REVIEW OF THE
HOLIDAY PARKS (LONG-TERM
CASUAL OCCUPATION) ACT 2002
REPORT
NOVEMBER 2008
TABLE OF CONTENTS
EXECUTIVE SUMMARY .................................................................................................................. 3
BACKGROUND TO THE REVIEW ..................................................................................................... 4
SUMMARY OF THE REVIEW PROCESS ............................................................................................. 4
OVERVIEW OF SUBMISSIONS RECEIVED ........................................................................................ 5
OBJECTIVES OF THE ACT ............................................................................................................. 5
EFFECTIVENESS OF CURRENT TERMINATION PROVISIONS ............................................................... 8
USE OF TERMINATION PROVISIONS BY PARK OWNERS AS RETALIATION ......................................... 11
CLOSURE OR REDEVELOPMENT OF A PARK ................................................................................. 12
OCCUPATION FEE INCREASES ..................................................................................................... 13
REQUIREMENT TO MOVE SITES AND EFFECT ON OCCUPATION FEES............................................... 14
PAYMENT OF INGOING FEES AND SECURITY OF TENURE................................................................ 16
PARK RULES FOR LONG-TERM CASUAL OCCUPANTS .................................................................... 17
USE OF A VAN BY GUESTS OF AN OCCUPANT ............................................................................... 18
OTHER ISSUES........................................................................................................................... 20
SELLING ON SITE ....................................................................................................................... 20
ISSUES RELATING TO THE LEGISLATION ....................................................................................... 22
LEGAL STATUS OF INFORMATION FOR PROSPECTIVE OCCUPANTS ................................................. 22
MATTERS IN DISCLOSURE DOCUMENT WHICH ARE COVERED BY THE ACT ...................................... 23
LEGAL CONTRACT ISSUES .......................................................................................................... 23
RECOVERY OF POSSESSION ....................................................................................................... 24
REVIEW FINDINGS AND CONCLUSIONS ......................................................................................... 25
LIST OF RECOMMENDATIONS ...................................................................................................... 25
2
EXECUTIVE SUMMARY
The purpose of this report is to document the outcomes of a statutory review
of the Holiday Parks (Long-term Casual Occupation) Act 2002.
The report fulfils the requirements of section 54 of the Act to undertake a
review of the legislation to determine whether the policy objectives of the Act
remain valid and whether the terms of the Act remain appropriate for securing
those objectives.
In summary, the review has concluded that the legislation is still
fundamentally sound and that the policy objectives of the Act remain valid.
The review has further concluded that the legislation could be improved with
some refinements in a number of areas to help meet the Act’s objectives,
clarify some matters and remove inconsistencies.
3
BACKGROUND TO THE REVIEW
The Holiday Parks (Long-term Casual Occupation) Act 2002 was developed
to specifically address the unique circumstances that arise in holiday parks
where families own their own van which they keep on a site in a park for
casual or holiday use at various times during the year. The Act was assented
to on 20 November 2002, and commenced on 28 February 2003.
The Act sets out the rights and responsibilities of van owners and the holiday
park operator and provides a number of consumer protections, including
minimum notice periods for site occupation fee increases and terminations
and a dispute resolution system for when things go wrong.
The Holiday Parks (Long-term Casual Occupation) Act 2002 has a statutory
review requirement under section 54. This provision requires the Act to be
reviewed to determine whether the policy objectives of the Act remain valid
and whether the terms of the Act remain appropriate for securing those
objectives.
SUMMARY OF THE REVIEW PROCESS
Preliminary research and consultation was undertaken to identify issues
relevant to the review. These issues, as well as various suggestions which
had been raised with the Minister for Fair Trading and Office of Fair Trading
by individuals and organisations affected by the legislation, were taken into
account in the preparation of a discussion paper. This paper was released for
public feedback and comment on 1 October 2008, with the closing date for
submissions being 24 October 2008.
The discussion paper listed 15 questions relating to the identified issues
discussed, and added a more general question inviting comment on any other
relevant issues not raised in the paper.
The release of the Discussion Paper was advertised in the Coffs Coast
Advocate, Illawarra Mercury, Newcastle Herald and Northern Star –
Lismore/Ballina in the second week of the school holidays in October 2008,
and also promoted on the Fair Trading website, where there was also a
hyperlink to enable people to lodged their submissions online. A media
release was issued by the Minister for Fair Trading. Thirty-five copies of the
discussion paper were sent directly to identified stakeholders, government
departments, groups of local councils, industry groups and interested
consumer groups.
In all, 46 discussion papers were distributed in hard copy, and the discussion
paper on the website had received 298 visits by the closing date for
submissions.
4
OVERVIEW OF SUBMISSIONS RECEIVED
There were 43 formal submissions received during the course of the review.
The origin of submissions was as follows:
Individual long term casual park occupants ………..
Occupants’ groups ……………………………………
Park owners - private …………………………………
Park owners - local government …………………….
Industry groups ………………………………………..
Tenancy advocates …………………………………...
Government ……………………………………………
Other ……………………………………………………
27
4
2
2
1
3
2
2
(63%)
(9%)
(5%)
(5%)
(2%)
(7%)
(5%)
(5%)
NOTE: Percentages are rounded.
OBJECTIVES OF THE ACT
The discussion paper noted that the Act does not list its objectives, although
the long title states that it is to “set out the rights and obligations of long-term
casual occupants of holiday parks and the park owners.” The Minister’s
second reading speech given during the Act’s passage through Parliament
indicated that the Act also aims to provide an appropriate level of regulation to
address common problems, provide for dispute resolution and clarify the
parties’ legal status.
