Changes to the Residential Parks (Long-stay Tenants) Act 2006

The Residential Parks (Long-stay Tenants) Amendment Bill 2018 was passed through Parliament on 25 June 2020. The purpose of the Bill is to amend the Residential Parks (Long-stay Tenants) Act 2006 with the aim of improving certainty of contract and promoting fair dealing between the parties. 

Consumer Protection’s media statement highlights the changes affecting long-stay tenants in residential parks, which can include those living in a caravan, mobile home or park home located within a caravan park or lifestyle village. 

The laws cover:

  • on-site home agreements – where the tenant rents a site and a dwelling in a residential park; and
  • site-only agreements – where the tenant rents the site from the park operator and owns their own dwelling (a relocatable home) which is placed on the site.

When will the changes to the law come into effect?

The Bill was passed by Parliament on 25 June 2020. It is estimated that at least six to 12 months will be required to develop the regulations required before the changes to the laws can commence.
 

What will be the main changes to the residential parks law?

Improve disclosure requirements in long-stay agreements

Operators will have to provide disclosure material at least five days before a contract is signed so tenants can make an informed decision. Park operators will be required to provide additional information in relation to matters such as exit fees.  A continuing disclosure requirement will also be introduced, so that park operators will have to tell tenants about anything that might affect their tenancy, such as an agreement to sell the park.

Creation of standard long-stay agreements

Standard terms are to apply to all agreements, including clear requirements for operators in relation to maintenance. Contracting out of standard terms (replacing terms required by law or asking a consumer to agree to a term that waives their rights) will not be permitted. Standard form agreements will also be introduced and will need to be used for new agreements. Both operator and tenant will be able to add additional terms to the agreement as long as these terms don’t conflict with residential parks law. 

Termination of long-stay agreements

Park operators will no longer be allowed to terminate site-only agreements without grounds. Instead a list of specific grounds for termination will apply, such as on the sale or redevelopment of a park; or where a tenant repeatedly interferes with the quiet enjoyment of the park by other tenants. A fixed term agreement entered into after the changes commence will not be able to be terminated on the grounds that the park is to be sold with vacant possession. Agreements will no longer end automatically if a mortgagee takes possession of the park (for mortgages entered into after the changes commence).

Making the rules around rent and other fees clear 

Greater clarity will be required in relation to fees and charges payable under long-stay agreements. Operators will only be allowed to charge actual costs when providing facilities or services. For new agreements, market review of rent will no longer be permitted and any increase in rent must be objectively measurable. 

Voluntary sharing arrangements (exit fees)

Operators will have to disclose voluntary sharing arrangements, such as exit fees or deferred rent arrangements, and provide examples of how this will apply to the tenant’s particular circumstances. There will also be rules around when voluntary sharing arrangements can be included in an agreement.
 

The sale of homes on-site

New provisions will be introduced in relation to the sale of a home on-site and the obligations of the home owner and park operator during the sales process. When the home is sold, the tenant will have to give the buyer a purchase disclosure notice and the sale will be conditional on the buyer entering into a long-stay agreement with the park operator. Park operators will not be able to interfere with the sale of a home or require the tenant to appoint a particular person as selling agent.

Park rules

The changes will clarify the types of rules that may be made by a park operator, including rules for the use, enjoyment, control and management of the park. Both tenants and operators will need to comply with park rules. There will be an obligation on park operators to take reasonable steps to ensure rules are complied with by all tenants. Rules must be applied reasonably, fairly and equitably and clear processes will be introduced in relation to amendment of park rules.

Park liaison committees

Clearer requirements will be included about the creation and running of park liaison committees.

State Administrative Tribunal (SAT)

The changes will provide the SAT with appropriate powers to deal with all issues arising under long-stay agreements and the new requirements introduced by the amendments. New powers will be included for the SAT in relation to harsh and unreasonable terms in agreements, pre-contractual promises and maintenance and repair obligations.

Bonds

There will be a requirement for bonds to be held by the Bond Administrator (the Director General at the Department of Mines, Industry Regulation and Safety).

How will upcoming changes to the residential park law affect me?

Changes that will apply if you have an existing agreement or are entering a new agreement

  • Standard terms are to apply to all agreements, including clear requirements for operators in relation to maintenance. Contracting out of standard terms (replacing terms required by law or asking a consumer to agree to a term that waives their rights) will not be permitted.
  • Continuing disclosure obligation for park operators in relation to matters that impact on a tenancy, such as telling a tenant that the park will be sold or redeveloped.
  • Without grounds termination of site-only agreements will not be permitted. Specific termination provisions relating to use of the park and tenants interfering with quiet enjoyment will instead apply.
  • Operators will have to provide advance notice to a tenant about whether an agreement will be extended at end of the fixed term.
  • When the home is sold, the tenant will have to give the buyer a purchase disclosure notice and the sale will be conditional on the buyer entering into a long-stay agreement with the park operator.
  • Park operators will not be able to interfere with the sale of a home or require the tenant to appoint a particular person as selling agent.
  • New requirements about the creation, amendment and enforcement of park rules.
  • Clearer provisions about abandonment of premises and dealing with abandoned goods.
  • New provisions about establishment of park liaison committees.
  • Security bonds to be held by the Bond Administrator.
  • Broader powers for the State Administrative Tribunal.

Changes that will only apply to new agreements

  • Additional disclosures before entering into a long-stay agreement, including specific disclosure about exit fees and other voluntary sharing arrangements.
  • Agreements to be in standard form.
  • Prohibition on the following types of contract clauses:
    • market rent review;
    • preventing sale of home on-site; and
    • passing on the costs of an agreement to the tenant.
  • No termination of fixed term agreements if the park is sold with vacant possession.

Changes that will apply to new mortgages only

Prevention of the automatic termination of long-stay agreements if a mortgagee takes possession of a park.

 

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