Long Term Tenants in Caravan Parks – Change is on the horizon

  •  Amendments to the Residential Parks Act 2007 will have significant implications on owners and managers of caravan parks.
  •  If you are responsible for a caravan park that has long term tenants then you will need to review your management processes, site agreements and park rules amongst other things to ensure compliance.

Residential Parks (Miscellaneous) Amendment Bill 2018

The Residential Parks (Miscellaneous) Amendment Bill 2018 (Bill) was recently introduced into Parliament to amend the Residential Parks Act 2007 (Act).

The Act commenced in 2007 and was designed to regulate the relationship between residential park owners and people who live in parks as their principal place of residence.

Prior to the introduction of the Act there was a level of uncertainty as to the rights of long term tenants in caravan parks and some debate regarding the possible application of the Residential Tenancies Act 1995 (SA) in certain scenarios. It was not uncommon for lawyers for Councils or park owners to be asked to advise on this issue.

The Act was originally designed to address issues arising from people living in caravan parks in moveable, inexpensive structures on rented sites.

There has been an acknowledgement that since the introduction of the Act that housing structures have evolved to the extent that some residential parks now offer purely long term living in constructed or manufactured homes, while others are a mix of tourist accommodation and dedicated areas for residential living.

The types of dwellings range from caravans with annexes, cabins, permanent safari tents and transportable and manufactured homes.

In some places the parks have evolved into semi retirement villages, while in others they have become tourist based parks with world class facilities catering for families, backpackers and sophisticated international travellers to our shores.

Many Councils have outsourced the management of the parks to commercial professional tourist park operators pursuant to commercial leases or management agreements. The arrangements are often long term (21 plus years) justifying the expense for operators to install new cabins, safari tents, camp kitchens, dining areas and recreational facilities such as pools, playgrounds and jumping pillows. This infrastructure often includes new accommodation for short and long term stays.

In March 2016 a discussion paper (Paper) was released seeking consultation on ways to improve the current laws.  The Attorney General advised in her speech to Parliament introducing the Bill that “the feedback to the Paper highlighted concerns around the insecurity of tenure, and the absence of any legal requirement for park owners to disclose certain information or to provide compensation for residents”.

According to the Attorney General, the Bill would ‘see a fairer and more transparent system for residential park residents and owners. The Bill aims to strike a balance between protecting the rights of residents and the investment in their homes, and the interests of park owners to support the growth of their parks’.

Residential park living is growing in popularity as it presents an affordable arrangement, often in scenic rural or coastal settings. However, tenants often wrongly expect they can reside on site throughout their retirement, whilst the terms of site agreements generally do not make provision for this.

Misunderstandings regarding the form of tenure, insecurity of tenure, inadequate disclosure of information prior to purchase, safety in parks and the payment of compensation has been the primary concern for arrangements between park owners and residents. The Bill seeks to provide clearer rights and obligations for the owners and the residents.

What does this mean for park owners?

  1.  Park owners will now be required to provide a written agreement and the residential park rules to its residents.
  2.  A two week cooling-off period will be introduced to ensure that prospective residents have sufficient time to properly consider their agreement and obtain legal advice.
  3.  Residents who occupy a site for more than than five years  can have their agreements reviewed upon expiry and reissued on the same or new terms.
  4.  Park owners will need to give residents 90 days’ notice prior to the expiry of an agreement if they are intending to seek revisions to the agreement. However, park owners will reserve the right to terminate an agreement on no specified grounds for site agreements under five years.
  5.  The Bill will also require residents’ committees in parks with more than 20 long-term residents. This will serve as a forum for owners and residents to resolve issues or disputes. Within a month of an issue being raised in writing by the residents’ committee, the park owner will need to formally respond.
  6.  In order to promote safety in parks, a safety evacuation plan is to be provided to residents and annually reviewed.

We understand that the Government has considered the financial and legal ramifications on all parties under these new requirements. As there is a need for residential parks to remain an affordable housing alternative, the proposed requirements for park owners were designed to offset  the costs by providing parks with increased security of income.

Councils who own caravan parks (especially those with long term tenants) will need to ensure they understand the implications of the changes and update site agreements, park rules and disclosure statements. It is essential that the managers and lessees of the parks also understand the changes and be ready to comply when they come in.

This article was written by Partner, James McEwen

Practice Area: Local Government , Property, Leasing & Conveyancing , Corporate, Commercial & Business

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