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Manufactured Homes in QLD - Legislation and Recent Changes

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 Manufactured Homes Legislation and Recent Changes

Manufactured Homes and residential parks have been fairly well regulated in Queensland since the commencement of the Manufactured Homes (Residential Parks) Act 2003 with prescribed forms, on-going reviews and proposed amendments by the Queensland Government since its inception. 1 October 2017 signified the commencement of the new Manufactured Homes (Residential Parks) Regulation 2017 (Qld). Section 3 of the new Manufactured Homes Regulation is a significant change to previous regulations because it now sets out 19 categories of “special terms” applied in part 3 of a Form 2: Site Agreement which are considered “prohibited special terms” for the purposes of section 25B of the Manufactured Homes (Residential Parks) Act 2003 (Qld).

Previously regulations in this area had not specified prohibited special terms to this extent, but further regulation was deemed necessary to ensure that owners of Manufactured Homes are not subjected to particularly onerous terms and that transparency and further obligations are imposed on park owners so that Manufactured Home owners are not mislead or taken advantage of under these specific terms which are imposed on their residency within the development.

The categories of “prohibited special terms” cover things such as; a special term that states that a rental increase is calculated in accordance with the consumer price index but the rental increase effectively includes additional charges, terms that require a home owner to gain the consent of the park owner before the home owner complies with a requirement under law, terms that restrict or prohibit an alteration to a home that is not visible from the outside of the home, terms that state that the park owner does not warrant that the site is suitable for use as the site of a manufactured home, or a term that states that the park owner may exclude a person from being approved to reside in the residential park without having reasonable grounds for the exclusion, amongst a number of other specific regulations.

Park owners will now need to ensure that if such terms exist in their Form 2: Site Agreements that they do not attempt to enforce such terms moving forward, as well as reviewing the terms in any new site agreements being executed to ensure that these do not include such terms. Should Park Owners contravene this regulation it is an offence under Section 25B of the Manufactured Homes (Residential Parks) Act 2003 and penalties are imposed. Home Owners now have greater protection under this new regulation, which will be welcomed by many investing in this type of property and residing within these residential parks.

The Housing Legislation (Building Better Futures) Amendment Act 2017 was also passed by the Queensland Parliament on 25 October 2017 and assented to on 10 November 2017 and contains amendments to the Manufactured Homes (Residential Parks) Act 2003 to increase transparency in the relationships between park owners and their staff and home owners, and to strengthen consumer protections and provide more security to home owners of Manufactured Homes

The changes will also result in improved pre-contractual disclosure processes when purchasing a Manufactured Home which will introduce a 21-day waiting period to ensure prospective home owners have time to consider information provided by park owners and will receive documents in stages, have time to shop around and seek expert legal and financial advice before they sign the contract, and will also sign a site agreement that contains a no-fault cooling-off period that may be used to terminate the agreement if required.

Amendments will impose a limit of rent increases under the site agreement to one per year, and increase the transparency of market rent review calculations, and prohibit administrative fees for provision of utilities, including meter reading. A more specified process for in-park dispute resolution will also be included, prescribing how these matters may be handled internally before being escalated to the Queensland Civil and Administrative Tribunal. Importantly, for the safety of residents within these residential parks, upcoming changes in the provisions of the Manufactured Homes (Residential Parks) Act 2003 will help ensure that emergency services and health care workers have access to residential parks at all times, with specific emergency management plans are in place.

As with the changes instigated recently under the Manufactured Homes (Residential Parks) Regulation 2017 (Qld), the amendments to the Manufactured Homes (Residential Parks) Act 2003 will be welcomed by new purchasers of Manufactured Homes, and those home owners already residing in these residential parks, providing further security in their investment and in the on-going lifestyle benefits offered by these ventures.

Manufactured Homes and the development of purpose built residential parks is certainly gaining increased momentum in Queensland, with key developers in this space currently having multiple sites under construction. The impact of increasing popularity and consumer demand for these Manufactured Homes will certainly make this area of property investment one to watch in the coming years! Astute buyers of Manufactured Homes should ensure they seek legal advice in the early stages of considerations to purchase, and these should be sought from a lawyer well versed in these matters given the complexities and increased regulations in this niche area of property investment.

Article by Ruth Nean; Associate of MBA Lawyers, Varsity Lakes, Queensland, February 2018

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