LAND LEASE COMMUNITY NEWS

The Act: One year on

Gateway Lifestyle Stanhope Gardens
Gateway Lifestyle Stanhope Gardens

Yes it really has been a year since the law changed and residential parks became residential land lease communities, rent became site fees, residents became home owners and park managers became operators.

In the lead up to the change the then Fair Trading Minister The Hon Anthony Roberts said there was no question the Government needed to “protect vulnerable residents and support a viable industry” and that the new law would be “balanced and fair.” So, has the Act delivered? Let’s take a look at some of the impacts so far.

Site fee increases

The new process for challenging excessive site fee increases by notice requires 25 percent of home owners who receive the notice to object to the increase, otherwise it cannot be challenged. Home owners can then make an application for compulsory mediation. NSW Fair Trading, who conducts the mediation, report that they have been largely successful in bringing the parties together to get agreements. To date only two attempts at mediation have failed and resulted in Tribunal applications.

Whilst mediation may be proving successful, other areas of site fee increases continue to cause concern for home owners. In our July issue of Outasite Lite* we featured an article about operators failing to comply with their obligation to provide home owners with an explanation for site fee increases. We are aware of a number of breaches of the Act regarding site fees in new agreements. The Act requires these to be no higher than ‘fair market’ value but we have seen site fees set at $50 a week higher than what the law requires.

Utility charges

There were some changes to water and electricity charges under the Act and a new sewerage usage charge was introduced (for people on new agreements). Many home owners still find utility charges confusing and uncertainty about whether they are being correctly charged remains an issue. On a positive note, we are aware of one operator that has provided copies of their accounts to a home owner on request.

The Government issued a draft amendment to the Regulation regarding service availability charges for electricity. At the time of writing the amendment has not been finalised.

Sale of homes

Despite numerous new provisions in the Act increasing home owners rights and seeking to protect them from interference by operators when they are selling their home, this remains a very significant issue. The Tenants’ Union is aware of sales that have collapsed because of unacceptable site agreements offered to purchasers by operators. At least one operator has interfered in a sale by requiring compliance with local government regulations only after being advised that the home was to be sold – a clear breach of the Act.

Assignment

The right to assign a site agreement has been the subject of a number of Tribunal hearings and remains a key issue for home owners.

Repairs and maintenance

The Act clarifies and expands the obligations of operators regarding the maintenance of common areas and trees but unfortunately it is silent on site maintenance and this has caused difficulties for at least one home owner that we are aware of.

Under the Residential Parks Act 1998 the operator was required to provide and maintain the residential site in a reasonable state of cleanliness and fit for habitation. However, under the new Act the obligation is only “to ensure the residential site is in a reasonable condition, and fit for habitation, at the commencement of the site agreement for the site.” The failure of the Act to clarify that the operator has an obligation for maintenance could lead to confusion and disputes if issues arise with a site.

So, it looks like the Act has brought some improvements for home owners but a number of old issues remain and new problems have been created. There is still a great deal of work to be done to educate both home owners and operators about their rights and obligations under this Act, and the intention of some provisions has yet to be settled. It has been a busy year for those involved with land lease communities and 2017 is unlikely to be any different.

*Outasite Lite is a free email newsletter. You can see past issues and subscribe at ...

 

Click here to download a pdf version of Outasite 2