(NEW SOUTH WALES) Fair Trading Report: Have said it had handled more than 400 complaints since the commencement of the Act in November 2015 over unscrupulous operators and rising site fees #AceNewsDesk report

#AceNewsReport – Mar.16: More than 35,000 people live in NSW residential communities where people own a house but lease the land from the operator:

Residential park homeowners fighting rising site fees call for fairer laws: ‘People who have bought homes in residential parks are warning that unjust site fees and unscrupulous operators are threatening their quality of life’

The Residential (Land Lease) Communities Act is up for review.

updated 1d ago

Woman looks out, the bars of the flyscreen door blocking her
Mary Preston lives at a residential land lease community in Western Sydney and says more rules and compliance are needed to stop unfair site fee increases.(ABC Central Coast: Sofie Wainwright)

“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?”

A house with a stormy cloud on top
Homeowners say operators have the upper hand under the current Residential (Land Lease) Communities Act.(ABC Central Coast: Sofie Wainwright)

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.

“I did my [grocery] shop this week and the card was denied because it had insufficient funds,” she said.

“It’s very embarrassing when that happens.”

Man slightly looks to the side of the camera outside of his home
Bob Morris, a homeowner at Kincumber Nautical Village, has taken the matter of unfair site fee increases to NCAT.(ABC Central Coast: Sofie Wainwright)

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.

“No-one is saying that an operator shouldn’t be able to run a business and make a fair profit but … there are people, the vast majority of whom are pensioners, that need to be looked after and that is not occurring.”

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.

Three older people reading a document
Homeowners at Kincumber Nautical Village say unfair site fee increases are impacting people’s mental health.(ABC Central Coast: Sofie Wainwright)

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.

Woman looks into the darkness, holds a pen with papers underneath her hands
Ms Preston says the state of the park is not worth the rises in site fees.(ABC Central Coast: Sofie Wainwright)

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.”

Birdseye view of the roofs of houses
Homeowners say amendments to the Act would strengthen their consumer protection.(ABC Central Coast: Sofie Wainwright)

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.

House with a for sale sign
There are calls for incoming residents to pay the same fee as the previous owner and not receive an increase.(ABC Central Coast: Sofie Wainwright)

“You’re a prisoner in your own home,” Jill Edmonds, president of the Independent Park Residents Action Group said.

“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.

Woman sits on her deck
Mary Preston lives at Myrtle Glen at Stanhope Gardens.(ABC Central Coast: Sofie Wainwright)

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”.

“We believe that the [Act’s] strong objective of protecting home owners is largely being met and, in many cases, exceeded,” Mr Strong said.

NSW Fair Trading said it had handled more than 400 complaints since the commencement of the Act in November 2015.

#AceNewsDesk report ………..Published: Mar.16: 2021:

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