Shifting sands

It is fair to say that land lease living is a unique arrangement. The community aspect is attractive to many people but when you own a home that sits on land owned by another party, you cannot be sure that the land use won’t change.

How can land use change?

The actual land itself is unlikely to change, however its designated use can. Most commonly we see this when a community operator changes a residential site from long-term to short-term, or vice versa. This can be done by a simple amendment to the approval to operate, which is issued by the local council under section 68 of the Local Government Act 1993. Neither the operator or the council is required to notify anyone about the change and affected home owners usually don’t find out until later.

Local Government Regulations provide that short-term sites cannot be used as residential sites – their intended use is for short breaks and they are often referred to as holiday sites. Currently the Residential (Land Lease) Communities Act 2013 (RLLC Act) enables an operator to give a home owner a termination notice if they are occupying a short-term site, even though the site may have been long-term when they entered in to a site agreement with the home owner.

The above scenario is very real and has caused problems for many home owners. What is also real is that a land owner can change the nature of a whole community without any of the home owners knowing.

Lakeline

Lakeline is a community in the Illawarra that was for many years part community scheme and part residential park. Many of the home owners have residential site agreements and they and the operator have always conducted themselves according to residential parks legislation. Until recently.

In 2018 representatives of the residents committee made an application to the Tribunal regarding access to the community facilities. At the first hearing the operator’s legal representative claimed the Tribunal did not have jurisdiction to hear and determine the dispute because the community was not a land lease community. This was the first time this had ever been raised and, rather than have the Tribunal decide the issue when they were unprepared, the applicants withdrew their application in order to seek legal advice and conduct their own investigations.

Title searches revealed that over a number of years the land owner had indeed changed the land use to that of a neighbourhood scheme through a series of development consents. This means the home owners can no longer use the RLLC Act as a framework for resolving disputes. They have been placed in an uncertain legal position without any of them being aware that it was occurring.

Coolah Home Base 

Meanwhile in another part of the State home owners were shocked to discover their company title scheme had been changed back into a land lease community without their knowledge. The home owners were presented with residential site agreements and a large site fee increase and told they could either agree or leave. The home owners are currently receiving legal advice and assistance regarding their situation.

Security of tenure

What these examples demonstrate is that when someone owns a home, but not the land on which that home sits, security of tenure is tenuous. Planning laws and approval processes are not designed to take account of anyone other than registered land owners, and that means home owners who do not own the land are vulnerable. NSW is currently designing a 20-year housing strategy and a strategic plan for the use of Crown Land – both of which consider the expansion of land lease community living. It is our view that security of tenure needs to be addressed as part of these strategies so that moving forward home owners are better protected.