With more than 40,000 people living in residential land lease communities in NSW, changes are being made to how these communities are regulated, making it fairer for residents while supporting operators.
Residential land lease communities include caravan parks or manufactured home estates with permanent residents who own their home but lease the land on which the home sits from the community operator. Residents may also be tenants who, for example, rent the home directly from the homeowner.
Following a statutory review of the Residential (Land Lease) Communities Act 2013, a number of changes to laws that set out the rights and responsibilities of residents and operators will start later this year.
Summary of the changes
Improving clarity and transparency of fees and charges
Operators may increase site fees using one of two methods – the ‘by notice’ method or the ‘fixed’ method. Changes have been made to both these methods.
For fixed method site fee increases using a fixed calculation, operators will only be able to use one element (e.g. a fixed percentage) to calculate the increase. This will allow residents to accurately predict and plan for their site fee increases.
For the ‘by notice’ method, operators will need to include more information about the reason for an increase. This will provide residents more transparency about the reasons for a site fee increase.
Further, the new laws will detail the information to be included in utility bills and that bills must be provided to residents at least once every three months.
Fairer electricity pricing in communities with embedded networks
A new price cap will apply to electricity sold to residents in communities through embedded networks. The Independent Pricing and Regulatory Tribunal (IPART) will determine this cap once every 12 months and this will be published on the Fair Trading website.
It is expected that these changes will result in residents having more certainty about energy prices. It will also better protect them against excessive price rises in communities with embedded networks.
Learn more about the changes to electricity pricing in embedded networks.
Supporting residents to make a house a home
Residents will be able to make minor changes like adding window locks or screens without seeking approval from the operator.
Residents will also have the freedom to enjoy their home knowing operators are only allowed to enter their home in certain specified circumstances.
Residents will only be required to fix significant dilapidation of a residential site where they caused it.
Emergency procedure testing requirements
To ensure communities are prepared to respond to emergencies (such as extreme weather events), operators will need to test their emergency procedures at least once a year and keep a record of those tests.
Notice of development applications and planning proposals
Operators will need to give notice to potentially affected residents of proposed development applications or planning proposals in the community that the operator intends to lodge.
Improving voluntary sharing arrangements
Operators will need to give prospective home buyers information about the costs of a voluntary sharing arrangement compared to those for ‘rent only’ site agreements.
Under a voluntary sharing arrangement, a homeowner agrees to pay the operator in ways other than rent in the form of site fees. For example, a homeowner may agree to pay an operator a share of any capital gain the homeowner gets when they sell their home.
Increased notification time for ending an agreement
Operators will need to give homeowners 120 days’ notice of the end of their agreement, rather than 90 days where a residential site is not legally usable as a residence. This will support homeowners by giving them more time to find a different place to live.
When will the changes start?
The Residential (Land Lease) Communities Amendment Act 2024 was passed by Parliament on 21 June 2024.
The new laws except the utility billing requirements will start on 25 September 2024. The utility billing requirements (for example issuing a bill for utility charges at least once every three months) will start on 11 December 2024.
More information
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