New Act to commence 1 November 2015

On 7 August the final regulation for the Residential (Land Lease) Communities Act 2013 was released by Minister Dominello, the Minister responsible for Fair Trading. Mr Dominello announced that the new Act will commence on 1 November 2015. 

The Tenants’ Union of NSW is pleased to see that a number of concerns raised in our submission on the draft regulation have been addressed.

We said there should not be any exemptions to the requirement for new operators to undertake a mandatory education briefing on the law. The exemption has been removed.

We said that sewerage usage charges should not be separate charges payable by home owners and that the proposed method of calculation was too complex. 

Unfortunately the charges have been retained but the final regulation provides clarity. The charges can only be applied to sites where water is separately measured or metered but where sewerage is not. Also, water and sewerage services must be provided to the operator by a water supply authority that charges for water and sewerage separately and specifies a sewerage discharge factor. 

The new method of calculation for sewerage usage is: the metered water usage for the site multiplied by the sewerage discharge factor.

Sewerage discharge factors are set by water supply authorities and they are not all the same.

We said that ‘capable of flowing’ in relation to electricity did not have the same meaning as ‘supply’ and could lead to higher charges for home owners. The final regulation refers to supply.

We said that the penalties at clause 16 in the draft regulation were set too low and would not deter poor behaviour in operators. Some of the penalties have been increased.

We said the removal of restrictions on the sale of homes in old agreements was positive, but that it should be extended to include terms in agreements that prohibit the sale of homes. The final regulation removes the effect of any restrictions or prohibition on the sale of dwellings in site agreements signed prior to the commencement of this Act.

We said that the standard site agreement should not allow for site fees to be increased ‘in accordance with variations’ in the Age Pension. Our concern was that such terminology would allow for an agreement where the full pension increase would go directly to the operator as a site fee increase every time the pension was raised.

The clause now provides that increases may be a percentage of the increase in the Age Pension. The Tenants’ Union is uncomfortable with a provision that links site fee increases to the Age Pension and we would caution home owners against agreeing to such terms however, the final regulation is an improvement on the draft.

We said that the regulation should provide limitation periods for Tribunal applications to avoid the default time limit of 28 days set by NSW Civil and Administrative Tribunal rules. The final regulation provides for sensible time limits for a number of applications.

The final regulation clarifies and improves many of the provisions in the draft regulation but the Tenants’ Union believes further changes were necessary. In particular, the standard site agreement still does not reference the right to assign and this is disappointing.

There is also a new term in the standard site agreement that enables site fees to be set at a percentage of the Age Pension. There is potential for conflict between this clause and provisions of the Act relating to site fee increases so this is one to watch out for.

A full copy of the final regulation can be downloaded from the NSW Government legislation website here.