OBJECTIVE 1
SETTING OUT RIGHTS AND OBLIGATIONS OF LONG-TERM
CASUAL HOLIDAY
OWNERS
PARK
OCCUPANTS
AND
PARK
Current Provisions
The Act sets out the rights and obligations of long-term casual holiday park
occupants and holiday park owners in relation to various aspects of holiday
park occupancy. Among other things, the Act provides for:
•
disclosure of relevant information to prospective occupants;
•
requirements about written occupation agreements, including standard
agreement terms;
•
notice of fee increases;
•
ending an occupation agreement and dealing with goods left behind;
•
notice of park rule changes;
•
receipts for occupation fees;
•
charges for water and electricity; and
•
dispute resolution by the Consumer, Trader and Tenancy Tribunal.
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Analysis of submissions
Some park owners believed that it is not necessary to have legislation setting
out rights and obligations. They said it interferes in the flexibility a park owner
and casual long-term occupant have in agreeing on contracts, and that some
occupants believe they have specific rights that are in fact not included in the
Act. These operators were chiefly concerned that future changes to the
legislation do not limit their business transactions further.
Occupants generally did not have very much to say on this general matter,
with their comments being more about specific areas discussed later in this
report. However, the nature of the comments made seems to indicate that
occupants appreciate the need for legislation setting out the rights and
obligations of both parties, even if only at a basic level.
A number of occupants’ submissions compared the situation of the holiday
park occupant with that of the residential park resident regarding issues such
as compensation if the occupant is required to relocate or if the park closes.
Findings and recommendations
The review found that this objective is still valid, and overall the Act is effective
in setting out the rights and obligations of the parties, even though there is
some disagreement as to what those rights should be. Comments later in the
report suggest specific ways in which contributors suggested this
effectiveness may be improved.
The review recognises that the same park can have both full time residents
and long-term casual occupants at the same time, and they may converse
with each other, possibly confusing their rights. It may not be clear to casual
occupants that the amount of protection offered to residential park residents is
due to the fact that the park is their home and, should these arrangements
fail, there may be a very real danger of their becoming homeless.
The review also noted that some rights and obligations, such as those relating
to fee increases, receipts and termination of agreements, are set out in the
standard occupation agreement terms in Schedule 1 to the Act, rather than in
the body of the Act. This may make it difficult to find the relevant provisions in
the legislation.
In summary, it is recommended that:
•
The rights and obligations of occupants and park owners be set
out in the main body of the Act, rather than only in the standard
agreement terms set out in Schedule 1.
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OBJECTIVE 2
REGULATING
TO ADDRESS COMMON PROBLEMS AND
PROVIDING FOR DISPUTE RESOLUTION
The discussion paper for this review noted that the Act includes a range of
measures to respond to problems that were being experienced by long-term
casual park occupants and park owners.
The Act addressed these problems by requiring occupation agreements to be
in writing, providing for certain information to be given to prospective
occupants and giving jurisdiction to the Consumer, Trader and Tenancy
Tribunal to deal with disagreements and disputes which involve or could
involve a breach of the occupation agreement. There were 101 applications
to the Tribunal about holiday parks disputes in 2007-08.
Analysis of submissions
Park owners and casual occupants generally appreciated the availability of
the Tribunal for resolving disputes between park owners and occupants and
providing remedies about breaches of occupation agreements.
The Tenants’ Union suggested that the Tribunal’s jurisdiction in these matters
should be extended to all disputes and not just those that involve a breach or
a potential breach of the occupation agreement.
Findings and recommendations
The range of orders the Tribunal is able to make is considered sufficiently
broad, in that it can consider any disagreement which could form the basis of
a breach of an occupation agreement. The suggestion to extend the
Tribunal’s jurisdiction to disputes other than those which relate to breaches of
the occupation agreement would give holiday park occupants rights greater
than those of residential tenants and permanent park residents, and is not
supported.
In summary, it is recommended that:
•
The current provisions be retained.
OBJECTIVE 3
CLARIFYING THE LEGAL STATUS OF THE PARTIES
The Act resolves previous uncertainty about long-term casual occupants’ legal
status, by making it clear they do not have the status of tenants or park
residents. The Act also requires occupation agreements to be in writing and
include certain prescribed terms.
Analysis of submissions
From the submissions it appears that the Act has reduced the confusion and
most casual occupants know that they do not have the same rights as
residential park residents.
7
A number of park owners’ submissions noted that, since the commencement
of the Act, some casual occupants have believed they should have rights
similar to those of residential park residents or residential tenants, even
though the park is not their home. These submissions also noted that some
occupants held the view that, due to the length of time they had been in the
park, they had a right to permanent tenure over their site.
Occupants’ submissions generally demonstrated awareness that the nature of
their arrangement with the park owner is one of renting the site only.
However, many submissions raised concerns about lack of security of tenure,
particularly given the cost of removing or relocating the moveable dwelling.
Findings and recommendations
To reduce potential confusion about long-term casual occupants’ tenure
rights, the review suggests that the disclosure requirements in the Act be
expanded so that prospective occupants are informed that the occupation
agreement is a temporary leasing agreement only, and could be ended once
the fixed term has expired.
