People who have bought homes in residential parks are warning that unjust site fees and unscrupulous operators are threatening their quality of life.
- Some residential park homeowners say it is becoming expensive to live in villages that have traditionally been marketed as affordable living
- The NSW government is reviewing laws that outline the rights and obligations of operators and homeowners
- Operator says residential parks are generally affordable
More than 35,000 people live in NSW residential communities where people own a house but lease the land from the operator.
“I worked in a prison for 22 years and I certainly feel that I’m imprisoned here,” Mary Preston, homeowner at Myrtle Glen Lifestyle Community at Stanhope Gardens, said.
“It’s becoming unaffordable and the attitude is if you can’t pay, move out but where do they move to? How do they move?
“Where does the government think they’re going to put these 35,000 people if this is no longer, affordable housing?”
Site fees cover the maintenance and operating expenses of the community and, according to the NSW industry body, the average ranges between $120 and $300 per week.
Leyla Moncelet, who lives at Kincumber Nautical Village on the Central Coast and paid at the higher end that range, said she was becoming desperate.
She is on a single pension and receives rental assistance.
“It’s very embarrassing when that happens.”
Bob Morris who lives at the same village said the laws did not adequately protect homeowners.
“The balance of power [has] swung totally towards the operators,” Mr Morris said.
The Residential (Land Lease) Communities Act is up for review.
While the Act does not regulate the price of site fees, homeowners and their advocates argue that amendments would strengthen their protections and indirectly improve housing affordability.
‘Unfair’ rises to fees
Mr Morris represented himself and 51 other residents in the NSW Civil and Administrative Tribunal (NCAT) against the Kincumber operator.
In September 2020, the tribunal found the operator breached the Act because it increased site fees by applying more than one fixed method, including a CPI amount, fixed percentage and proportion of outgoings.
The operator has appealed against the decision and the matter is due to be heard this month.
“There are people in here that absolutely have mental health issues worrying about [the site fees],” Mr Morris said.
Court documents show two residents received site fee increase notices of between $13 and $16 per week in 2017.
They were offered a temporary reduction but the operator used those higher fees as a base for the following year’s increase.
In 2018, they received a new weekly increase of between $14 and $18 and were offered another temporary reduction.
The director of Kincumber Nautical Village, Theo Whitmont, said he was “actively engaged with the Residents Committee seeking a positive outcome together”.
Mr Morris wants the government to clarify the original intent of the fixed method and allow residents to challenge excessive increases in the tribunal.
Repairs and maintenance issues
Ms Preston wants operators to be prohibited from increasing site fees to cover the cost of capital expenditure, which adds value to the operators’ long-term assets.
She is contesting site fee increases imposed on homeowners by the operator of Myrtle Glen, Hometown, in 2020 and seeking a reduction through the tribunal.
Ms Preston claimed the operator justified the rise in fees to partly cover capital assets such as pool infrastructure but had not made those improvements.
“They get a huge amount of money out of the residents living here,” she said.
“The park is just a terrible mess and it’s very, very sad.”
The operator of Myrtle Glen, Hometown, argued the site fees were affordable and “significant investment” has gone into the community.
“Improvements increase the appeal and demand to occupy a site within the community and in turn increases the value of each home owner’s asset,” Hometown Joint Managing Director Stuart Strong said.
“Operating expenses of residential communities increase over time and the legislation makes provision for the operator to increase site fees on that basis.”
Hurdles selling homes
Homeowners also said it was difficult to receive permission from the operator to transfer the terms and fees of a seller’s lease agreement to a buyer, a process known as assigning site agreements.
They argue this means prospective buyers can be forced to pay a higher site fee than the previous owner, which can deter them from purchasing.
“Eventually, you become so desperate because you can’t sell your house that the operator will buy the house at a greatly reduced price.”
Mr Strong said some site agreements had “outdated and unfavourable terms” and the preference was to enter new agreements in line with the Act.
He said homeowners were “not presenting any evidence of significant capital loss” and some homes took longer to sell when they were “not appropriately priced or not well presented”.
NSW Fair Trading said it had handled more than 400 complaints since the commencement of the Act in November 2015.