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COMPENSATION ISSUES

COMPENSATION ISSUES UNDER s38(1)(f) OF THE MANUFACTURED HOMES (RESIDENTIAL PARKS) ACT 2003.

This concern involves the issue of compensation under s38(1)(f) of the Manufactured Homes (Residential Parks) Act 2003 (the Act), for manufactured home owners who have their site agreements terminated by the Tribunal because the park owner ‘wishes’ to use the site for another purpose.

1). When the Act was framed, there was an abundance of vacant sites in caravan parks to which a manufactured home could be relocated, and the Legislators allowed for compensation by requiring that park owners pay all costs involved in relocating the home to another park (within 300km).

2). While the seeking of termination orders under section 38(1)(f) occurs exclusively (to this point in time) in mixed use parks, that situation may change to include purpose built parks in the foreseeable future.

3). The present situation, which alarms MHOA greatly, has been ignored since it was first raised in 2010 submissions by MHOA, and throughout a number of reviews of the Act since then.  

4). The situation is that here are two circumstances which were not present, and thus never considered by the Legislators in framing the original Act in 2003.These are:

a). coastal mixed use parks have become targets for developers wishing to put the land to a different, and more profitable, use; and

b). there have been changes in the residential park industry where:

i). purpose built villages have become the norm and as part of the business strategy, park owners market new homes to prospective residents, and thus do not accept relocated homes

ii). increased tourist /traveller activity, has caused owners of mixed use parks to find it more profitable to install rental cabins rather than provide sites for manufactured homes.

5). The situation, unseen by the original Legislators, is that the supply of sites to which manufactured homes could be relocated in the event of a termination order under section 38(1)(f) has virtually disappeared. MHOA has not been able to find any sites available to receive a relocated manufactured home in the whole of South East Queensland.

6). As Van der Rohe famously remarked, ‘The devil is in the detail’, and it is in the content of a number of subsequent sub-sections of ss38 and 39 of the Act that the inequity of s38(1)(f) lies. These can be summarised as:

(a) S38(2) - To apply for termination of a site agreement under s38(1)(f), the park owner only needs proof of the legality of the proposal e.g. a low cost ‘tick and flick’ development approval

(b) S39(1)(b)  - Once a termination order is given, vacant  possession must be given, even if there are no sites to which the home can be relocated.

(c) S39(4)(b)  - If the home cannot be removed for example if there are no relocation sites, then the only compensation available in in s39(5)

(d) S39(5)  - The only compensation is that the park owner must pay the cost of transport of the evicted owner’s personal goods, and also pay the cost of demolishing the home.

7). A further inequity is that s38(1)(f) only requires that the park owner state that he ‘wishes’ to use the site for another purpose – there in no requirement that he actually does change the use of the site after the home has been removed.

8). Nothing in the present compensation provisions of section 40 of the Act, allows for fair compensation under present circumstances, and home owners, especially those resident in mixed use parks, have an urgent need to be considered and provided for more equitably.

9). The reality is that if the Tribunal grants termination orders under section 38(1)(f), the owners of valuable manufactured homes, face a situation where no relocation  sites are available to which homes can be relocated (as was the solution envisaged under the original legislation) and they are faced with ether demolition of their home, or being forced into selling the home to the park owner for a likely fraction of its worth..

10). MHOA calls upon the Government to re-visit the issue of lack of comparable relocation sites and provide some realistic protection and/or provide stricter guidelines for granting termination orders under section 38(1)(f), to the many Queensland citizens who are facing, or will face in the future, destitution and homelessness in the face of the rental crisis.

Errol Way LLB – President MHOA Inc