On 1 November 2015 the new Residential (Land Lease) Communities Act 2013 (NSW) came into effect. This law replaces the Residential Parks Act 1998 and applies to arrangements where one person owns a home but leases the land from a separate community owner, such as manufactured home estates or caravan parks. It is important that owners (known under the legislation as the “operator”) and agents acting for operators make sure they are aware of their obligations under the new Act.
Operator responsibilities BEFORE a home owner moves in
Previously known as “residents”, home owners are afforded certain rights before they move into a land lease community. Operators must give home owners:
- a disclosure statement;
- the publication entitled “Moving into a residential land lease community”;
- a written site agreement; and
- a site condition report.
Both the disclosure statement and information publication can be obtained from NSW Fair Trading.
Home owners are also entitled to a 14 day cooling off period and to seek independent advice.
If these requirements are not met by operators, a home owner may be entitled to rescind or withdraw from the agreement.
Operator responsibilities AFTER a home owner moves in
Operators have continuing obligations to home owners after they move in. These responsibilities include:
- taking reasonable steps to ensure the safety of home owners, including having emergency procedures in place;
- maintaining common areas that are fit for use by home owners and are in a reasonable state of cleanliness and repair and free from vermin and noxious weeds; and
- ensuring home owners have a continual supply of utilities (as much as within their control).
If operators fail to comply with their responsibilities they may be subject to an order of the NSW Civil and Administrative Tribunal (NCAT). Such orders may include work orders or compensation to home owners.
Operator responsibilities when increasing site fees
All site agreements must include details about the increase of site fees. Under the legislation, site fees can be changed by either:
- a fixed method; or
- by notice.
The fixed method allows for an increase by either a fixed amount or by a fixed calculation such as the increase in CPI or the aged pension. Fees can only be increased at specified intervals (such as yearly or quarterly) or on a specified date. Home owners must be given at least 14 days’ notice of any fee change – any increase does not have to be paid until the required notice is given.
Where fees are increased by way of notice the change must be given in writing to all home owners at the same time. Fees can only be increased once in any 12 month period and 60 days’ notice is required before the change can come into effect.
If an operator does not comply with these requirements then any increase in fees will be voided. You may also be required to compensate home owners or have an NCAT order made against you.
Community operators have strict responsibilities under the new Residential (Land Lease) Communities Act which, if not complied with, can have significant consequences. Where agents are assisting with the sale of a home in a land lease community care should be taken to ensure the proper disclosure documentation is provided to any potential home owner.
Marriott Oliver is happy to assist an operator or agent when it comes to any aspect of land lease communities. If in doubt – be in touch!
Lauren Howes – Marriott Oliver Solicitors Pty Ltd – 2015