Residential Parks (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 4 December 2018.)

The Hon. C. BONAROS (16:00): I rise to speak in support of the Residential Parks (Miscellaneous) Amendment Bill 2018 on behalf of SA-Best. As everybody in this chamber would know, our party has been a strong and often lone advocate for people who live in residential parks. Members may recall that in 2014 Nick Xenophon fought a David and Goliath battle to get justice for the 40 devastated residents who were facing—

The Hon. R.I. Lucas: Was he David or Goliath?

The Hon. C. BONAROS: Well, in this instance, it did not quite go our way—forced eviction from their homes at the Brighton Caravan Park by the Holdfast Bay council and, ultimately, the residents made the decision to take their fight to court. In the end, notwithstanding Nick and others' pro bono legal representation of the residents, Goliath won. The residents, I suppose, were forced into settling without compensation, because the only other prospect they faced was that of drawn-out litigation and the risk of the associated costs order being made against them. So it was one of those situations where, unfortunately, despite our will to go as far as possible, it just became impossible to do so.

The residents of that Brighton Caravan Park ultimately paid a very hefty price in terms of their health and also their financial losses. In many cases, the residents had paid some tens of thousands of dollars to buy what were permanent fixtures in the caravan park, their investment in their often humble but affordable homes, based on representations made to them by the residential park owners. We are therefore very pleased to have this bill, first introduced by the previous government in 2017 and now tabled in the Legislative Council, albeit with substantial seemingly endless amendments from the government and the opposition before us.

The Brighton Caravan Park debacle demonstrated the need to better regulate the relationship between residential park owners and residents. As we know, the bill aims to provide a fairer and more transparent system for both parties by providing for clarity around residential agreements, the termination of those agreements for redevelopment, increased disclosure to all new residents, improved security of tenure for residents and increased penalties for park owners who do not comply with their obligations.

A suite of additional protections for residential park residents, including written agreements with a two-week cooling-off period and provision for the residents to obtain legal advice about the agreement they are intending to enter into, address the issues raised by the South Australian Residential Park Residents Association (SARPRA), SA Parks and Consumer and Business Services. We are particularly supportive of the provisions of the bill that provide for residents of more five years to have their agreements reviewed on expiry and reissued on the same or on new terms.

Park owners will also have to give residents 90 days prior to the expiry of a fixed-term agreement if they are going to terminate the agreement, instead of just having to give residents their marching orders in the heavy-handed way that we saw at Brighton.

We support some of the amendments. Again, I note there are a number of amendments that we are going to have to work our way through, but can I commend both the government and the opposition for what I understand will eventuate in terms of finding some middle ground on these amendments. Certainly, we have met with both the government and the opposition and made it our position that we would like to find some middle ground on those issues. I understand that is what we will be working towards very shortly. I suppose those efforts have gone some way towards striking a better balance, if you like, between protecting the rights of residents and owners.

We welcome the protections afforded to residents in the event of them selling, or their estates selling, their interests upon a resident's death. Residential park owners will have the advantage of a first option to purchase but will not be able to exploit or unfairly take advantage of families or residents who may not know the value of the interest that they hold. That is a particularly important aspect of this legislation. The amendments also make it clear that the resident or their estate do not have to sell to the park owner, if they so decide. Again, that is another important aspect of this legislation.

Importantly, if the residential park is sold, then the new owner cannot terminate a resident's agreement except on very specific grounds. If a park closes, there are much improved provisions for residents regarding relocation. The bill makes it clear that the park owners cannot charge the residents for that relocation. Again, that is a very important inclusion in this bill.

We want to make sure that residential park residents never have to engage in a Castle-like battle ever again. However, if they do find themselves in this situation—and I hope that they don't—this bill gives SACAT jurisdiction to adjudicate any intractable disputes, which I think we all would agree is a much better and certainly much more cost-effective option than litigation through the courts process.

We believe that residents' committees are much needed and the requirements for park owners to respond to the concerns of those committees within the month is another positive enhancement.

In considering this bill, we have been surprised to learn that no-one really knows how many residential parks there are in South Australia. That is certainly a question that I have asked at all briefings or at all meetings that we have had. It is not an answer that we have been able to obtain.

I think the opposition's suggestion in terms of a requirement for the Commissioner for Consumer Affairs to maintain a register of parks and keep it updated gives much-needed and greater oversight of the residential parks industry. How those provisions will ultimately look will of course depend on which amendments are accepted and which are not, but we certainly, for the record, indicate the establishment of a register which would enable us all to have access to that information. With those words, I indicate SA-Best's support for the bill.

