Residential Parks (Miscellaneous) Amendment Bill

Second Reading

Members will recall that this bill passed the House of Assembly last year with support from both sides of the chamber but lapsed in the other place due to the prorogation of parliament. The Residential Parks Act 2007, which I will hereafter refer to as 'the act', regulates the relationship between park owners and park residents. When the act was originally passed, caravans and other demountable and movable structures were envisaged; however, a variety of additional accommodation options now exist, ranging from annexes through to manufactured homes. Whilst residents own their own homes, there are no ongoing fees for residing in a residential park except for the lease of the land, unlike retirement villages. Also unlike retirement villages, the property interest can be transferred.

Residential park living is growing in popularity, as it presents an affordable arrangement, often in scenic rural or coastal settings. I am advised that there is no official data on the number of residents in parks, but it is estimated to be 2,600. However, the types of residential parks and accommodation options now on the market differ from what was originally envisaged. Recent cases, such as the eviction of residents from Brighton Caravan Park by the council, have highlighted the need for clarity around the rights and obligations of owners and residents.

Residential park living is often seen as an attractive retirement lifestyle. Purchasers expect that they can reside on site throughout their retirement despite the terms of site agreements that do not make provision for this. Although the current act does not prohibit owners from offering long-term site agreements to purchasers, there is no obligation to do so. While there are many existing agreements voluntarily entered into that have been the subject of negotiation between the parties, equally there are instances where there are no agreements in place or there are periodic agreements that have little protection for residents' interests.

In March 2016, the former government released a discussion paper with respect to the current act and received submissions on it. The primary concern of residents was the insecurity of tenure in addition to inadequate disclosure of information prior to purchase, safety in parks and the payment of compensation. This feedback informed the drafting of a bill that was released for further consultation to key interested parties, including residents and park owners, advocacy groups, the South Australian Residential Parks Residents Association, SA Parks and state government agencies. Ongoing consultation with the interested groups occurred throughout progression of the bill in the House of Assembly, where it was ultimately passed on 28 September 2017 with bipartisan support.

The proposed bill has been developed in consultation with key stakeholders, including SARPRA, SA Parks, state government agencies and park residents. It improves the previously introduced Residential Parks (Miscellaneous) Amendment Bill 2017 by providing more clarity around termination of agreements for redevelopment, providing increased disclosure for any new resident and making several minor administrative amendments.

The bill will introduce measures to provide a more transparent system for residential park residents and owners by providing for better disclosure of information when coming to an agreement. Park owners will face increased penalties if no written agreement, or the same, with a copy of the residential park rules is provided to residents. A two-week cooling-off period will also be introduced to ensure that prospective residents have sufficient time to properly consider their agreement and obtain legal advice.

New section 17B of the bill addresses security of tenure concerns. Currently, at the expiry of a fixed-term agreement, the agreement becomes a periodic tenancy, which currently can be terminated on no specific ground within 90 days' notice. Under these proposed changes, residents of more than five years can have their agreements reviewed upon their expiry and reissued on the same or new terms. Furthermore, park owners will need to give residents 90 days' notice to the expiry of an agreement if they intend to seek revisions to the agreement.

The bill also seeks to require residents' committees in parks where there are more than 20 long-term residents. This will serve as a forum for owners and residents to resolve issues or disputes in a consistent manner and thereby improve the understanding of each other's rights and obligations. Within a month of an issue being raised in writing by the residents' committee, a park owner will need to formally respond. The bill seeks to improve safety measures in parks. New section 138A provides all parks to be required to have a safety evacuation plan, which is to be provided to residents and annually reviewed.

The review undertaken by the government has taken into consideration the financial and legal consequences on all parties, including the need for residential parks to continue to remain an affordable housing alternative. The proposed regulatory requirements for park owners will be offset by providing them with increased security of income, as well as retaining the right to terminate an agreement on no specified grounds for site agreements under five years.

Consumer and Business Services will be updating and preparing additional resources for park owners and residents that clarify their respective rights and obligations. Several forums will be held for interested parties. Examples of best practice site agreements, park rules and disclosure statements will be made available, in addition to the ongoing support provided by the advice and conciliation officers at CBS.

The bill aims to strike a fair balance in protecting the respective rights of residents and owners and clarifying their obligations through enhanced disclosure of information. I particularly express my appreciation to members who have either themselves or with their staff attended and I think of the member for Finniss because he has the privilege of having three very large residential parks in his electorate. He was able to usefully inform me, with his adviser, that in fact these are much different from what we have considered in the debates in the past, which seem to be relatively temporary or small dwellings. Sometimes they are caravans or a small container or model home that simply has been placed.