The review notes that similar confusion about tenure rights had in the past
arisen in residential park arrangements, and that these were addressed by
requiring prospective residents to be informed about the leasehold nature of
the arrangement.
In summary it is recommended that:
•
The disclosure document required to be given to prospective
occupants include a statement clarifying that the agreement is a
leasing arrangement only and could be terminated.
EFFECTIVENESS OF CURRENT TERMINATION PROVISIONS
Current provisions
After the fixed term of an occupation agreement runs out, the agreement
generally continues on an ongoing basis until it is terminated. In these
circumstances, notice can be given by either party to end the agreement
without any reason being stated. Under the termination provisions in
Schedule 1, an occupant must give the park owner 30 days notice, while a
park owner must give an occupant three months notice. These differing
notice periods reflect the different impacts a termination notice has on the
respective parties and ensure that the occupant has time to make
arrangements to relocate.
The review has noted that there are two areas of apparent inconsistency in
the Act’s termination provisions. In Schedule 1 to the Act, there is a provision
about terminating the agreement at the end of the fixed term. A park owner
can issue a termination notice during the fixed term, as long as the
8
termination date is not before the end of the fixed term (and the required three
months notice is given). An occupant, on the other hand, cannot give notice
to the park owner until after the fixed term has ended. This means that the
operator can end the agreement on the last day of the fixed term, but the
occupant cannot do so until 30 days after the end of the fixed term.
The second area of apparent inconsistency relates to the amount of notice
that can be given by the parties where the fixed term has expired and the
occupation agreement remains in effect on a continuing basis.
On the one hand, section 20(3) of the Act says that, if the occupation
agreement is not terminated at the end of the fixed term and does not include
a continuation term, it continues as a ‘periodic occupancy’ renewed at regular
intervals when occupation fees are paid. Under this provision, the agreement
can be terminated by giving notice equal to the length of the period for which
site fees are payable. This could be as little as a week if fees are paid
weekly.
In contrast, clauses 38 and 40 of the standard agreement terms in Schedule 1
provide that, where the fixed term has finished, notice of at least three months
may be given by the park owner or at least 30 days by the occupant.
The discussion paper noted that the general intent of the termination
provisions in the Act was to provide flexibility to both parties and that an
occupation agreement does not guarantee security of tenure beyond the fixed
term of the agreement.
Analysis of submissions
Many occupants’ submissions suggested that park owners should not be able
to terminate the agreement without reason, and the opinion was also
expressed that the disclosure document should draw attention to the
significance of the park owner’s right to terminate without giving reasons.
A number of occupants also noted that some moveable dwellings and vans
have fixtures, such as expensive fixed annexes, tropical roofs, plumbing etc,
which would make it difficult and costly to organise a move to another site or
park. They argued that they should be entitled to compensation if the
agreement is terminated.
Others complained that they had been asked by the park owner to install a
fixed annexe or other costly improvements to comply with the standards of the
park, and the next year had their agreement terminated.
No suggestions were made in the submissions for extending the periods of
notice for termination.
Park operators’ submissions generally expressed satisfaction with the current
termination provisions, and wished to maintain contractual flexibility. The
Caravan and Camping Industry Association pointed out in their submission
9
that having to wait until the end of the fixed term to give notice would
effectively lengthen the period of the agreement.
One council submitted that it had no objection to occupants being able to give
notice before the end of the fixed term to end the agreement at the end of the
fixed term. However, it argued the council should not be financially
disadvantaged by this, and considered that the occupant should pay fees until
a new occupant moves in.
Findings and recommendations
The review found no justification for the current inconsistency in the Act which
enables park owners but not occupants to give notice to end the agreement
on the last day of the fixed term. It is considered that occupants should be
able to give 30 days prior notice if they want to end the agreement at the end
of the fixed term.
The provision in section 20(3), discussed above, is considered by the review
to be unnecessary. To minimise potential confusion and inconsistency, the
review recommends removing this provision and having just one set of
provisions about terminating occupation agreements after the fixed term has
expired.
The review additionally noted that, under clause 40 of Schedule 1, three
months notice is required to be given by park owners to occupants to
terminate the occupation agreement. The review considers that it would be
more appropriate to express this notice period as 90 days, as the occupants’
notice period is expressed in days.
The review also found that some occupants have suffered detriment because
the park owner required them to make costly improvements (such as installing
fixed annexes or timber skirting) but this was not accompanied by any
increase in tenure. This has resulted in unfair outcomes for some occupants
who have had their agreement terminated not long after making significant
financial outlays to comply with park requirements. It is considered that any
such requirements should be disclosed before the agreement is entered into.
In summary it is recommended that:
•
The Act be amended so that either party may give notice before
the end of the fixed term to terminate the agreement at the end of
the fixed term.
•
The current three months notice required for no grounds
termination by a park owner be changed to 90 days.
•
The Act be amended to remove the inconsistencies in the amount
of notice required to be given to end an agreement after the fixed
term has expired.
•
Park owners be required to disclose any improvements the
prospective occupant would need to make to the site or moveable
10
dwelling to comply with park requirements, before entering into
an occupation agreement.
USE OF TERMINATION PROVISIONS BY PARK OWNERS AS RETALIATION
Current provisions
Park owners are able to terminate an occupation agreement without giving
any reason, as long as the termination date is not before the end of fixed
term. Three months’ notice is required.
The discussion paper asked whether occupants should be able to apply to the
Consumer, Trader and Tenancy Tribunal to challenge a ‘no grounds’
termination notice if they believe it was given in retaliation for pursuing their
rights in some way.