The Hon. R.I. LUCAS (Treasurer) (16:07): I thank the honourable members for their contributions to the bill and look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. K.J. MAHER: I move:

Amendment No 1 [Maher–1]—

Page 3, after line 21 [clause 4(2)]—Insert:

(6) A reference in this Act to the market value of a dwelling or other asset is a reference to the estimated amount for which the dwelling or asset should exchange, at the relevant time, between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

This is an amendment that I think the Hon. Connie Bonaros spoke to in her second reading contribution. It relates to making sure that when a dwelling is put up for sale after a resident dies that there is not the possibility of an unscrupulous park owner taking advantage of a grieving family and buying something well under market value. It inserts into the act that the dwelling must be at a market value agreed between the person or a representative of the person selling and the park owner.

This amendment needs to be read in conjunction with amendment No. 1 [Treasurer-1], which states that for the avoidance of doubt that nothing in this section obliges the selling of the property to the park owner. With that amendment from the government that the opposition is prepared to accept, we think that covers the field quite well and the two amendments work well together, protecting residents and park owners' families as well as making sure that it is clear that there is no obligation to sell to resident park owners. I commend our amendment to the chamber and also indicate support for the government amendment which we think does no harm and which, as it says, for the avoidance of doubt, just in case there was any, makes it very clear.

The Hon. R.I. LUCAS: I think we might need a bit of cooperation to get through this particular committee stage, Mr Chairman, and I offer my willingness to cooperate. In relation to this particular amendment, which is amendment No. 1 [Maher-1] as I understand it, clause 4, page 3, the government's position is that we are opposing this particular amendment for the following reasons: this amendment seeks to—

Members interjecting:

The Hon. R.I. LUCAS: You thought we were supporting it? Let me take some fresh advice. I am advised that the government's position is that we are opposing this particular amendment, but we will move an amendment to clause 15, which I understand there will be support for. My understanding is that, whilst we oppose this particular amendment, we are unlikely to have a majority in the committee, therefore this particular amendment from the Leader of the Opposition is likely to prevail. If that is the case, our amendment to clause 15 sits comfortably with this particular amendment should it be successful.

For the record, I indicate that I am advised that the government's position is to oppose this particular amendment for the following reasons. The amendment seeks to define market value. It is related to amendment No. 7 of these amendments, and I speak to them together. The government acknowledges the concern of some residents regarding the proposed section 50A, clause 15 of the bill. However, it is important to note that, while the new section 50A provides the park owner with the first option to purchase a dwelling from a resident's estate, it does not diminish the rights of the resident's estate to occupy, sell or assign a dwelling in any way in that the estate is entitled not to accept the offer.

The effect of market value being included in amendment No. 7 restricts the rights of a resident's estate to sell a dwelling in any way it thinks fit under proposed section 50A, for example, if the estate agrees to sell the dwelling to a family member at a price below market value. The proposed section 50A has been included in the bill as a balance to provide an opportunity for the park owner to purchase the dwelling from the resident and regain ownership of the site if the estate decides to sell the dwelling. However, section 50A also ensures that the estate has full protection and control over what occurs and is not obliged to sell the dwelling or accept any offer made by the park owner.

If the park owner does not make an offer or the estate does not agree with the amount of the offer within 28 days, the park owner's option to purchase will lapse and the dwelling can be sold on the open market as usual. The amendment as proposed causes complexities around the calculation and assessment of market value, particularly where parties do not agree to the estimated market value offered. This could go to SACAT, which would have to make a determination on this definition of market value.

The Hon. C. BONAROS: Can I clarify for the record that, in supporting [Maher-1] and supporting [Treasurer-1], we overcome the issue that the Treasurer has highlighted. What we have is a situation where there are two groups: one says that we should insert the definition of market value into the bill and the other says that we should not. The Treasurer's amendment seeks to rectify the problem that he says the [Maher-1] amendment creates; is that correct?

The Hon. R.I. LUCAS: I am advised that, yes, we have inserted it to clarify the issue highlighted in the concerns that we have expressed about the amendment moved by the Leader of the Opposition, [Maher-1]. My advice is that, if this amendment is successful, the amendment I move later on to clause 15 sits comfortably with it in terms of endeavouring to resolve the issue.

The Hon. K.J. MAHER: I thank the minister for his words on this. As I indicated earlier, should this be successful, we will support the government's amendment. Something may have been lost in translation somewhere; it was my understanding that the government was going to support the opposition's amendment and the opposition was going to support the government's amendment. As the Leader of the Government has indicated, it looks like that will be the effect of what is going to happen anyway, but we might need to get some more clarification later on. I think it could get very tricky if the understanding that people have come to in relation to this is not the case as we go further on and withdraw and substitute amendments on the basis of discussions, if that is the understanding that we thought we had come to.

The Hon. C. BONAROS: Can I just clarify also that if amendment No. 1 [Maher-1] were not to be successful, then would the government still be proposing to insert amendment No. 1 [Treasurer-1]—no?

