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Residential park residents

Residential parks are properties on which manufactured homes, caravans and other moveable dwellings are situated, and in which residents live subject to agreements with the park operator.
New South Wales legislation now refers to residential parks as ‘residential (land lease) communities’, but most people still call them ‘residential parks’, so we will too.

Residents of residential parks may be:

  • home owners (that is, they own the home they live in, and lease the site on which it sits); or
  • tenants(that is, they rent the home they live in from its owner – usually the park operator).

Home owners in residential parks have ‘residential site agreements’ with the park operator that are covered by the Residential (Land Lease) Communities Act 2013 (NSW) (the RLLC Act 2013). Tenants in residential parks have tenancy agreements that are covered by the RT Act 2010, but some aspects of the RLLC Act 2013 affect them too.

This is new

Previously, park residents were covered by the Residential Parks Act 1998 (NSW) (the RP Act 1998). The RLLC Act 2013 commenced 1 November 2015 and replaced the RP Act.

Tip

The Tenants’ Union of NSW and the local Tenants Advice and Advocacy Services provide information and advice to residential park residents, including home owners. For factsheets and other information, see The Noticeboard, a website for park residents.

Coverage of the RLLC Act 2013 (NSW)

All sorts of manufactured homes, caravans, vans and other ‘portable devices for human habitation’ can be a ‘home’ in a residential park under the RLLC Act 2013 – the only exception is a tent (section 4).

However, the Act does not cover everyone who owns their home in a residential park. If you use the home for holiday purposes, or if you’re staying at the park while engaged as an itinerant worker, you are not covered by the RLLC Act 2013 (section 7).

This is new

The RP Act had a wider exclusion of persons who did not use the home as their principle place of residence, and limited campervans and caravans without rigid annexes to tenancy agreements only. The RLLC’s exclusions are more narrow and specific.

Becoming a home owner in a residential park

There are a number of ways of becoming a home owner in a residential park. The main ways are:

  • bringing a home you already own onto a vacant site
  • buying a home onsite from the park operator
  • buying a home onsite from a home owner.

In each of the first two ways, you will need to enter into a site agreement with the operator. Before signing, the operator must provide you with a disclosure statement about fees and charges payable and certain other matters (section 21). After signing, and provided you haven’t yet moved in or installed a home on site, there’s a 14-day cooling off period in which you can cancel (‘rescind’) the agreement without having to pay compensation to the operator (section 23). If you’ve also agreed to buy the home from the operator, the purchase agreement can also be rescinded in the cooling off period (section 23(4)).

If you buy a home from a home owner, you may either enter into a new site agreement with the operator (with required disclosure statement and cooling off period, as above), or you can get the home owner’s existing site agreement assigned to you. If you get a new agreement, the site fees are limited to what is currently payable for the site, or what is payable for equivalent sites at the park (whichever is higher) (section 109(6)). If you get the existing site agreement assigned to you, the site fees and other terms are the same as those applying to the previous resident.

Be aware that site agreements entered into after 1 November 2015 (the date the RLLC Act 2013 commenced) may provide for a ‘voluntary sharing arrangement’, under which you may be liable to pay deferred fees or a share of any capital gain to the park operator when you sell your home (section 110). Seek advice from a Tenants Advice and Advocacy Service or a lawyer about any ‘voluntary sharing arrangement’ put to you.

Tip

All residential parks are required to be registered with NSW Fair Trading. The Residential Parks Register shows contact details for the park, the name of the operator and details of enforcement and disciplinary action that may have been taken in relation to the park.

Site agreements

Site agreements are similar to residential tenancy agreements under the RT Act 2010, but site agreements have different provisions about fees and charges, stronger protections against termination and provisions dealing with some of the special aspects of owning a home in a park, such as sale of the home.

Fees and charges

The rent you pay for your site is called the site fee. There are two ways in which site fees may be increased:

  • By a fixed methodset out in the site agreement (eg by reference to increases in the Consumer Price Index or the Age Pension) (section 66). If the operator follows the fixed method and gives the required notice (14 days), the increase cannot be challenged under the RLLC Act (section 66(4) and (7).
  • By notice. The operator must give 60 days' notice of an increase in writing to all residents at the same time (section 67(3) and (5)). If at least 25 per cent of home owners think the increase is excessive, they can apply to NSW Fair Trading for mediation (section 69). If the mediation is unsuccessful, they can apply to the Tribunal, which will determine whether the increase is excessive considering a range of factors (section 74). Site fees cannot be increased by notice more than once per year (section 67(6)).

