Residential Parks (Model Agreement) Amendment Bill

Introduction and First Reading

The Hon. J.A. DARLEY (15:43): Obtained leave and introduced a bill for an act to amend the Residential Parks Act 2007. Read a first time.

Second Reading

The Hon. J.A. DARLEY (15:44): I move:

That this bill be now read a second time.

This bill seeks to clarify four aspects of the present regulatory regime operating in residential parks in South Australia by:

1. Mandating the terms and conditions of the model residential park agreement.

2. Including in the agreement a security of tenure for a term of 20 years with an option of a further 20 years, exercisable at the discretion of the tenant and transferable to another person with the right of a new lease with a 20 plus 20 option.

3. Stipulating rent increases at the annual prescribed rate—

(a) if CPI is 2 per cent or less, CPI plus 1.5 per cent (up to a maximum of 3.5 per cent); or

(b) in any other case, CPI.

4. Stipulating payment by a resident is for rent, statutory charges and a bond only, with the requirement to pay any deferred amounts in the lease agreement prohibited.

The South Australian Residential Parks Residents Association (SARPRA) is seeking these changes. To date, I understand that the regulatory regime has had bipartisan support. I have sought contact with the commissioner over the last few weeks but have been unsuccessful. The previous minister responsible could have made appropriate changes but may have had her priorities elsewhere. Hopefully, the presenting of these amendments to the Legislative Council will encourage the next government to give priority to these reforms.

In the present legislative regime, the model residential parks agreement is not mandated. The bill will require all existing agreements to transition to the model agreement to ensure uniformity and consistency. As at 17 June last year, there were some 2,284 homes in residential parks, with 99 parks registered with Consumer and Business Services. This is a growing affordable sector in the housing market. The further legislative certainty provided by this bill will avoid a growing number of cases going to SACAT from those park owners doing the wrong thing.

For those people wishing to downsize and free up capital, residential parks provide an option that is being taken up in increasing numbers. For some, this is a more attractive option than remaining in their existing dwelling or exploring other ideas such as a retirement village or a reverse mortgage. A person rents a site, or a site and a dwelling, from the park owner to use as their principal place of residence.

There are some purpose-built dedicated residential parks offering manufactured or transportable homes for residential living. There are also mixed-use caravan parks that may offer both long and short-term accommodation in a mixture of manufactured or transportable homes, caravan sites, tents and holiday cabins. The legislation does not cover holiday accommodation agreements or retirement villages, which are regulated under the Retirement Villages Act 2016.

Whilst residential parks may offer an attractive lifestyle in a lovely location, with the resident often owning the building, they will be renting the site on which it is located, hence the need for the 20 plus 20-year security of tenure. A structure may be transportable, but the cost to transport the structure can be significant. If there is a permanent dwelling on a residential park site, the resident has the right to sell the dwelling if they choose to leave the park.

In a sale situation, the ongoing transferable security of tenure is important. When a site, rather than a site and a dwelling, is leased, it may be for a fixed-term agreement or a periodic agreement. The security of tenure available in the model residential park agreement is important for the longer fixed term. Stipulating rent increases at the annual prescribed rate also provides certainty and fairness for all parties in a long-term fixed lease.

Prohibiting deferred payments requires all payments the park owner needs in his or her commercial model to be included in the rent payments. For example, the rent payments must include the cost of providing and maintaining common buildings and their fittings, fixtures and furnishings, gardens, internal roads and paths, rubbish collection and shared utilities. This allows a potential resident to easily understand all the costs of a particular residential park and compare and contrast the benefits and facilities and costs among the available parks and other options.

Accordingly, I commend the bill to the house to ensure increased certainty, security of tenure, predictable cost-of-living increases and transparency.

The Hon. E.S. BOURKE (15:50): I rise to speak on the Residential Parks (Model Agreement) Amendment Bill. I would like to thank the Hon. John Darley for bringing this matter to our attention in this house. Residential Parks in South Australia play an important role in providing affordable housing opportunities to the community and offer attractive lifestyle options for retirees.

The Residential Parks Act 2007 regulates the relationship between residential park owners and residents who live in residential parks as their principal place of residence. The act was originally designed to address issues arising from people residing in caravan parks in demountable, movable or inexpensive structures erected on the sites and rented from the park owner.

The type of residential parks that have developed since the commencement of the act are unlike those envisaged by the legislation. Some residential parks in South Australia 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 in these parks range from caravans with annexes to transportable and manufactured homes. Residential park living in South Australia is continuing to grow in popularity, as it is in the remainder of Australia. Residential parks can offer residents the security of living in a small community in cost-effective housing, often in a pleasant location.

When in government, Labor conducted a widescale review of the act. The review sought to make a number of improvements to the then laws that regulated residential parks. Feedback received indicated overwhelmingly that the primary concerns were insecurity of tenure, the absence or inadequacy of legislation requirements relating to the disclosure of information, safety in parks, and the payment of compensation. Labor conducted the review in consultation with key stakeholders, including the South Australian Residential Parks Residents Association, SA Parks, state government agencies and park residents.

The review sought to implement measures to provide a fairer and more transparent system for residential park residents and owners. As a result, Labor ensured that residents were provided with improved disclosure of information in the establishment of a residential park agreement. We increased the penalty on park owners if agreements were not put into writing and residents were not provided with a signed copy of the agreement together with a copy of written park rules. The review also resulted in a 14-day cooling off period to ensure that prospective residents have significant time to properly consider their agreement and obtain advice where necessary.

Labor understands the need to provide better protections to consumers. Labor did this by improving the security of tenure for residents in residential parks. Many of these people have invested significant amounts of money in their homes and deserve to have a greater level of security around their tenure. Labor fixed this.

When last in government, Labor oversaw many other improvements to the act, providing greater protections to residents living in residential parks. We on this side of the chamber know that we must continue to review legislation and improve protections where they are lacking. Once again, thank you to the Hon. John Darley for bringing this important issue to our attention. We look forward to reviewing your bill in detail and working with you to gain a greater understanding of the issues that you have raised.

Debate adjourned on motion of Hon. N.J. Centofanti.