Analysis of submissions
Most occupants who responded to this question were of the view that they
should be able to challenge a no grounds notice in the Tribunal on the basis
that they believe it was issued in retaliation for the occupant having attempted
to pursue their rights.
Park owners said that this would in effect remove no grounds terminations, as
occupants could challenge every notice on this basis, and owners would lose
the flexibility to decide how best to manage their parks. One submission also
pointed out that it would be very difficult to prove either way. This submission,
along with that of the Caravan and Camping Industry Association, expressed
concerns that the no grounds terminations should be maintained, and claimed
that wrongful use of it could be dealt with by the Tribunal.
Findings and recommendations
The review has concluded that allowing a ‘no grounds’ notice to be challenged
in the Tribunal would severely restrict a park owner’s flexibility in running their
enterprise, and that retaliation may be difficult to prove.
Allowing occupants to apply to the Tribunal to challenge terminations if it is
believed that they are in retaliation for the occupant pursuing their rights
would in effect remove no grounds terminations, as park owners could be
called on to justify every termination notice. This is not the intention of the
legislation, and is not considered appropriate to limit the general rights of the
park owner to regain the use of sites as they need to for their commercial
purposes.
In summary, it is recommended that:
•
The current provisions for no grounds notices be retained.
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CLOSURE OR REDEVELOPMENT OF A PARK
Current provisions
The Act does not include provisions specifically relating to closure or
redevelopment of a park. There are standard terms in the occupation
agreement which relate to the termination of the agreement by the park owner
without giving reasons, by giving three months’ notice.
The disclosure document the park owner must give to prospective occupants
includes information about who pays any costs to relocate an occupant’s
dwelling to another site within the park during the term of the occupation
agreement.
The discussion paper asked whether the Act provides an appropriate balance
between the rights of park owners and occupants in relation to redeveloping
or changing the use of the park.
Analysis of submissions
Submissions from some occupants put forward the view that, if the park
owner wished to make changes to the park for commercial reasons, they
should have to compensate the occupant. Some argued that those required
to move should be given a choice of alternative sites, but not be actually
required to move, or that if the park was sold, it should only be sold as an
ongoing holiday park so as not to disrupt the occupants.
Park owners and the Caravan and Camping Industry Association in their
submissions claimed that occupants are protected from being required to
relocate during the fixed term, and that they have the option of negotiating
further fixed terms once the initial term of the agreement ends. They viewed
the current provisions as providing an appropriate balance between
occupants and park owners. These submissions also reiterated that park
owners need to be able to make commercial decisions about the
management of the park, with one park owner claiming that long-term casual
park occupation was no longer as profitable as it once was, and that some
parks would need to reduce or eliminate this type of site usage.
One park owner stated that they discuss and negotiate with their long-term
casual occupants for a lengthy period prior to their having to move. This park
owner reported a co-operative relationship with occupants by keeping them
informed about plans well into the future. One said that he had given the
long-term casual occupants in his park between 18 and 30 months notice of
changes which required them to leave.
Findings and recommendations
The review found that the provisions in the Act recognise that the park is
being run as a business by the park owner who has considerable investment
in the park.
12
The Act is considered appropriate in that occupants are protected during the
fixed term, during which time the agreement can only be terminated by mutual
agreement between the parties, unless there is a breach of the agreement.
When the fixed term is finished, three months’ notice must be given by the
park owner to terminate the agreement and require the occupant to leave the
park. This gives the occupant time to make other arrangements and to
relocate the moveable dwelling.
In summary it is recommended that:
•
No amendments be made in relation to closure or redevelopment
of parks.
OCCUPATION FEE INCREASES
Current provisions
Under the Act, occupation agreements must set out the amount of occupation
fees to be paid. These details are also required to be included in the
disclosure statement which must be given to prospective occupants.
Occupation fees may only be increased during the fixed term if the agreement
sets out the circumstances under which fees are to be increased. In addition,
written notice is still required to be given. After the end of the fixed term of the
agreement, the park owner may increase the occupation fees by giving 30
days notice. There is no limit to the number or size of such increases
provided the required notice is given.
The discussion paper asked whether the current provisions for increasing
occupation fees are appropriate.
Analysis of submissions
Most submissions from occupants and park owners did not raise any
concerns about the process for increasing occupation fees. One submission
suggested that 30 days notice was not sufficient to allow the occupant to
make a decision and plan what to do.
In regard to fee increases during the fixed term, one occupant noted that, in
their agreement, the term about fee increases stated that the fee could be
increased any time during the fixed period with 30 days’ notice.
Some park owners noted that the current provisions provide an appropriate
balance between the rights of both parties.
A number of submissions from occupants raised issues about the level of
increases to occupation fees, and some suggested that there should be
controls.
13
Findings and recommendations
It is the view of the review that fees and fee increases are a matter for the
marketplace. With very few exceptions, there is no price control on goods
and services available in the market in NSW, and it is generally recommended
that consumers shop around to check prices and other details before agreeing
to buy goods or sign a contract for goods or services.
It is not the intention of the Act to control prices for site fees. Keeping a
moveable dwelling in a park on a long-term casual basis can be a very
economical and convenient option in comparison to other forms of holiday
accommodation, but it is up to the consumer to make this choice.
The review concluded that the process for increasing occupation fees after
the fixed term of the agreement should be maintained.