In his salubrious electorate, they have beautiful brick homes built on these residential parks and so, unsurprisingly, when people go to view them when they are not being provided by the new tenant but are actually already there and they are buying the right to occupy them, prospective people inspecting these areas may well take the view that they think that they are going into a retirement village, and those entitlements, responsibilities and obligations are very different from those in residential parks, which is a situation of ownership by the park owner of the land and a right to occupy. So I am indebted to members such as the member for Finniss for helping me to understand the breadth and diversity of dwellings that now occupy these parks. If they are going to be an expanding market of accommodation, of dwellings, for South Australians we need to update this legislation.

I acknowledge that this bill has its genesis in the original work done under the previous government which we were supporting through this house. However, as indicated, it clearly was not a priority for the government because it was not concluded before the proroguing of parliament.

I commend the bill to the house and seek leave to have the explanation of clauses inserted in Hansard without my reading it. I encourage any members who have residential parks in their electorate to assist in the debate on this matter, the passage of the bill, and ultimately, hopefully, the explanation of its benefits back to their communities.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Residential Parks Act 2007

4—Amendment of section 3—Interpretation

This clause inserts a definition of personal representative and defines the concept of a short term residential park agreement.

5—Amendment of section 4—Presumption of periodicity in case of fixed short terms

This clause is consequential to the new general definition of short term inserted by clause 4.

6—Amendment of section 7—Residents committees

Subclause (1) requires certain park owners (defined in proposed subsection (8)) to ensure that there is a residents committee for the park. The penalty for failure to comply is $1,250 and defences are provided where reasonable steps to comply have been taken. Under the transitional provisions, the park owners will be exempt from the offence provision for 12 months after commencement.

Subclause (2) inserts a new subsection (2a) allowing the Tribunal to make a ruling where there is more than 1 group purporting to be the residents committee for a park.

Subclause (3) requires a park owner to consider representations made by a residents committee and provide a written response. The penalty for failure to comply is $1,250.

7—Insertion of section 9A

This clause inserts a new section clarifying that Part 3 applies to a residential park agreement whether it is the first agreement between the resident and the park owner or is a reissued or subsequent agreement between the parties.

8—Amendment of section 10—Residential park agreement to be in writing

This clause provides that a written agreement for a periodic tenancy, or a reissued fixed term tenancy, that has arisen by operation of the Act does not need to be signed (but in the case of a periodic tenancy must include the date, or approximate date, on which the resident was first granted the right to occupy the site (if known)) and also increases a penalty.

9—Amendment of section 11—Copies of written agreements

This clause increases a penalty.

10—Amendment of section 12—Agreements incorporate park rules

This clause requires that a written residential park agreement, or a document recording its terms, signed by a resident includes a copy of the relevant park rules and that residents are notified of any later amendments to park rules. The penalty for failure to comply is $1,250 or an expiation fee of $210.

11—Amendment of section 14—Information to be provided by park owners to residents

This clause requires the specified information to be given to a resident at least 14 days before they enter into the residential park site agreement (unless the agreement is for a short term and the resident has waived the entitlement) and requires additional information to be provided to the resident. The clause also increases the applicable penalties in the section and adds an offence of knowingly making a statement that is false or misleading in a material particular in information provided under the section.

12—Insertion of Part 3 Division 3

This clause inserts a new Division as follows:

Division 3—Continuation or reissue of certain agreements

17A—Agreement for fixed term continues as periodic agreement if not terminated

The current section 53 is being moved to this proposed new Division (with a minor change related to proposed section 17B).

17B—Certain site agreements to be reissued

A residential park site agreement for a fixed term of 5 years or more (or for a lesser fixed term if the resident has held a right of occupancy within the park for a total period of 5 years or more) will, if it has not terminated at or before the end of the fixed term and no notice has been given that a review will be required under proposed subsection (2), be taken to have been reissued on the same terms. Under proposed subsection (2), either party to such an agreement may instead give at least 90 days' notice that they want a change to the terms and, in such a case, there must be a review of the agreement and the agreement must be reissued on the newly agreed terms. The old agreement will continue until the new agreement is reissued.

