement for up to three months that must not exceed 50% of the financial impact on the tenant. Further rent abatement periods may be approved by the CEO.
3.6 The CEO may approve the installation of telephony, internet services or other technology infrastructure in Farrer House. However, all tenants are responsible for the appointment of their own internet service or other technology provider.
3.7 The Board of the VFF is also the Board of the VFFPT that has delegated management of the asset to the VFF CEO and governance oversight to the VFF Risk, Audit and Finance Committee. The VFF maintain adequate insurance cover for Farrer House and specific machinery. Tenants (including the VFF) are required to maintain their own insurance coverage for staff and contents of sub leased tenancies.
3.8 Management maintain a Maintenance and Improvement Schedule (MIS) that details essential safety equipment, the required frequency of inspections, and identifies planned maintenance and capital expenditure actions to maintain tenancy and regulatory compliance obligations, including those specified by Occupancy Permits. The MIS is approved annually by the Board with related operational and capital expenditure approved by the VFF Board as part of the annual VFF budget. Maintenance, repairs and modifications are approved by the CEO.
3.9 An independent building surveyor is maintained to conduct a passive inspection program to ensure compliance with requirements by maintenance and other service providers and that the inspection regime results in the provision of an approved Annual Essential Safety Measures Statement (AESMS). The approved AESMS is held by Management for provision on request by appropriate compliance or insurance entities.
3.10 Management maintain a schedule of approved service providers and building surveyors. Services providers are reviewed as required and at least every two years, and are appointed by the CEO after an assessment of (a) value for money, (b) technical ability, (c) service responsiveness, and (d) service level agreement deliverables.
3.11 VFF staff and service providers are required complete and pass of Farrer House building safety and orientation program for which Management maintain a register. The building safety and orientation program is made available to tenants.
3.12 A Job Safety Analysis’ (JSA) is to be completed prior to commencement by any persons undertaking works. The JSA must identify risks and hazards that may be encountered, including OH&S, fire safety and other compliance matters with mitigation steps. The JSA is responsibility of the service provider and must be provided to the VFF Building Manager prior to undertaking any works.
3.13 Management maintain a system for the identification and resolution of issues, faults and defects by tenants. Issues related to compliance, lease or sub-lease obligations are repaired in a timely manner.
3.14 Management maintain a register and store of all Farrer House locks, keys and access fobs provided to tenants and VFF staff.
4. ACCOUNTABILITY VFF
CHAIR VFF CEO
5. RELATED POLICIES / PROCEDURES
Procedure C3; Compliance and fire services and maintenance management Procedure
C4; Farrer House sub-lease and tenant management