The review found that clarification is required in relation to fee increases
during the fixed term of an occupation agreement. The standard agreement
term enabling the park owner to specify the circumstances in which fees can
be increased during the fixed term may be too broad as it appears to allow
park owners to simply specify that fees can be increased any time during the
fixed term simply by giving 30 days’ notice. This enables the intent of the Act
in this area to be undermined. When an occupant signs a fixed term
agreement, they should be aware of the amount in fees they will be liable to
pay for the duration of that fixed term.
In summary it is recommended that:
•
The provisions dealing with fee increases be clarified to ensure
that occupation agreements clearly set out the full details of any
increases that will be made to fees during the fixed term.
•
Otherwise, the process for increasing occupation fees be
retained.
REQUIREMENT TO MOVE SITES AND EFFECT ON OCCUPATION FEES
Current provisions
If the fixed term of the agreement has ended, a park owner can give notice to
the occupant to relocate to another site. This provides an alternative to
termination, for example, in circumstances where the park owner wishes to
use the site for another purpose or accommodation type. If the occupant
wishes to stay within the park rather than leaving, he or she may move to
another site.
The discussion paper noted that, where this involves moving to a less
desirable site or a site with less access to services and facilities, there is no
requirement that the site occupation fee will be reduced. The details of the
14
new arrangement, including the occupation fees, form part of the new
agreement.
Analysis of submissions
Although there were many comments by occupants about having to relocate
sites in the park, their concerns were generally in relation to the expense of
moving their moveable dwelling. Many also said that they did not want to
leave the park altogether and preferred the option of being able to move to
another site. However, many believed that the park owner should assist with
relocation costs or compensate them for having to move.
Park owners, the Caravan and Camping Industry Association and a tenancy
advocate noted that relocation was not possible except by mutual agreement
during the fixed term of the agreement, and after the fixed term, the fees for
the new site are negotiable when drawing up the new agreement.
Park owners also argued that they needed to be able to rearrange and
reorganise the park to suit changing circumstances and to make the best use
of the facilities.
Those occupants who commented on the fees issue generally believed that
there should be an adjustment in fees when relocating to a less attractive site
or a site with a lower level of services and facilities. The Tenants’ Union
suggested that an application should be able to be made to the Tribunal if the
relocation is to a site with a lower level of service.
Findings and recommendations
The review found that there is no need to amend the legislation in relation to
the fees payable for a less attractive site. The relocation would require
negotiation of a new agreement for the new site, as an occupation agreement
relates to a particular site. Occupation fees would be part of these
discussions. Relocation during the fixed term would not be possible without
agreement by both parties.
The review also found that the legislation and the agreement make no
provisions for the amount of notice required for relocation. As the relocation is
an alternative to leaving the park, and would require similar arrangements and
expenses, it is recommended that the Act specify that the same notice be
given for relocating as for leaving the park.
In summary it is recommended that:
•
The same notice be required for relocating to a different site as
for terminating the agreement.
15
PAYMENT OF INGOING FEES AND SECURITY OF TENURE
Current provisions
Section 21 of the Act provides that a person must not demand, require or
receive from an occupant money other than occupation fees, any other
charges that the occupant agrees to under the occupation agreement, and
any charges or other amounts that may be prescribed by the regulations. The
provision for occupants to pay any other charges they agree to in the
occupation agreement seems very broad, although it would appear from
clause 9 of the standard agreement terms in Schedule 1 that it is intended to
refer to utilities costs.
The disclosure document the park owner gives to prospective occupants must
specify the purpose of any extra charges the occupant will have to pay. The
provision, in section 9(d) of the Act, gives gas and water charges as
examples.
The discussion paper discussed the practice of park owners charging an
ingoing fee to secure an agreement, which some occupants believed entitled
them to greater security of tenure, when this was not in fact the case. The
paper asked whether this was a significant problem, and if there were ways
such payments could be clarified so that it was clear to occupants what they
would receive in return.
Analysis of submissions
This was not a widespread complaint, with only one occupants’ group
submission referring to it as a problem. They claimed that park owners
mislead prospective occupants about the nature of the payment. Occupants’
submissions suggested that the purpose of the payment should have to be
made very clear, or a statement be required saying that the payment does not
give additional security of tenure. A number of occupants suggested that
ingoing payments be prohibited.
Some park owners’ submissions claimed they had not heard of this issue, or
did not believe it existed. The Department of Lands submission made the
comment that agreements were signed knowing what was in them, and the
agreement should prevail.
The Caravan and Camping Industry Association expressed the opinion that
the disclosure document makes it clear what all payments are for, and pointed
out that if such payments and their purpose were part of the agreement, then
the Tribunal would be able to decide on any disputes.
Findings and recommendations
There are two elements to this issue. One is the charging of an additional fee
and the other is misleading the occupant as to the benefit of making such a
payment.
16
The review considers that the Act attempts to maintain flexibility in the details
of agreements between occupants and park owners, and such details as
additional payments should be discussed by the parties before signing the
agreement. If greater certainty is sought for a longer period, a longer fixed
term agreement can be signed.
The review concludes that it should be made very clear in the agreement and
in receipts what all payments are for. The expression “ingoing payment” is
not considered sufficient, and an occupant or prospective occupant needs to
be informed about what they will get in return for this payment, which should
be documented in the agreement.
In summary it is recommended that:
•
All payments payable by the occupant be shown in the agreement
and their specific purpose made clear.
