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Standard fact sheet.
Large print fact sheet.

Land lease community site fees 

Site fees are the recurrent charges each home owner pays to the land lease community operator for leasing the site. They are similar to rent a tenant pays to a landlord or the strata levies payable in a strata scheme. Site fees can be used by the operator to meet the maintenance and operating costs of running the community.

How are site fees set?  

The initial site fees must be set out in your site agreement. Site fees can be negotiable. The initial site fees cannot be higher than:

  • what the previous home owner for the site was paying, or
  • the average site fees for sites of a similar size and location in the community.

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How can site fees be paid?  

The method(s) of paying site fees must be:

  • agreed between each home owner and the operator
  • set out in the site agreement.

You must be given at least one cost-free way of paying your site fees, such as paying in cash at the community’s office or by direct debit. Any agreed method of payment can only be changed if a new method is agreed in writing by both the home owner and operator.

The home owner and operator can also negotiate how often site fees should be paid. An operator cannot ask to be paid more than a fortnight in advance.

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Must I be given a receipt?  

Yes, the operator must give you a receipt for any site fees paid in person. If site fees are paid by another method, the operator only has to give you a receipt if you ask for it.

Site fee receipts must include:

  • the name and address of your community
  • your site number
  • your name
  • the amount paid
  • any amount you are in debit or credit as at the date of payment
  • the period covered by your payment
  • the date your payment was received.

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How can site fees be increased? 

Site fees can only be increased:

  • by fixed method set out in your site agreement, or
  • by notice from the operator.

There are advantages and disadvantages under both methods for home owners and operators. Fixed method increases provide certainty while the notice method allows flexibility.

If your site agreement does not have a fixed method for future site fee increases then the site fees can only be increased by the ‘notice’ method.

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Increasing site fees by 'fixed method' 

Under this method you have an up-front agreement with the operator about how and when your site fees will increase. A fixed method may take different forms. For example, increases in site fees could be linked to the Consumer Price Index (CPI), a percentage of the Aged Pension, a set dollar amount (for example, $5 per year) or a set percentage (2% per year).

Under the fixed method of site fee increases:

  • any fixed method must be set out in your site agreement.
  • the fixed method may be either for the duration of your occupancy or for a shorter period specified in the agreement.
  • only one fixed method may be used in a site agreement. If more than one fixed method is specified, the method that results in the lowest increase applies.
  • it is an offence for an operator to increase, or attempt to increase, the site fees other than in line with the agreed fixed method.

The agreement will need to outline how often the fixed method will be applied. There is no restriction to only increase fees once per year. So, a fixed method linking to rises in the Aged Pension could mean that the increase will occur annually or each time the pension is increased during the year.

The operator must give you at least 14 days written notice before applying the increase. This notice must include:

  • the amount of the increased site fees
  • how the formula was applied
  • the day from which the new amount is payable.

You are not required to pay any increases unless you have received proper notice from the operator.

As the fixed method has already been agreed by the parties when signing the site agreement, increases that follow the requirements for this method cannot be challenged in the NSW Civil and Administrative Tribunal. However, there may be other ways the increase can be challenged (such as unfair contract terms under the Australian Consumer Law).

If you are unsure about the calculation or how it will apply to your situation, talk it through with the operator so that you fully understand your obligations under the agreement before you sign it.

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Increasing site fees by 'notice method'  

If your site agreement does not contain a fixed method the operator needs to: 

  • give you at least 60 days' written notice before increasing your site fees
  • explain the reason for the increase
  • give notice of the proposed increase to all home owners in a community at the same time
  • have the increase take effect on the same day for all home owners.

Increases cannot occur more than once in any 12 month period. 

While it may often be simpler or fairer for everybody to be given the same amount or percentage of increase, this is not required by law. An operator may give different increases to different groups of home owners within the same community. However, this needs to be for legitimate and justifiable reasons. For instance, increases could vary because the size of certain sites are bigger, the location of certain sites are better or some sites have exclusive access to services and facilities. It could be that the same percentage is applied but this results in different dollar increases as not all home owners are coming from the same base.

After a notice of a proposed increase has been given, the operator is able to cancel it or reduce the increase by issuing another notice. However, a new notice does not have to give a fresh 60 days and the reduced increase can take effect from the date specified on the original notice.

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