Assignment of site agreements
The assignment of site agreements has been an ongoing issue since the commencement of the Residential (Land Lease) Communities Act 2013 (the Act) on 1 November 2015. The problem lies with a drafting error in section 45(3) and relates to whether an operator can unreasonably refuse a request for assignment of a site agreement.
In the Residential (Land Lease) Communities Bill 2013, site agreements could only be assigned during the fixed term. This bill passed the lower house and was then sent to the upper house.
The upper house approved an amendment to section 45 that removed the fixed term restriction and inserted a new sub-section that prohibited the operator from refusing a request to assign a site agreement except on reasonable grounds. Unfortunately, the drafters of the amendment inadvertently used the term ‘tenancy agreement’ where they meant to use ‘site agreement’ and it is this error that has caused the ensuing problems.
The Tenants’ Union and others raised the drafting error with the government on a number of occasions, asking for it to be fixed. The then Minister for Innovation and Better Regulation, Matthew Kean MP indicated that the NSW Government was examining this issue with a view to rectifying and considering “options to address the issue, including repealing section 45(3)”.
Those who have been campaigning to have the error fixed are concerned that this issue has not been resolved. Many are particularly concerned about the reference to removing section 45(3) altogether. At the time this amendment was put forward the Government accepted it and the Bill was amended. The right thing to do is to amend the Act to give proper effect to section 45(3) as was intended by Parliament.
The Tenants’ Union will continue to advocate for the right for home owners to assign their site agreements and looks forward to arranging a meeting with the new Minister for Innovation and Better Regulation, Kevin Anderson to discuss this matter.