PARK RULES FOR LONG-TERM CASUAL OCCUPANTS
Current provisions
Under section 24 of the Act, the park rules for casual occupants in a holiday
park are automatically terms of every occupation agreement. The rules
cannot be inconsistent with the Act or any other legislation, or with the
occupation agreement. The rules also apply to occupants’ guests.
A park owner may make changes to the park rules, but must give seven days
notice of the changes to long-term casual occupants (section 25).
The discussion paper asked if the provisions for changing the park rules were
satisfactory, whether the Act should specify how a consultative committee
should be consulted and whether occupants should be able to apply to the
Tribunal in relation to inappropriate changes to rules.
Analysis of submissions
Park owners and managers generally argued that they need the freedom to
make rules relating to the management of their parks, and that generally rules
are not specific to casual occupants but cover the whole park and the different
types of occupants. They also pointed out that the rules would be more
significant to the permanent residents of the park, that the Residential Parks
Act had quite specific requirements in relation to rules, and that the interests
of holiday occupants and park residents could well be quite different.
Occupants generally expressed that they would like to have a say in rule
changes which affected them, with particular mention of rules about types of
structures and appliances able to be installed, which occupants said impose a
financial burden on them. The option to challenge unfair rules or rules which
imposed additional financial burdens was generally considered appropriate.
17
Findings and recommendations
The review found that there seems to be an inconsistency in the Act, in that
the rules are required to be given to prospective occupants before they sign
an occupation agreement, but the rules may subsequently be changed
unilaterally by the park owner with only seven days notice.
Any requirements for consultation with long-term casual occupants would be
difficult and costly to implement, given that they are only in the park for short
periods of time through the year. Because long-term casual occupants are
only in the park occasionally, they may also have limited knowledge of park
management issues through the rest of the year. Some of the rules may also
have limited effect on casual occupants.
The review concluded that encouraging park owners to discuss rule changes
which will impose a financial burden with the potentially affected occupants
seems a reasonable approach.
If such discussions are not able to satisfactorily deal with the issues, and the
disagreement concerns a matter that could form the basis of a breach of the
occupation agreement, an occupant or park owner is able to apply to the
Tribunal for an order. However, there is currently no dispute resolution
mechanism available if the disagreement does not relate to a potential breach
of the agreement, even if the change to a park rule is unfair or would impose a
financial burden on occupants. The review found that this issue warrants
further consideration.
In summary, it is recommended that:
•
Consideration be given to enabling the Tribunal to determine
disputes about changes to park rules.
USE OF A VAN BY GUESTS OF AN OCCUPANT
Current provisions
Under the standard terms of occupation agreements, the park owner agrees
to allow any family member or other person to temporarily occupy the site if
they have the prior permission of both the occupant and the park owner. The
agreement also provides that the occupant is responsible to the park owner
for behaviour of visitors and guests.
The disclosure information document which given to prospective occupants
must disclose whether there are additional occupation fees charged for
additional occupants or visitors.
The discussion paper asked if the current provisions in relation to guests were
satisfactory, or whether there was a need for a provision that a park owner
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could not unreasonably refuse a request for a guest to use the moveable
dwelling.
Analysis of submissions
Much of the discussion in occupants’ submissions focused on additional fees
payable for guests and visitors, rather than on the park owner granting
permission.
Many submissions from occupants expressed the opinion that they had paid
for a certain number of days per year (usually 180 days) and it was rare for
occupants to use anywhere near that number. Some believed that if the days
were paid for, they should be allowed to let friends or family members use the
dwelling as long as the maximum number of occupants stipulated in the
agreement was not exceeded. Those who had self-contained vans and
moveable dwellings including toilets and bathrooms felt particularly strongly
about this, given that their guests do not make use of park amenities.
The Tenants’ Union submission argued that not allowing the park owner to
unreasonably withhold consent was not a solution, because taking action in
the Tribunal would take too much time. The submission outlined a scenario
where an occupant might wish to have a visitor stay for only one night, and
argued that the park owner should not be able to refuse consent, given that
the occupant is responsible for the behaviour of guests. There are options for
the owner to take action if a guest breaches the occupation agreement or the
park rules.
One park operator pointed out that visitors can cause more problems in the
park than regular occupants in terms of damage to the park and other
disruptive behaviour. They, as well as some occupant representatives,
acknowledged the park operator’s need to know who was using the park, and
also claimed that such control was necessary to their management of the
park.
Findings and recommendations
The review found that it is reasonable that the park operator knows who is
using the park. There is also a requirement under the Local Government
(Manufactured Home Estates, Caravan Parks, Camping Grounds and
Moveable Dwellings) Regulation 2005 that a register be kept of occupiers of
sites in caravans parks and camping grounds.
The requirement that the park owner’s permission be obtained for guests or
visitors is considered reasonable and should be retained. However, it is not
appropriate for the park owner to be able to refuse permission for no reason.
If a particular guest has been troublesome in the past, a park owner should be
able to withhold consent, but such a decision may need to be defended if
there is a dispute.
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Under the standard agreement term 31 in Schedule 1, every park owner
agrees to allow occupants’ family members and other persons to temporarily
occupy the site with prior permission. Accordingly, a park owner’s refusal to
give permission for guests or visitors could be considered a breach of the
agreement and either party can apply to the Tribunal if the disagreement is
not able to be otherwise resolved.
The review found that prospective occupants should be made aware of any
restrictions on having visitors or allowing others to use the dwelling. Any such
restrictions should be precluded if they are inconsistent with the legislation or
the standard agreement terms.
