Anderson’s Win Settles More than One Dispute on Unfair Contract Terms

While new land lease community laws have been in place for over a year prohibiting the use of multiple elements in a fixed method of site fee increase, last year one case challenged the practice under provisions of the Australian Consumer Law.

Mr Michael Anderson, a home owner at Kincumber Nautical Village (KNV) moved into the community in early January 2020 and signed a site agreement with a fixed method of increase containing five elements.

He recently won his case in the NSW Civil and Administrative Tribunal (NCAT), making the wait worthwhile and the case an excellent resource for home owners who now have greater clarity around successfully challenging an unfair contract term under Australian Consumer Law (ACL). 

In Mr Anderson’s community there were about 160 home owners with site agreements that have a 'by notice' method of increase and 200 home owners with site agreements that had the now redundant multi-element fixed method of increase similar to Mr Anderson's. Over time a stark contrast in site fee increases arose between home owners on the 'by notice' method of increase and those on the excessive fixed method increase.

For a time, this was managed for Mr Anderson at least by the operator temporarily reducing the site fee increase. In November 2023 Mr Anderson was hit by a double whammy site fee increase when the operator withdrew the temporary site fee reductions.

Mr Anderson sought legal advice and assistance from the Tenants’ Union of NSW. We prepared a letter of demand for the refund of all the extra site fees that Mr Anderson had paid since the increase took effect, asserting that the site fee increase term was void because it was an unfair contract term within the meaning of s23 of the Australian Consumer Law (ACL). Once this request was not met an application was filed with NCAT in March 2024 and the decision was finally delivered on 26th September 2025.

Related Proceedings in NCAT

The residents of Kincumber Nautical Village have a protracted history of dispute with the former operator regarding both excessive site fee increases and the use of the multi-element fixed method of increase in their site agreements.

In earlier editions of Outasite and Outasite Lite we reported on some of the cases initiated by home owners from the community prior to Mr Anderson’s application to the Tribunal. (Outasite magazine 6 and Outasite Lite edition 40). 

Ordinarily the fixed method of increase cannot be challenged under the Residential (Land Lease) Communities Act 2013 (RLLC Act). However, a group of 52 home owners applied to the New South Wales Civil and Administrative Tribunal (NCAT), for a determination that their multi-element fixed method was inconsistent with section 65 and section 66 of the RLLC Act and also sought orders that it was an unfair term under Australian Consumer Law (ACL). 

The Tribunal initially agreed with home owners in Morris & Ors v Kincumber Nautical Village Pty Ltd (KNV), that their fixed method of increase was inconsistent with section 65 and 66 and the case was won.¹ However the Tribunal had not in that case accepted their submissions that the multi-element site fee term was an unfair contract term. Instead NCAT preferred the operator’s submissions that their site agreements are not standard form contracts that engaged Australian Consumer Laws on unfair contract terms. 

The operator appealed the Morris decision. The NCAT Appeal Panel subsequently reversed the decision, determining that the multi-element fixed method of increase was lawful and consistent with section 66 of the RLLC Act. In their view even though it had many elements it was still one fixed method. However without a cross appeal by the home owners, the Appeal Panel of the Tribunal was not required to consider whether the term was an unfair contract term.

Other cases from the same community also preceded Mr Anderson's, highlighting the persistence of home owners from Kincumber Nautical Village in challenging exploitative business practices.

Mr Anderson’s Case Reexamines the Issue of Unfair Contract Term

Mr Anderson’s legal representatives argued in the letter of demand and before NCAT that the site agreement was a consumer contract and a standard form contract within the meaning of the ACL. In accordance with section 23 of ACL, establishing that there was a standard form contract was one part of Mr Anderson's case. The other part of his case was to show that the term being challenged was unfair.

The meaning of unfair is outlined in section 24 of the ACL

(1) A term of a consumer contract is unfair if:

(a) it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and

(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

The Tenants’ Union submitted that the term fails to balance Mr Anderson’s interests and the interests of KNV; the term is not reasonably necessary to protect the legitimate interests of KNV and causes detriment to Mr Anderson if applied or relied on by KNV.

Evidence for Mr Anderson demonstrated that the site fee increase term in his site agreement was not transparent (it did not set a fixed price), and the operator has most, if not all, of the bargaining power when entering into a site agreement with homeowners. It was proven that the operator had already prepared the terms of the site agreement prior to the meeting or discussions that took place when he entered into the site agreement and therefore Mr Anderson was not afforded a genuine opportunity to negotiate any of the terms in it. In effect he was offered the site agreement on a 'take it or leave it' basis.

The Tribunal noted that when a person buys a home in a land lease community, they can’t avoid the legal requirement to enter into a site agreement with the operator. This alone can significantly affect the balance of bargaining power.

The Decision

After the Tribunal had considered all of the evidence and submissions of the parties they determined that a site agreement is a standard form contract and the fixed method of site fee increase term was unfair and therefore void by operation of section 23 of the ACL. The Tribunal ordered that the Operator refund any overpaid site fees from 7th December 2023 and for parties to come to an agreement about the amount to be refunded.

Orders were also made that if an agreement couldn’t be reached about the amount to be refunded, the parties were required to submit evidence about this. The Tribunal has since made the formal order for the refund amounts and issued a certified money order. 

Mr. Anderson's NCAT decision has been published as Anderson v Kincumber Nautical Village Pty Ltd [2025] NSWCATCD 90 and can be found on caselaw.nsw.gov.au. It is a useful reference for current and prospective homeowners negotiating terms of their site agreements, especially because it establishes that site agreements are a standard form contract as defined under the Australian Consumer Law and examines the fairness of terms that are included.

Rights of home owners moving into land lease communities

When buying a home in a land lease community the site agreement that is offered must be in the standard form as provided in Schedule 1 of the Residential (Land Lease) Communities Regulations 2015. The method of site fee increase is specified as a negotiable term.

The Tenants' Union is aware of other instances where home owners were not given a genuine opportunity to negotiate terms that are supposed to be negotiable, especially when it comes to the growing trend of inserting long lists of 'Additional Terms' to site agreements before presenting them to prospective home owners to sign.

Home owners or parties to site agreements can rely on Australian Consumer Law provisions regarding unfair contract terms. If prospective home owners are not given an opportunity to negotiate on terms of site agreement that are intended by law to be negotiable then operators must ensure they do not constitute an unfair contract term.

There is a 14 day cooling off period from the date that a site agreement is signed which allows home owners who are unable to negotiate terms they are comfortable with to cancel the site agreement if needed, without paying any compensation (so long as they are not living there yet). Accordingly the contract for sale can be cancelled in the 14 day cooling off period as well without being required to pay any compensation. (See our Factsheet: Moving into a Land Lease Community.)

For any home owners in need of free and professional advice about whether you potentially have an unfair contract term, contact your local Tenants Advice and Advocacy Service or Legal Aid NSW / Law Access (1300 888 529).

1. The KNV operator successfully appealed the home owners win in Kincumber Nautical Village Pty Ltd v Morris & Ors [2021] NSWCATAP 275 a subsequent appeal by home owners to the Supreme Court of NSW conducted as a class action in Rowe v Kincumber was unsuccessful. Rowe v Kincumber Nautical Village Pty Ltd [2022] NSWSC 1378; Rowe v Kincumber Nautical Village Pty Ltd [2022] NSWSC 533.