On 21 March 2024 the Manufactured Homes (Residential Parks) Amendment Bill 2024 (Bill) available here, was introduced to the Queensland Parliament.
The Bill proposes various amendments to the Manufactured Homes (Residential Parks) Act 2003 (Qld) that will have a significant impact on the operation of residential parks in Queensland. These were discussed in our previous article here and cover the following topics:
- site rent increases – introducing a site rent increase cap and banning market reviews;
- introduction of a manufactured home buyback and rent reduction scheme;
- additional requirements for termination orders;
- requiring additional methods to pay the site rent to be offered;
- creating a system of residential park registration;
- requiring parks to publish a comparison document;
- requiring parks to have a maintenance and capital replacement plan;
- additional requirements for site agreements; and
- a new resale process requiring a new site agreement to be entered into in place of an assignment.
The Bill was referred to the Housing, Big Build and Manufacturing Committee for review.
After calling for submissions and conducting public hearings, the Committee tabled its report as to the Bill on 10 May 2024, available here.
In its report, the Chair of the Committee described the Bill as “the most comprehensive reforms brought to the manufactured homes parks sector in the last 20 years”.
Despite the arguments put forward by park owners and industry representatives against the significant amendments, the Committee’s sole recommendation was for the Bill to be passed.
The Committee made the below comments.
Objective of the Bill
“The objective of the Manufactured Homes (Residential parks) Amendment Bill 2024 (the Bill) is to increase certainty for existing home owners by giving immediate relief from large, unpredictable and unsustainable rent increases. The Bill aims to improve consumer protections in residential parks, while balancing reasonable industry viability.”
Banning market reviews
“The committee acknowledges the changes in the manufactured home sector, where homes are increasingly less mobile and where smaller operators are giving way to big multinationals, some with a focus on providing higher-end expensive homes. As the Property Council of Australia acknowledged, this sector is unique and not like other housing sectors. Home owners do not buy real estate, they buy a home that is technically akin to a chattel.
Bearing this unique market sector and its forces, the committee is satisfied that amendments which remove site rent reviews to prevent unpredictable and high site rent increases are appropriate. Central to this consideration are transitional provisions which will allow for park owners to apply to QCAT for an order establishing a new basis for increasing site rent.”
Site rent increase cap
“The committee is satisfied that the balance achieved by the site rent limit proposed by the Bill and the definition of CPI proposed by the Bill is appropriate.”
Site rent payment methods
“The committee considers that the government has not intended to preclude direct debit as a method of payment in the Bill, rather the government is making sure there are a variety of payment options open to home owners. Nevertheless, it would be useful for the Minister to clarify this in the second reading of the Bill.”
Buyback and rent reduction scheme
“The committee is satisfied that amendments relating to the buyback scheme are appropriately balanced. The committee encourages the department to consider the suggestion that applications to the tribunal seeking an extension to the buyback scheme for financial hardship should be exempt from staged dispute resolution processes and are able to proceed directly to QCAT.”
Transparency measures (comparison document, maintenance and capital replacement plan, registration system)
“The committee agrees there should be greater transparency, though we recognise some need for commercial confidentiality.
Home owners want to understand the factors that influence the setting of their site rent and its relationship to the expenditure incurred in running and maintaining the park they reside in. The committee considers this to be a reasonable request and suggests council rates, water and sewerage rates should be included in the new disclosure documents and/or the capital and maintenance plans. Electricity costs should also be included if the park has an embedded electricity network.
The home owners committee should be included as a co-signatory on these documents, or they should be required to officially endorse them.
The committee encourages the government to examine the option of including these suggestions as part of regulation.”
Dispute resolution
“Feedback from Inquiry stakeholders indicated that dispute resolution processes may need to be strengthened. The committee agrees and considers that more work is required to ensure the dispute process is operating as intended for all relevant parties.
Options discussed during the Inquiry included providing additional resources to the Regulatory Services Unit within the Department of Housing, Local Government, Planning and Public Works and refining their scope of responsibilities.
The committee feels there would be great value in creating a distinct division or allocating specific QCAT members to hear home park issues and encourages the Department of Housing, Local Government, Planning and Public Works to liaise with the Department of Justice and Attorney-General regarding this suggestion.
The committee also believes it would be appropriate that home owner committees be allowed to take cases to QCAT on behalf of home owners and encourages the Minister for Housing, Local Government and Planning and Minister for Public Works to possibly include this in regulation.
The committee suggests that the Minister also review dispute resolution processes in any further examination of the Manufactured Homes (Residential Parks) Act 2003 and sector reforms.”
Issues out of scope of the Bill
“The committee suggests that the Minister for Housing and the Department of Housing, Local Government, Planning and Public Works include the definition of manufactured homes, exit fees, and dispute resolution processes in any further examination of the Manufactured Homes (Residential Parks) Act 2003 and sector reforms.”
Concluding remarks
“The extensive evidence heard by the committee during this Inquiry does indicate there are changes and challenges being faced by home owners, who want to preserve the affordability of homes in their villages, and the sector generally.
…
The market dynamics … hold implications for the shape and structure of the sector into the future, implications that carry more weight for home owners than park owners. Whilst the sector may be financially sustainable for the shrinking number of park owners, the committee holds more concerns about an equitable or socially sustainable outcome for senior Queenslanders who have traditionally looked on these villages as an affordable housing option.
The committee believes that an examination by the state government of the future shape and structure of the manufactured homes (residential parks) sector would be warranted. This may include a thorough examination and analysis of the Manufactured Homes (Residential Parks) Act and its applicability to the future shape of the sector. It may also include an examination of an expanded range of ownership models for the manufactured homes (residential parks) sector, such as a community title model, that may better meet the needs of some senior Queenslanders who rely on these residential parks to be the ‘low-income retirees’ haven’ ….
Finally, the committee believes a guiding principle for all stakeholder in this sector – home owners, park owners, as well as the state government - is that of ‘co-investment’ and partnership, and that principle should be reflected in future actions aimed at preserving, improving and enlarging the manufactured homes (residential parks) sector.”
From here, the Minister has up to three months to respond to the Committee’s report which must outline whether the Committee’s recommendation will be adopted and, if so, the way and time within which it will be carried out or, if not, the reasons for not adopting it. Subject to that, the Bill may then be brought back before Parliament for debate and to be passed.
Park owners need to consider the terms of their site agreements and all other aspects of their business to prepare for the commencement of these amendments should the Bill be passed and become law.