LAND LEASE COMMUNITY NEWS

Selling your home

03/11/2015

The Residential (Land Lease) Communities Act 2013 (the Act) introduces some new and necessary rights for home owners in the area of home sales. Selling a home on-site without interference should be a basic and easily enforceable right but this has not always been the case. Hopefully the new provisions will change this.

Under the Act every home owner has a right to sell their home on-site. The Residential Parks Act 1998 (Parks Act) enabled park owners to prohibit on-site sales or place restrictions on sales by inserting additional terms into site agreements. On-site sales cannot be prohibited or restricted under the Act and any terms in old site agreements relating to this are now void.

Under the Parks Act the sale of homes in parks on land within a Crown reserve or dedicated under the National Parks and Wildlife Act 1974 were often restricted due to special provisions. The right to sell onsite now also applies to home owners in these parks.

The Act also attempts to improve the flow of information between a home owner and operator during the sale process. There is a new requirement for home owners to provide a ‘notice of intention’ to the operator before offering a home for sale. A for sale sign can be displayed on the home only after the operator has been notified.

Home owners are now also required to refer genuine purchasers to the operator before entering a contract for sale but, a failure to do so does not invalidate the sale.

Interference

It was an offence under the Parks Act for the park owner to interfere in the sale of a home but for many residents this provision offered little or no protection. Some residents sought orders at the Tribunal to prevent interference but such orders were virtually impossible to enforce and Tribunal Members often acknowledged this.

The Act provides that ‘the operator of a community must not cause or permit any interference with, or any attempt to interfere with’ a home owner’s right to sell a home. It then goes on to specify some actions that constitute interference including unreasonably restricting prospective purchasers from inspecting and making false or misleading statements about the community.

A common tactic in the past was park owners claiming that homes couldn’t be sold because they didn’t comply with the local government regulations. The Act states that interference includes the operator taking any action to require the home owner to comply with the regulations after becoming aware that the home owner is seeking to sell the home.

Compensation

The new provisions are stronger than those under the Parks Act but the real strength lies in the new Tribunal powers. The NSW Civil and Administrative Tribunal (NCAT) can now make an order requiring the operator to take all necessary steps to facilitate the sale of the home to a specific purchaser and award compensation to the home owner if the operator has interfered in the sale through either action or inaction.

Site agreements

When a home was sold under the Parks Act there was nothing to compel a park owner to enter into a site agreement with the purchaser and no system to resolve this issue other than by assignment. The Act has provisions related to this situation but they don’t actually resolve the problem.

If requested, an operator is required to enter into a site agreement with a prospective home owner unless the operator declines the request on reasonable grounds, or the operator and prospective home owner do not agree on the proposed terms of the site agreement. This gives the operator a range of ways out of entering an agreement and thus enables back-door interference with the sale of the home.

The saving grace for home owners is access to the Tribunal. The Tribunal can determine disputes about the whether an operators refusal to enter into a new site agreement with a prospective home owner is reasonable.

A home owner also has the right to assign their agreement to a purchaser and this may remain the safest and simplest option.

Selling agents 

A home owner has the right to appoint any person they choose as their selling agent.

The selling agent must enter into a written agreement with the home owner setting out the sale commission, incidental expenses and the services to be provided. Without a written selling agency agreement the selling agent is not entitled to claim any fees from the home owner for the sale of the home.

 

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