The Hon. R.I. LUCAS: My advice is that if this amendment was not successful we would still be proposing to move the amendment [Treasurer-1] to clause 15 to clarify or to avoid any doubt at all in relation to the issue.

The Hon. M.C. PARNELL: Just to assist the committee, unless some radical new information emerges in the next few minutes, the Greens' intention is to support amendment No. 1 in the name of Kyam Maher and also to support the Treasurer's amendment to clause 15 when we get to it, because we have now been assured that they do work comfortably together.

The Hon. J.A. DARLEY: I indicate that I will be supporting [Maher-1], although from a practical point of view I think it will not work because in dealing with these sorts of things the value of the improvement could in a lot of cases be zero, and when they are sold the reason it is zero is because the purchaser wants to shift it, so the cost of shifting equates to the value of the property. But I will be supporting the Treasurer's amendment.

Amendment carried; clause as amended passed.

Clause 5 passed.

Clause 6.

The CHAIR: We now come to clause 6. We have amendment No. 1 [Maher-2] and we have amendment No. 2 [Maher-1]. So, Leader of the Opposition, if you can just clarify for members' and my benefit, which one we are proceeding with?

The Hon. K.J. MAHER: If you give me a moment I will explain the reasons. I am proposing not to move amendment No. 2 [Maher-1] but instead move amendment No. 1 [Maher-2]. But I will be continuing with numbers 2, 3 and 4, which all work together. We have already moved amendment No. 1 [Maher-1]. I will not be moving amendment No. 2 [Maher-1]; in its place I will be moving amendment No. 1 [Maher-2], if that makes it clear.

The CHAIR: For the benefit of the chamber on the last day of the last afternoon, Leader of the Opposition, as I understand it you are not going to move amendment No. 2 [Maher-1].

The Hon. K.J. MAHER: No, I am not. This may be an easier way of explaining. What I had intended to do was move amendment No. 2 [Maher-1], amendment No. 3 [Maher-1], amendment No. 4 [Maher-1], which all deal with the same topic; that is, an election of a residents' parks committee. On getting further drafting advice, I am not going to move the first of that set of three; that is, amendment No. 2 [Maher-1], but in its place move amendment No. 1 [Maher-2]. So what I will be moving is amendment No. 1 [Maher-2], that is the first one in my second set of amendments, which then should be read in conjunction with amendment No. 3 [Maher-1] and amendment No. 4 [Maher-1]. Has that made it clearer, Mr Chairman, on the last day of sitting?

The CHAIR: Yes.

The Hon. K.J. MAHER: I move:

Amendment No 1 [Maher–2]—

Page 3, after line 27—Before subclause (1) insert:

(a1) Section 7(1)—delete 'form' and substitute:

be elected to form

In effect, these amendments clarify that a residents' committee must be elected by residents and not simply appointed by a park owner. This is after significant consultation with the South Australian Residential Parks Residents Association. The amendments also outline the term of appointment of a residents' committee for one year and also provisions for an election, the function and procedure to be made by regulation.

As I said, the amendments came after consultation with the South Australian Residential Parks Residents Association, which was concerned that, unless the residents themselves got a say in who was elected, it could be up to a park owner to appoint those who only agreed with them and not necessarily a diverse and proper view of the residents. In saying that, there is no suggestion that there is a park owner who would stack a committee to just agree with their views. However, as we know, we do not legislate for the best case scenario, we legislate to make sure we take account of possibilities and future scenarios.

The Hon. R.I. LUCAS: As the minister responsible for the bill, I am extraordinarily uncomfortable with the process that we are going through. I have no criticism of the Leader of the Opposition.

The Hon. T.J. Stephens: You could. Get into him!

The Hon. R.I. LUCAS: No, I will not. I am intending to report progress on this particular bill. I think the way we are currently going through it is a recipe for disaster. Clearly, on some of these amendments, the leader has had discussions, or people representing the leader have had discussions with people representing the government, and has a different understanding of the agreement that the government and the opposition had arrived at. It is different to the instructions I have in the file in front of me. I think good process would be that we report progress.

I would hope that when we come back in February the leader might consolidate his amendments into a new set of amendments where he jettisons the ones that he no longer has and, similarly, we as the government understand what his amendments are, and we can have ours equally lined up in a clear and methodical fashion so that all members can understand where we are coming from and what we are voting on.

I think it is too important to be going through the process that we are going through at the moment. I apologise to the council. It was a good endeavour to try to get it through. I must admit, when we started the day, I did not think we were going to handle the bill today because of other pressing priorities, but members seemed to indicate a willingness to proceed and we were happy to proceed, but I am unwilling, as Leader of the Government, to proceed on the basis that we have at the moment. With those words, I move that we report progress.

Progress reported; committee to sit again.