LAND LEASE COMMUNITY NEWS

Wrong Agreement? Don't panic - get legal advice

David

Contract law and the rules for contract formation play a key part in everyday life and land lease communities are no different – everything flows from the contract.

Contracts or agreements are usually made in writing but what if you have an agreement that is not in writing, or the agreement is different to the one you should have been given?

Sometimes a dispute may arise from the terms of the agreement or about the agreement itself and the dispute can end up in the NSW Civil and Administrative Tribunal (NCAT).

Here we look at two matters that ended up at NCAT during late 2017 and early 2018. One where the home-owner had no written signed agreement and the other where the homeowners were given the wrong type of agreement applicable to their circumstances.

Dodgy behaviour

David Dodge is a home-owner who lives at Tweed River Hacienda Holiday Park in the Northern Rivers area of NSW. He has lived there permanently since March 2010 with his partner Beryl.

David offered to purchase a home that was advertised for sale at Hacienda in late 2009. The vendor (person selling the home) had a residential site agreement and lived at the home as their principal place of residence.

After making an offer on the home David contacted the park office, completed application forms to live at Hacienda and advised the park owner in writing that he was going to sell his home in Queensland to live in the park.

David got an approval letter from the park owner in October 2009 but he was not provided with a copy of the proposed site agreement. By 28 March 2010 David and his partner had completed the purchase and moved their possessions into their new home at Hacienda.

The following morning David went to the park office and on enquiring about the agreement he was handed an occupation agreement to sign. David took the agreement away to read and on realising it wasn’t the same as the residential site agreement he had seen in the possession of the vendor David refused to sign it. Instead he asked to speak to the Hacienda park owner.

The request for a meeting was ignored. David and Beryl continued to pay rent and live permanently on-site and they were party to excessive rent increase challenges during 2012 and 2013. Following a 2014 excessive rent increase challenge where NCAT capped the rent increases at $5 per week the disgruntled operator appealed to the Appeal Panel questioning jurisdiction and asserting that there was an unsigned Holiday Parks Act (HP Act) long-term casual occupation agreement between the park and David.

Having no written agreement continued to irk David and during this time he lodged a complaint with NSW Fair Trading about it. The park owner didn’t correspond with David and instead wrote to Fair Trading in a short reply stating there was a HP Act long-term casual occupation agreement between the parties. Nothing further occurred.

The law changed at the end of 2015 and there were further proceedings under the new Residential (Land Lease) Communities Act (RLLC Act) at the Tribunal. In these proceedings consent orders were made for a refund of overpaid site fees as a result of a previous excessive site fee increase.

In 2017 David made an application to NCAT under section 26(4) of the RLLC Act for a written site agreement.

David was assisted by the Tenants’ Union of NSW and was successful in his application. The Hacienda operator appealed but their appeal was dismissed following a formal hearing on 4 April 2018. After a protracted eight-year battle, which included giving detailed evidence to the Tribunal, David is finally set to get a written site agreement.

This is what can happen when prospective home-owners either (i) don’t obtain independent legal advice or (ii) where a community operator evades their statutory obligations to provide proper disclosure.

David’s case in the Consumer and Commercial Division was not reported. However the decision of the Appeal Panel can be found on the NSW Caselaw website: Hacienda Caravan Park Pty Ltd v Dodge [2018] NSWCATAP 108 see www. caselaw.nsw.gov.au/decision/ 5aefe83ee4b074a7c6e1efdf

In June 2018, Hacienda appealed to the Supreme Court of NSW against the decision of the Appeal Panel. So the final outcome of David’s case will not be known until late 2018.

The wrong written agreement

In another case where the Illawarra & South Coast Tenants Service assisted the homeowners the principal issue between the parties was the nature of the written agreement itself.

The prospective purchasers of a home in Milton Valley Holiday Park, a south coast residential land lease community, were shown a (blue) site agreement by the operator prior to purchasing a home. They checked the agreement, then proceeded with the purchase and moved in.

When the home owners went to the office to sign their agreement they were provided with a (green) long-term casual occupation agreement. They advised the manger it didn’t look like the agreement they were previously shown by the operator. The manager told the home-owners they had run out of the blue agreements but that the green one was essentially the same. The home-owners signed the agreement without reading it or obtaining advice. The green agreement was a Holiday Parks Act agreement for long-term casuals.

The home owners lived at the community for two years and during this time their site fees were increased under the RLLC Act. After two years they decided to sell, but when they notified the operator of their intention the operator said the home could not be sold as a permanent home – it could only be used for holiday purposes.

The home owners made an application to NCAT for orders about interference with sale and a determination that they had a site agreement. The Tribunal found on the evidence that the home owners lived on-site permanently and had no other principal place of residence.

The Tribunal also found that the written agreement was not made in good faith and the home-owners were misled by the community operator into, “entering a contract which was fundamentally different to that which they believed they were entering and which the operator had represented to them.”

All of the evidence indicated that at the time the agreement was entered into both parties treated it as a residential site agreement. The Tribunal declared the agreement to be a site agreement to which the RLLC Act applies. Unfortunately, for these home owners this is not the end of their story.

Unbeknown to them the site on which their home sits is designated as a short-term site under the approval to operate. This is now complicating the sale of the home.

If you don’t have a written agreement, or you think you may have been given the wrong agreement don’t panic – get advice. You can apply to the Tribunal like these home owners did for a written agreement or a declaration that your agreement is a site agreement to which the RLLC Act applies.

 

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