Land Lease Living Affordable Lifestyle Living | Page 17

Important information Important information Before becoming a home owner in a residential land lease community there are some important operational issues to consider. It is strongly recommended that you carefully review the conditions set out in the site agreement to ensure that you are clear on all site fees and charges and that you understand the role of the community operator as well as the responsibilities that you have as a home owner. Although the paper work associated with moving into a residential land lease community is not complex it is a good idea to seek independent legal and financial advice to review all the terms and conditions before committing to the purchase of a home and signing a site agreement. DISCLOSURE STATEMENT The Residential (Land Lease) Communities Act 2013 requires a community operator to supply any prospective home owner with a Disclosure Statement that clearly sets out the terms and conditions of living in that specific community. This document should include the following: 3 Community Details – age, stage of completion, if it is residential only such as additional levies or voluntary sharing of capital gains. SITE AGREEMENT This is the legal agreement signed between you, the home owner and the community operator. Site agreements govern all rights and obligations of both operator and resident; they must include the detailed terms and conditions applying to fees and charges, complaints processes and the grounds on which a site agreement can be terminated. The detailed information in the Disclosure Statement is included in the site agreement. Once you sign a site agreement there is a 14-day cooling off period, which ends if you move into the home or put a home on the site in that period. The site agreement gives you the right to live in your home on the site referred to in the agreement, which can only be terminated in some limited circumstances. Effectively, you have secure tenure protecting your investment in the home. If you die your executor becomes the home owner and the home can remain on site or be sold to remain on site. at least 60 days’ notice of any proposed site fee increases; all home owners have to be advised in writing at the same time and site fees cannot be increased by notice more than once per year. If at least 25% of home owners in the community, who received the by notice site fee increase, think that the increase is excessive, then they can apply to NSW Fair Trading for mediation. If the mediation is unsuccessful, they can apply to the NSW Civil and Administrative Tribunal (NCAT). This is a specialist body, which resolves a wide range of everyday disputes relating to matters that include tenancy, residential communities and leases. NCAT will determine whether the increase is excessive by considering a range of factors such as the frequency of past increases, actual or projected increases in operating expenses, any repairs and improvements that are planned or have been carried out, the value of any improvements in the community and whether the increase is fair and equitable to the community. VOLUNTARY SHARE ARRANGEMENTS 3 Residents Committee – if a residents committee is in place to liaise and advocate with the community operator on behalf of residents Fixed Method – there is an up-front agreement about how and when the site fees will increase. A fixed method may take a number of different forms. For example, increases in site fees could be linked to the Consumer Price Index (CPI) or a percentage of the Aged Pension, or a set dollar amount (for example, $5 per year) or a set percentage (for example, 2% per year). Home owners must be given at least 14 days’ notice before an increase takes effect. Under the Residential (Land Lease) Communities Act 2013 Fixed Method increases cannot be challenged except as an unfair term under the Australian Consumer Law. These arrangements can be offered to prospective homeowners before they enter into a site agreement with an operator. They are an arrangement by which prospective home owners may negotiate lower weekly site fees or other benefits in exchange for paying up-front fees, exit fees or by committing to share a percentage of any capital gain made on their home when they eventually sell it. Capital gain is the difference between the price you originally pay for the home and the price you then sell it for when you choose to leave the community. It is important to know that these arrangements are, as the name implies, voluntary. The operator must always also offer the opportunity for any prospective to enter into a standard site rental-only agreement where the resident purchases their manufactured home outright and then sells it when they leave the community without paying the operator any additional fees or percentages of the sale price. Various forms of voluntary sharing arrangements are offered: 3 Specific Financial Arrangements – those associated with the community 3 By Notice Method – to set price increases home owners must be given 3 Share of Capital Gain means you agree to pay a percentage of any capital 3 Operator Details – number of years in operation, who owns the community, membership of indus try associations, evidence that it is financially solvent 3 Site Fees – charges and terms of the regular payment 3 Utilities – if gas, water and electricity are in place at the site, details of charges and how and who they are paid to 3 Services and Facilities offered by the community 3 Safety and Security measures 3 Legislation Compliance – whether the community complies with all relevant legislation 3 Dispute Resolution – processes and proceedings INCREASES IN SITE FEES What you pay for your site is called a site fee and is generally paid weekly or fortnightly. Site fees may be increased either by: Enjoy an affordable lifestyle in your retirement 15