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Government releases issues paper and survey about site rent increases and sale of homes

By Anthony Pitt / 20 June 2022
4 min.
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As mentioned in our previous Alert, the Queensland Government released the Housing Action Plan 2021-2025 on 15 June 2021, which included Strategic Item 18 to “deliver improvements for residential (manufactured home) parks and residential services to address concerns about site rent increases and unsold manufactured homes in residential parks”.  

The Queensland Government has now sought to act on Strategic Item 18 by releasing an issues paper and a survey about site rent increases and the sale of manufactured homes.  

The issues paper sets out the issues and concerns that have been raised by various stakeholders to date. The purpose of the issues paper is to outline the Government’s understanding of these issues and seek community input as to whether these issues have been accurately identified, as well as identifying if there are any other issues that need to be addressed.  

A list of the issues identified in the issues paper is below (with further detail as to each being set out in the issues paper):

1. Issues related to site rent increases
1.1 Affordability of site rent increases for manufactured home owners
1.2 Rising cost of park expenses
1.3 Prospective manufactured home owners may not understand arrangements for site rent increases when purchasing their manufactured home
1.4 Difficulty in predicting future cost of site rent
1.5 Limited options for home owners unable to afford site rent increases
1.6 Disparity in bargaining power between home owners and park owners and the difficulty of disputing rent increases
1.7 Formulas that can only increase site rent
1.8 What constitutes a basis for a general increase in site rent?
1.9 CPI increases are being applied inconsistently
1.10 Normalisation of higher site rent amounts
1.11 Relationship between park owner and valuer
1.12 Act is unclear on relevant considerations for comparison and valuation
1.13 Limited basis for comparison between some parks
1.14 Consultation that must occur with home owners in the preparation of a market valuation
1.15 ‘Goodwill offers’ related to market review of site rent
1.16 Appropriateness of approval process for special increases

2. Issues related to sales
2.1 Complexity of sales process and lack of clarity around timing and notifications
2.2 Assignment
2.3 Park owners are incentivised to sell newly developed manufactured homes over pre-existing ones
2.4 Hindering of the sales process
2.5 Home owner’s ability to place ‘for sale’ signs to market their manufactured home
2.6 Delays in sale
2.7 Use of associated third-party selling agents to avoid restrictions on park owner sales in the Act
2.8 Use of ‘exit fees’
2.9 Home ownership and deceased estates
2.10 Park owners may not understand their obligations as sellers
2.11 Lack of clarity around proof of ownership of a manufactured home

All feedback to the issues paper is requested to be provided by 15 August 2022, which can be emailed to MHconsult@chde.qld.gov.au or mailed to:
MH Consultation
Legislation and Reform
Strategic Policy and Legislation
Housing and Homelessness Services| Department of Communities, Housing & Digital Economy
GPO Box 690
Brisbane QLD 4001

Further, the survey is for current and former home owners to complete and is designed to gather data and information as to their experiences in living in a residential park. The survey closes on 15 August 2022.  

Additional steps and community consultation will occur after the survey has closed and all submissions in response to the issues paper have been received and analysed. As stated in the issues paper: 

“Feedback on this issues paper will inform a Consultation Regulatory Impact Statement (Consultation RIS) to enable a more complete understanding of the problems. The Consultation RIS will seek to identify the cause of the problems identified in this issues paper and in the feedback provided. 

Subsequent stages of the RIS process will identify whether and why there is a need for intervention, identify policy options to address the problems, and provide a cost-benefit analysis of options for resolving the identified problems.”

The issues raised for consultation go to the very heart of the operation of residential parks in Queensland and it is therefore very important that park owners have their say about these significant matters.  

Park owners are encouraged to make their own submission and/or provide key information and feedback to their industry bodies to enable them to do so.  

Should park owners require any further information or assistance with respect to these matters or how they may impact the operation of their residential park, please do not hesitate to contact our Manufactured Homes team.

20 June 2022
Authors
Anthony Pitt
Special Counsel
Anthony is a Special Counsel in our Dispute Resolution practice who specialises in property-related litigation.

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