It is also recommended that the maximum annual number of days occupation
allowed be included as a term of occupation agreements.
In summary, it is recommended that:
•
Prospective occupants be informed of any restrictions on having
visitors or allowing others to use the dwelling and any restrictions
be precluded if they are inconsistent with the legislation or the
standard agreement terms.
•
A park owner should not be able to unreasonably refuse consent
to an occupant’s visitor or guest.
•
The standard agreement terms include the maximum annual
number of days of occupation.
OTHER ISSUES
A number of other issues were raised, generally by occupants, which were not
specifically addressed in the discussion paper. Apart from the issues relating
to selling on site, they were generally not widespread comments.
SELLING ON SITE
Current provisions
The mandatory disclosure document for prospective occupants includes
information covering the occupant selling their moveable dwelling while it is in
the park.
In clauses 23 and 24 of the mandatory agreement terms, the occupant agrees
not to sell their moveable dwelling on site or transfer their interest in their
moveable dwelling without the consent of the park owner, and that in both of
these situations a new occupation agreement will be required if the park
owner agrees to the transfer.
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Analysis of submissions
Many submissions from occupants refer to owning a van or dwelling for many
years with the expectation that they would be able to sell it when required.
Other occupants noted that they had bought a dwelling on site relatively
recently and the rules had since changed. In many cases, this was expressed
alongside concerns about the possibility of not being able to recoup much of
their investment.
It was suggested that owners should not be able to unreasonably refuse
consent to selling the dwelling on site, because of the level of loss park
occupants might suffer from such a refusal. It was also suggested that, in
some cases, the park owner had refused consent so as to buy the moveable
dwelling themselves at a very low price.
Park owners and the industry did not address this issue, which was not one of
the points raised in the discussion paper. However, some submissions from
occupants noted that refusal to allow on site sales or assignment of leases to
family members was not always unreasonable, for example where the park
owner has plans to reorganise the park and change the availability of different
types of sites and accommodation.
Findings and recommendations
The review concluded that these matters are covered in the disclosure
information document given to prospective occupants, and in the required
terms of the occupation agreement. However, the review also found that it is
not appropriate for park owners to unreasonably refuse consent, for example
where there are no plans to use the site for another purpose and the dwelling
meets the park’s requirements. Where the park owner consents to the
dwelling being sold on-site, the review considers that they should not be able
to refuse the buyer an occupation agreement or require the dwelling to be
removed by the buyer, unless this was a condition of the consent.
Approximately one-third of the State’s holiday parks (220 parks) are situated
on Crown land managed by the NSW Department of Lands under the Crown
Lands Act 1989. It is the policy of the Department to only permit a maximum
of 50% of sites to be occupied on a long-term casual basis. The objective of
this policy is to ensure an adequate supply of tourist sites for the general
public. This policy also ensures that park operators have the opportunity to
progressively modernise park infrastructure and provide more tourism
opportunities. The review considers that it would not be unreasonable for the
operator of a park situated on Crown land to refuse consent to an on-site sale
in order to comply with Government policy.
In summary it is recommended that:
•
An operator of a privately owned park not be able to unreasonably
refuse to allow a dwelling to be sold on site.
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•
Where a park owner consents to a dwelling being sold on-site,
any reasonable conditions to the consent are to be set out in the
written consent document.
•
Where the park owner consents to a dwelling being sold on-site,
they should not be able to refuse the buyer the right to occupy the
site under an agreement, unless the written conditions of the
consent provided otherwise.
ISSUES RELATING TO THE LEGISLATION
MANNER OF PAYING AND HOW TO PAY OCCUPATION FEES
Clause 13 of the standard agreement terms in Schedule 1 gives options for
places of payment, such as to the park owner or manager, any other
reasonable place or directly into a specified account.
Clause 12 relates to the method of payment, but is more general. The
intention of the clause is to enable the parties to agree on whether fees are
payable in cash, by cheque, direct debit or another method. However, clause
13 also refers to direct debit in (c).
Recommendations
The review noted that there is a possibility of confusion with these two clauses
as they appear to overlap, and that the matter could be simplified and
clarified.
In summary it is recommended that:
•
The prescribed agreement terms relating to paying occupation
fees be clarified (clauses 12 and 13 of Schedule 1).
LEGAL STATUS OF INFORMATION FOR PROSPECTIVE OCCUPANTS
The disclosure document for prospective occupants and the occupation
agreement cover many of the same areas. The information disclosure
document is used by the prospective occupant in deciding whether to enter
into an occupation agreement with the park owner. However, once the
agreement has been signed, it (the agreement) becomes the important
document which will be referred to should disputes arise, and if a matter was
being heard by the Tribunal or a court.
The issue becomes significant if the two documents are inconsistent on any
matter, or if a matter is covered by the disclosure document but not by the
occupation agreement.
Recommendations
The review considers that the information contained in the disclosure
document for prospective occupants should be binding on the park owner.
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The review found that it should be a term of the agreement that the disclosure
document becomes a part of the agreement and the two must not be
inconsistent. This is similar to a requirement of the Retirement Villages Act
1999, where the disclosure document is required to be attached to the
contract.
In summary it is recommended that:
•
The disclosure document for prospective occupants become part
of the occupation agreement.
