On 21 March 2024 the Manufactured Homes (Residential Parks) Amendment Bill 2024 (Bill) was introduced to the Queensland Parliament.
The Bill proposes various amendments to the Manufactured Homes (Residential Parks) Act 2003 (Qld), which will have a significant impact on the operation of residential parks in Queensland, particularly with respect to site rent increases and manufactured home buybacks.
If passed, the Bill will be a significant intrusion into the contractual relations between parties to existing site agreements.
Amendments that commence on assent
Site rent increases
- A site rent increase in any existing or new site agreement is capped at no more than the greater of the CPI and 3.5%.
- If any existing or new site agreement provides for a market review, that provision is of no effect. If an existing site agreement has an alternative basis of increase, that can be used instead. But if no alternative basis exists the CPI can be used.
- In certain circumstances, within two years, the park owner can apply to QCAT for an order varying a site agreement if the operation of the park will not be commercially viable as a result of the ban on market reviews.
- Any reference in existing or new site agreements to the CPI is taken to be a reference to the ‘All Groups Weighted Average of Eight Capital Cities’ published by the ABS.
Buyback and rent reduction scheme
- Home owners with eligible homes (a home that has not been brought into the park by the home owner or a former owner) may give the park owner notice that they wish to opt in to the scheme, if:
- the park owner has been appointed to sell the home;
- the home has not sold within six months; and
- the home owner is no longer residing in the home.
- If the home has not sold within six months of when the opt-in notice is given, the park owner must apply a site rent reduction of 25%.
- If the home has not sold within twelve months of when the opt-in notice is given, the park owner is required to buyback the home from the home owner at an agreed price.
- Procedures are set out to determine a relevant price, at various intervals, by agreement or by the appointment of a valuer.
Termination orders
- As an alternative to a termination order by QCAT requiring the home owner to provide vacant possession of the site, a termination order may include an order that ownership in the manufactured home be transferred to the park owner (but only if the home owner consents to that order).
- For any termination order that is made, QCAT is empowered to make an order requiring the park owner to pay the home owner compensation.
- Objects - Additional objects of the Act have been added of protecting home owners from unfair or excessive increases in site rent; and preserving the safety and security of tenure of home owners.
- Review in three years. The Minister must review the Act in three years to determine if the amendments achieve “an appropriate balance between industry viability and consumer protection” and if any further amendments ought to be made.
Amendments that commence six months after assent
Method of payment of site rent
- A site agreement must include at least three approved ways for the payment of site rent, and one of them must not require the home owner to incur any additional cost.
- Existing site agreements that do not specify at least three approved ways, must provide the home owner a notice within 12 months that nominates at least three approved ways in accordance with the above and invites the home owner to choose one of them.
Amendments that commence on a date to be fixed
Registration of residential parks
- New residential parks must apply to be registered. Residential parks already listed on the existing residential park register are taken to be registered, however the Chief Executive is empowered to request additional information
Park website and comparison document
- Park owners must maintain a website for the residential park, which is to contain a “comparison document” in the approved form (yet to be published).
- It must include a declaration as to the site rent, or the range of site rent, that is payable from the general increase day for a site agreement entered into by a new home owner. The park owner must declare this before each general increase day, and can only make such a declaration once every 12 months.
- It must also include information relating to the facilities, frequency and bases of site rent increases, and services and utilities.
- The comparison document must be updated, and all updated versions provided to the Chief Executive.
Site agreements
- A site agreement must be in the approved form (yet to be published).
- The amendments enable a future regulation to be made which may prescribe what is a permitted basis to increase the site rent.
- A new set of disclosure documents will need to be provided before entering into a site agreement, which will include the newly required comparison document (above).
- A park owner must not unreasonably refuse to enter into a site agreement with a prospective home owner, in which case a prospective home owner may apply to QCAT for an order requiring the park owner to enter into a site agreement.
Re-sales
- The current assignment process under the Act is removed in its entirety. However, a limited right to assign exists where the other person is the home owner’s relative, which the park owner must not unreasonably refuse.
- A new resale process, being that the home owner must first give the park owner a notice of intention to sell; and within seven days, the park owner must give the home owner a notice as to whether the park owner offers services for the sale of manufactured homes, and the site rent that will be payable by a new home owner.
- A sale agreement must be in the approved form (yet to be published); and must not be completed until a site agreement has been entered into.
- For a sale by a home owner, the seller must give the park owner notice of the buyer’s details, and the park owner must provide the disclosure documents to the buyer within seven days – for which the park owner may charge the seller a fee.
- As to the new site agreement to be entered into on a resale:
- the terms of the previous site agreement concerning the following matters must be the same (included utilities, included facilities and services, and any other matters prescribed);
- these terms can however be varied by agreement, but the park owner must not require the home owner to do so or make entry conditional on this occurring;
- the site rent payable must not exceed the site rent, or the range of site rent, declared by the park owner in the comparison document (above).
Maintenance and capital replacement plan
- The park owner must prepare and keep a maintenance and capital replacement plan for the residential park. The details of this plan are to be prescribed by regulation.
- The plan must be revised at prescribed intervals, and changes must be notified to both the Chief Executive and the home owners committee.
Next steps
The Bill has not been passed by Parliament and is not yet law.
Instead, the Bill has been referred to the Housing, Big Build and Manufacturing Committee for review.
The relevant next steps are as follows:
- A public briefing of the Committee will be held on Tuesday, 2 April 2024.
- The Committee has called for submissions, which are due by 12.00pm, 10 April 2024.
- The Committee may set a date for a public hearing to occur for parties who have made submissions to attend.
- The Committee must report back to the Queensland Parliament as to the Bill, which will include the Committee’s recommendations and whether the Bill should be passed, which is due by 10 May 2024.
- The Government then has three months to respond to the report’s recommendations (if any).
- Once that has occurred, the Bill will go back before the Queensland Parliament for consideration and debate. If it is passed, it will be given assent and will become an Act.
If you are concerned by the Bill’s proposed amendments, it is important that you make a submission to the Committee to have your say.
Please do not hesitate to contact our Property Team should you wish to discuss the specifics of these proposed amendments and how they may affect the operation of your residential park.