If a resident under a periodic residential park site agreement has held a right of occupancy for a total period of 5 years or more, the park owner must undertake a review of the agreement (unless the resident has waived the entitlement) and, following the review, the agreement must be reissued for a fixed term agreed with the resident.

A review is not required under the section if the resident waives the entitlement by notifying the park owner that the resident does not want to occupy the site under a fixed term agreement or if either party has given notice of termination under Division 3 (noting the limitations being imposed on termination for 'no grounds' by other provisions of the measure).

Where the resident has waived an entitlement to a reissued fixed term agreement under the section the resident may subsequently re-enliven the entitlement and rights under the section will automatically re-enliven if the agreement is assigned under section 48.

A park owner who refuses or fails to comply with a requirement of the section is guilty of an offence punishable by a fine of $1,250 or an expiation fee of $210.

13—Amendment of section 48—Assignment of residential park agreement

This clause inserts new requirements relating to assignment of residential park site agreements. The resident must, at least 14 business days before assignment of the agreement to another person, advise the other person to contact the park owner to request the prescribed information (unless the resident believed on reasonable grounds that the other person had already contacted the park owner to request the information). The park owner, having received a request, must provide the person with the prescribed information within 7 business days. Failure to comply with either of these new provisions is an offence punishable by a fine of $1,250 or an expiation fee of $160 but does not invalidate the assignment.

14—Amendment of section 49—Residential park site agreement—acquisition of park or site

This clause deletes provisions that currently allow the new owner of a residential park to terminate residential park site agreements without specifying a ground of termination.

15—Insertion of section 50A

This clause inserts a new provision as follows:

50A—Sale of dwelling following death of resident

If the personal representative of a deceased resident, or another person who has inherited property of a deceased resident, intends to sell a dwelling that is on the site that was occupied by the deceased, they must inform the park owner of that intention and give the park owner a first option to purchase the dwelling. If no agreement is reached within 28 days, that option will lapse and the dwelling may be sold in the normal way.

16—Amendment of section 52—Termination of residential park agreement

This clause:

provides that a residential park site agreement for a fixed term does not terminate when a mortgage takes possession of the rented property under a mortgage (in section 52(d));

makes a minor amendment to ensure consistency of expression (in section 52(da));

limits the provision about termination due to the death of the resident (where no dependents are left in occupation of the property) to residential park tenancy agreements (in section 52(f); and

clarifies that, except as provided in subsection (1)(f) of the section, a residential park agreement does not terminate on the death of the resident.

17—Repeal of section 53

This section is being moved to new Part 3 Division 3.

18—Insertion of section 70A

This clause inserts a new section as follows:

70A—Termination where change of use or redevelopment

This provision will allow for termination of a residential park site agreement (after a specified notice period) where the residential park will no longer be used as such or where the residential park, or a part of it, is undergoing redevelopment that cannot be completed in a safe and efficient way unless the resident vacates the site. The provision requires, as a precondition to such termination, arrangements to be agreed in relation to relocation or purchase of the resident's dwelling on the site. If such arrangements cannot be agreed, either party may apply to the Tribunal for resolution of the dispute.

19—Amendment of section 71—Termination where periodic tenancy and no specified ground of termination

This amendment provides that an agreement for a periodic tenancy cannot be terminated for no specified ground if the resident has held a right of occupancy of the rented property for a period of 5 years or more.

20—Amendment of section 72—Termination at end of fixed term

This is consequential to proposed section 17B inserted by clause 12.

21—Insertion of section 78A

This clause inserts a new section as follows:

78A—Termination where notice given under section 70A

This provision is consequential to proposed section 70A and allows a resident who has been given a notice of termination by a park owner under that section to terminate at an earlier time without specifying a ground of termination (but with 28 days' notice).

22—Amendment of section 116—General powers of Tribunal to resolve disputes

This clause broadens the Tribunal's power to order a person to make a payment.

23—Amendment of section 134—Commissioner's functions

This clause allows the Commissioner to publish information relating to action taken by the Commissioner to enforce the Act.

24—Insertion of section 138A

This clause inserts a new section as follows:

138A—Park owner must have safety evacuation plan

This provision requires a park owner to have a safety evacuation plan for the park; to provide the plan to residents; and to review the plan annually. The penalty for failure to do so is a fine of $2,500 or an expiation fee of $210.

25—Amendment of section 141—Regulations

This clause amends the regulation making power.

Schedule 1—Transitional provisions etc

This Schedule contains the transitional provisions relating to the measure.