MATTERS IN DISCLOSURE DOCUMENT WHICH ARE COVERED BY THE ACT
In the disclosure document for prospective occupants, there are a number of
matters which are not at the discretion of the park owner but are covered by
the legislation. These include the amount of notice required to increase fees
or terminate an agreement and how disputes can be resolved. By composing
them in the same way as other matters such as the fees and other charges, it
is possible for a park owner or prospective occupant to see them as matters
over which the park owner has control.
Recommendations
It is suggested that, in the disclosure document for prospective occupants,
non-discretionary matters covered by the Act be removed. Instead, a note
should be included to inform prospective occupants about where they can
obtain information about these and other matters.
In summary it is recommended that:
•
The disclosure document be amended to remove information
which is not at the park owner’s discretion, and include a note to
inform prospective occupants about where they can obtain
information about important matters.
LEGAL CONTRACT ISSUES
Novation and privity issues were raised by a legal practitioner who has
assisted long-term casual park occupants as well as being one himself. He
pointed out that it was not clear whether an agreement remained valid when
there was a change of park owner.
This submission also raised the possibility of contractual safeguards against
exercise of power in bad faith.
Recommendation
In summary it is recommended that:
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•
Legal contractual issues of assignment, privity and novation be
clarified.
RECOVERY OF POSSESSION
The Tenants’ Union submission pointed out that there seems to be some
confusion about the sections of the Act relating to the recovery of possession
of a site by the park owner.
Section 28 states that a park owner may recover possession of a site without
needing to obtain an order from the Tribunal.
Section 29 says that a person must not enter a site for the purpose of
recovering possession unless it is in accordance with the Act or the
occupation agreement. The Act allows for an agreement to be terminated if
the park owner gives the required written notice. On this basis, it could be
concluded that the park owner can enter a site to recover possession if the
occupant has not vacated the site within the period specified in the notice.
The Act provides protection for the occupant by enabling them to apply to the
Tribunal if they believe the proposed termination is a breach of the agreement
terms. However, the park owner’s legal position if they enter a site to recover
possession may be uncertain.
Recommendation
In summary it is recommended that:
•
That further consideration be given to whether the provisions
relating to recovery of possession should be clarified.
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REVIEW FINDINGS AND CONCLUSIONS
This report documents the outcomes of the review into the legislation
governing long-term casual occupation in holiday parks. It has been prepared
following the release of a discussion paper on 1 October 2008, consideration
of 43 formal submissions, as well as consideration of issues raised in
correspondence during the period since the commencement of the Act.
The review has concluded that the policy objectives of the Holiday Parks
(Long-term Casual Occupation) Act 2002 remain valid and that, in the main,
the terms of the Act remain appropriate for securing those objectives. Some
areas of legislative reform to refine the Act, clarify some areas and remove
inconsistencies have been identified for further consideration.
LIST OF RECOMMENDATIONS
Recommendation 1
The rights and obligations of occupants and park owners be set out in
the main body of the Act, rather than only in the standard agreement
terms set out in Schedule 1.
Recommendation 2
The disclosure document required to be given to prospective occupants
include a statement clarifying that the agreement is a leasing
arrangement only and could be terminated.
Recommendation 3
The Act be amended so that either party may give notice before the end
of the fixed term to terminate the agreement at the end of the fixed term.
Recommendation 4
The current three months notice required for no grounds termination by
a park owner be changed to 90 days.
Recommendation 5
The Act be amended to remove the inconsistencies in the amount of
notice required to be given to end an agreement after the fixed term has
expired.
Recommendation 6
Park owners be required to disclose any improvements the prospective
occupant would need to make to the site or moveable dwelling to
comply with park requirements before entering into an occupation
agreement.
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Recommendation 7
The provisions dealing with fee increases be clarified to ensure that
occupation agreements clearly set out the full details of any increases
that will be made to fees during the fixed term.
Recommendation 8
The same notice be required for relocating to a different site as for
terminating the agreement.
Recommendation 9
All payments payable by the occupant be shown in the agreement and
their specific purpose made clear.
Recommendation 10
Consideration be given to enabling the Tribunal to determine disputes
about changes to park rules.
Recommendation 11
Prospective occupants be informed of any restrictions on having
visitors or allowing others to use the dwelling and any restrictions be
precluded if they are inconsistent with the legislation or the standard
agreement terms.
Recommendation 12
A park owner not be able to unreasonably refuse consent to an
occupant’s visitor or guest.
Recommendation 13
The standard agreement terms include the maximum annual number of
days of occupation.
Recommendation 14
An operator of a privately owned park not be able to unreasonably
refuse to allow a dwelling to be sold on site.
Recommendation 15
Where a park owner consents to a dwelling being sold on-site, any
reasonable conditions to the consent are to be set out in the written
consent document.
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Recommendation 16
Where the park owner consents to a dwelling being sold on-site, they
should not be able to refuse the buyer the right to occupy the site under
an agreement, unless the written conditions of the consent provided
otherwise.
Recommendation 17
The prescribed agreement terms relating to paying occupation fees be
clarified.
Recommendation 18
The disclosure document for prospective occupants become part of the
occupation agreement.
Recommendation 19
The disclosure document be amended to remove information which is
not at the park owner’s discretion, and include a note to inform
prospective occupants about where they can obtain information about
important matters.
Recommendation 20
The provisions relating to the recovery of possession be clarified.
Recommendation 21
Legal contractual issues of assignment, privity and novation be
clarified.
© State of New South Wales through the Office of Fair Trading, 2009
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