LAND LEASE COMMUNITY NEWS

Abandoned and alone

Emma

By Emma McGuire, Tenant Advocate, Mid Coast Tenants Service

Residential land lease community law recognises that people who purchase homes in these communities need to be compensated if the operator takes away the leasehold right on the land where their home is situated.

The Residential (Land Lease) Communities Act 2013 (RLLC Act) provides for the termination of site agreements in certain circumstances including if a community is to be closed or there is to be a change of use of a particular residential site. If a termination notice is issued for one of these reasons, the home owner is entitled to compensation from the operator. However, the following case demonstrates that the law can fail home owners in this situation and when that happens they can find themselves abandoned and alone.

Leonie and Florent Grauls moved into a land lease community on the mid north coast in 2009. I first met the home owners in my capacity as a duty advocate at NSW Civil & Administrative Tribunal (NCAT) in July 2017 when they lodged an application seeking a resolution to a problem which had been on foot for over two years.

The Grauls’ home
The Grauls’ home

The Grauls found themselves in an incredibly unusual situation where they were the only people remaining in an otherwise abandoned land lease community. All other residents and management had left around 12 months earlier when the community was officially closed.

Background

In mid-2015, the land lease community experienced some upheaval when the local council advised of its intention to rescind the operator’s approval to operate and residents were issued with termination notices.

Despite the Grauls being issued with an invalid termination notice in 2015, there had been numerous unsuccessful attempts between the home owners and the operator in 2015 and early 2016 to reach an agreement about compensation for them to move their home. However, by the time I encountered the Grauls at NCAT they had not had contact from the operator for around 18 months. All other residents had left, with or without compensation, along with all traces of the operator. After this extended period of isolation, the home owners sought to bring the matter to a head by lodging their application with NCAT.

NCAT Proceedings

By the time the Grauls’ matter reached a final hearing before NCAT in December 2017, I had obtained some invaluable advice from the Tenants’ Union and we sought to put two arguments to the Tribunal, although we had concerns about the strength of both. It was clear this would be a difficult case to resolve and there was a reasonably strong possibility the Tribunal would not be able to provide a remedy in the Grauls’ favour.

Firstly, we argued the Tribunal could use its broad power under s 157(1)(j) of the RLLC Act to order the operator to give the home owners a valid termination notice. This would trigger the compensation provisions of the Act and entitle the home owners to compensation for the relocation of their home.

Secondly, we sought to argue the home owners could rely on the original (albeit invalid) termination notice issued to them in 2015 and directed the Tribunal to the savings and transitional provisions of the RLLC Act which state that any closure compensation matter which arose under the now repealed legislation but was not finalised under that Act, is to be determined under the provisions of the current Act.

As to the first argument, the Tribunal indicated it could not order the operator to issue a new termination notice as to do so would conflict with the discretionary nature of the operator’s power to issue such a notice. The second argument was fraught with difficulties because of the time that had passed since the termination notice had been issued and because it would necessarily need to rely on the Tribunal exercising its discretionary power to cure the defect in the notice. The Tribunal indicated the time delay (it had been over two years since the termination notice was issued) weighed heavily against this course of action. Further conciliation was suggested by the Tribunal Member before he made a final determination.

For the home owners, the alternative to a conciliated agreement was the likelihood of an adverse decision by the Tribunal and being financially powerless to move. Such an outcome would have been devastating for the Grauls. Although there was always the option of appealing a Tribunal decision, or perhaps to simply stay put and wait out the operator until they required vacant possession of the site and were compelled to issue a new termination notice, these were daunting and uncertain options. From the home owners’ perspective, this issue had gone on long enough and they wanted to leave.

Fortunately, through further conciliation with the operator, we were able to reach an agreement which both parties were happy with – the operator agreed to pay the home owners $40,000 in compensation. The agreement was put into a consent order and the matter was (finally) brought to a close. Considering that without this agreement the likely outcome would have been a dismissal of the Grauls’ application and them walking away with no compensation and no capacity to relocate their home, this was a wonderful outcome for the home owners.

Florent and Leonie deserve enormous congratulations for showing the tremendous tenacity to remain in their home in an otherwise abandoned community until they secured the compensation they needed. Understandably, they’ve decided they’ve had enough of land lease communities for now and have relocated their home to a family-owned block of land.

 

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