You are also liable to pay charges for utilities, provided they are separately measured or metered (section 77(2)), as well as service availability charges for electricity, water and sewerage, and fees for late payment of utility charges (but not more than the utility service provider would charge (Residential (Land Lease) Communities Regulation 2015 (NSW), section 78(1), clause 11). You may also have to pay a deposit ($25) for a boom gate key (section 76(1)). If you have a site agreement from before the commencement of the RLLC Act 2013 and it does not provide for a fee that the new Act allows (for example, the utility charge late fee), you do not have to pay the new fee (Schedule 2, clause 15).

Termination

Site agreements cannot be terminated by a park operator without grounds. The RLLC Act 2013 sets out grounds for the termination of residential site agreements: these are summarised at Table 9.1. In relation to some of these grounds, the resident is entitled to be compensated by the park operator.

Table 9.1. Grounds for termination of site agreements by park operator

Ground

Notice period

Notes

Breach of community rule(s 93)

Apply directly to Tribunal

Operator must first give 30-days' notice to remedy the breach

Serious or persistent breach (s 122)

90 days

Non-payment of site fees is a breach only if fees are unpaid for 30 days or more

May be given during a fixed term

Repairs and upgrading (s 123)

90 days

Obligation on operator to do repairs or upgrading must be imposed by or under an Act, and a copy provided to the home owner

May be given during a fixed term, but not to terminate before the end of the fixed term

Home owner is entitled to compensation

Closure (s 124) 12 months or end of fixed term

If the use of the community requires development consent, termination notice must not be given until development consent is given

May be given during a fixed term, but not to terminate before the end of the fixed term

Home owner may apply to Tribunal to postpone date for vacating the site

Home owner is entitled to compensation

Change in use of site (s 125)

12 months

Park operator must first get authorisation from the Tribunal to give the termination notice

If the change of use requires development consent, termination notice must not be given until development consent is given

May be given during a fixed term, but not to terminate before the end of the fixed term

Home owner may apply to Tribunal to postpone date for vacating the site

Home owner is entitled to compensation

Compulsory acquisition (s 126)

90 days

Ground is that the site is being compulsorily acquired by the State or Commonwealth Government

Home owner entitled to be compensated

Lack of authority for use of site (s 127)

90 days

Ground is that the site is not lawfully useable for the purposes of a residential site

Home owner entitled to be compensated if the residential site was not lawfully useable when the site agreement was entered into

Non-use of residential site (s 128)

180 days Ground is that the home owner has not used the site as a place of residence for the past three years
Serious misconduct No termination notice: operator applies directly to Tribunal

Tribunal may terminate if home owner has intentionally or recklessly caused or permitted:

  • serious damage to any property in the community (ie the park)
  • injury to any person in the community
  • use of site for an illegal purpose
  • serious or persistent threat or abuse towards operator, agent, employee, contractor or another resident

Termination may be ordered during fixed term

This is changed

Some notice periods and grounds have changed slightly from those in the RP Act 1998.

Where you are entitled to compensation, the amount of compensation is calculated depending on whether you are relocating your home to another park. If you are relocating, you are entitled to the likely costs of relocation (including removal and disconnection at the old site, transportation, and installation, reconnection and landscaping at the new site), paid in advance of your move (section 140). If you are not relocating, your site agreement may set out how you will be compensated; if not, the range of factors at section 141 should be considered. If you cannot agree with the operator as to the amount of compensation you should be paid, you can apply to the Tribunal to determine the amount.

Finally, there are four other notable provisions for the termination of residential site agreements:

  • A home owner can give a 30-day termination notice without grounds (section 117(2));
  • There is no provision for termination notices without grounds at the end of a fixed term;
  • Where a site becomes uninhabitable (but not as a result of a breach), the site agreement terminates (section 62);
  • As an alternative to giving a termination notice, a park operator may give a 90-day notice for a home owner to relocate their home to another site in the park (section 136). If you agree to relocate, you are entitled to compensation.

Selling your home onsite

You are entitled to sell your home onsite (section 105(1)). You are obliged to first notify the operator of your intention to sell (section 105(2)), and cannot put up a for sale sign until you do. The park operator must not interfere with the sale (section 107), but they may refuse to enter into a site agreement with a prospective purchaser if they have reasonable grounds for doing so (for example, the prospective purchaser is listed on a tenancy database, or has been evicted from a park for breach within the past five years (section 107(3) and (4)).

You may conduct the sale yourself, or engage an agent. If you choose, the park operator may act as your agent (section 112).

As well as selling your home, you may assign your site agreement. You will need the operator’s consent (section 45(1)). It is not clear whether the operator may refuse consent unreasonably (because of ambiguous wording at section 45(3)); seek advice from your local Tenants Advice and Advocacy Service if you think an operator is refusing unreasonably.

Note that if your site agreement includes provision for a ‘voluntary sharing arrangement’, you may be liable to pay money to the operator from the sale of your home.

This is new

There were no provisions for 'voluntary sharing arrangements' under the RP Act 1998.

 

Other park things

The following provisions are peculiar to the RLLC Act 2013. They are relevant to all residents - both home owners and renters.

Community rules

A park operator can set community rules on a wide range of matters about living at the park. Common examples include rules about pets, noise, use of park facilities, conduct of residents and visitors, and how long visitors may stay.

Community rules are required to be fair and reasonable, and clearly expressed (section 86(3)). If a rule does not apply uniformly to all residents, it is presumed to be not fair or reasonable, and in any dispute about the rule the onus would be on the operator to show that it is fair and reasonable (section 86(4)). If a community rule is inconsistent with a term of a site agreement or tenancy agreement, or inconsistent with another law, the rule has no effect (sections 86(8) and 87). Many parks that style themselves as ‘retirement communities’ have a rule that residents must be aged 55 and over (the RLLC Act 2013 contemplates this at section 44(6)); however, such a rule is probably inconsistent with anti-discrimination legislation and therefore ineffective.

Community rules may be changed by the operator (section 90); they must first consult with the residents committee and give all residents 30 days’ notice of the proposed change. A change in rules does not invalidate anything that occurred before the change, and a change that prohibits a pet does not apply to any pet already kept by a resident (section 86(5) and (6)).

All residents and the operator must comply with the community rules (section 92), and the operator must be fair and consistent in enforcing them (section 93(1)). If the operator thinks you are in breach of a community rule, they may give you a notice to remedy the breach within 30 days; if after the 30 days they think you are still in breach of the rule, the operator may apply to the Tribunal to terminate your site agreement or tenancy agreement, or for an order that you comply with the rule (section 93(4)). If you think the operator or another resident is in breach of a community rule, you may give a 30-day notice to remedy to the operator and, if the breach is not remedied, then apply to the Tribunal for an order that the person comply with the rule (section 94).

Residents committees

The residents (home owners and renters) of a park may establish a residents committee to represent the interests of residents in the day-to-day running of the park and any complaints or proposals raised by residents (sections 96 and 97). Only one residents committee can exist for a park at any one time (though you can set up separate committees for other purposes (for example, social committees) (section 101)).

The park operator must provide the residents committee with the contact details of all residents at the park, and must not obstruct the residents committee in the exercise of its functions (section 97(2) and (3)). The operator cannot be a member of the committee (‘close associates’ of operators cannot be members either), but may speak at meetings if invited by the committee (section 103).

Park infrastructure

The operator must provide reasonably accessible and secure mail facilities for all home owners (section 47). Residents are entitled to have tradespersons and other service providers they engage access their homes (section 40), and emergency and home care service vehicles must be able to access the park, day or night (section 41).

An operator may (including at the suggestion of residents) provide a new or upgraded facility funded by a special levy paid by home owners (section 50). To impose a special levy, all home owners at the park must get 90 days’ notice of the proposal, and the proposal be approved by 75 per cent of the home owners. All home owners must pay the special levy.

This is new

There was no provision for special levies under the RP Act 1998.

Complaints and disciplinary action against operators

The RLLC Act 2013 requires operators to register with NSW Fair Trading (section 16), comply with a set of rules of conduct (section 54 and Schedule 1) and, if they’re a new operator, attend an ‘education briefing’ (section 55). The Act also prohibits operators from ‘retaliatory conduct’ against residents who make complaints or try to enforce their rights (section 56) and allows NSW Fair Trading to take disciplinary action against operators who breach the Act, and to seek the appointment of an administrator to run a park if the operator is particularly bad (section 164).

There is a problem in the parks industry of some operators regarding their parks as fiefdoms and treating residents badly: if it happens to you, get together with your fellow residents and seek support from your local Tenants Advice and Advocacy Service, the Tenants’ Union and NSW Fair Trading.