Interference with Sale of Home

By Paul Smyth, Tenants’ Union Residential Parks Legal Officer

Allan and Lynn Reece are home owners and age pensioners. They live in a land lease community called Emerald Tiki Village Caravan Park at Anna Bay in NSW.

In early June, 2017 the Reece’s met Mr John Frost, the owner/operator of Emerald Tiki Village. The operator was selling the home on site 10. On that day Lynn says “we saw two homes that were advertised for sale, on sites 7 and 10.”

The home on site 7 was being sold by the current home owner and Mr Frost explained there was a site coverage issue regarding the carport. The Reece’s decided that because of this it would not be a suitable home for them to purchase. They were then shown to site 10 by Mr Frost. The home on site 10 was actually owned by John and Janette Frost. The Reece’s liked the look of the home. They discussed the sale price and we were told by Mr Frost there were no compliance problems with the home on site 10. The home and carport had been in situ for almost 30 years. Lynn Reece told the operator “I am not interested in purchasing this home because it does not have a laundry”. However, Mr Frost assured them that this was not a problem and said: “You can build a garden shed and put your laundry in it.” Lynn says, we didn’t know at the time that Mr Frost had actually demolished an existing shed on site 10 after he acquired it from the previous owner. Mr Frost then offered the Reece’s vendor finance to cover the price difference between the homes on sites 7 and 10. Allan and Lynn Reece decided to proceed with the purchase from the operator. On 20 June 2017 Mr Frost loaned the Reece’s one of his utes to pick up the flat-pack shed from the local Bunnings. On 23 June 2017 they paid a deposit on the home and signed the loan agreement for the vendor finance.

Between 23 and 25 June 2017 the shed was assembled in the position on site 10 suggested by Mr Frost. Mr Frost assisted the Reece’s by holding and positioning walls and lending them specialist power tools to erect the shed. A plumbing company connected the water and drainage pipes to the laundry shed on 28 June 2017.

After the works were completed the Reece’s entered into a written site agreement for site 10 on 1 July 2017 with the operator. Allan and Lynn enjoyed living in their new home and the first few years were largely uneventful.

Home For Sale

However, things started to go awry because of the operator’s conduct and the Reece’s decided they would sell their home and move out of Emerald Tiki. On 5 January 2020 the Reece’s contacted the Emerald Tiki operator and advised they were going to list their home for sale, by giving a notice of intention to offer the home for sale as required by the Residential (Land Lease) Communities Act 2013. The Reece’s sought advice and were assisted by Trevor Sullivan (advocate from Port Stephens & Affiliated Park Residents Association – PSAPRA) with back up provided from the Tenants’ Union of NSW.

The home was being sold privately with advertising through the website HomeParks.com.au. That company went out of business during the COVID-19 pandemic so Lynn says “we put our home sale in the hands of Mr Neil Simon, of Neil Simon Real Estate of Nelson Bay.”

Emerald Tiki wrote to the Reece’s on 23 January 2020 and said the carport needed to be removed in full from site 10. Further correspondence from Emerald Tiki on 17 June 2020 stated that, “the garden shed was allowed as a TEMPORARY structure” and further that the Reece’s “had NO APPROVAL to build or to install plumbing in the shed”. Allan Reece says “these statements by the Frosts (Emerald Tiki) are completely contradictory or a blatant lie!” The operator had previously sent notices addressed to all home owners advising about site coverage issues under Local Government Regulations but had not raised any issues specifically with the Reece’s.

The June 2020 letter to the Reece’s from Emerald Tiki went on to claim that the compliance of the carport would not be an issue if the laundry shed was removed. However, the operator clearly approved the laundry shed as part of and to secure the initial sale and Mr John Frost even helped build and install it. The Reece’s have photos showing Mr Frost on site 10 assisting them with construction of the laundry shed.

From January 2020 to October 2020 the Reece’s say at least 10 potential purchasers were informed by the Frosts and Emerald Tiki that a sale could not proceed because of the alleged “compliance issues surrounding the carport and laundry/shed.”

The Reece’s felt that if they wanted to be able to sell their home they had to take action. They made an application to the NSW Civil and Administrative Tribunal (NCAT) regarding interference with the sale of their home by the operator. On 6 October, Emerald Tiki agreed to an order, by consent, that they would not interfere in the sale of the home. However, things took a new turn. On the afternoon of 6 October 2020 Mr Frost erected an orange mesh and star picket barricade opposite site 10 on the edge of the internal community roadway. Lynn and Allan say this was “a wholly unnecessary and spiteful action” by the operator and was done to increase the difficulty of going in and out of their carport.

The following day, on 7 October, 2020 Mr Frost entered site 10 without notice and without the Reece’s permission. He dug a substantial hole abutting the back wall of the home. The unsightly hole exposed the water and drainage pipes and it was left untouched for a total of six days. Emerald Tiki were also taking photos of the Reece’s, including where they parked, monitoring them through CCTV, harassing them and issuing notices for various alleged breaches of community rules.

Prospective Purchaser

On 5 January 2021 Neil Simon Real Estate advised the Reece’s that a genuine prospective purchaser was interested in buying their home. Dave (not his real name) made an offer that the Reece’s accepted. Dave was introduced to the office of Emerald Tiki by Neil Simon, the Reece’s agent.

A Disclosure Statement was emailed to Dave by Mrs Louise Thomas, the office manager and daughter of the Frost’s.

In the Disclosure Statement the operator inserted a condition which required that the laundry shed be totally removed within 30 days of the signing of a new site agreement. The Disclosure Statement also stated that the site fees for the purchaser would $190.00 per week. The Reece’s were paying $165.50 per week. Dave advised the agent, that he would not go ahead with the purchase because of the condition that the laundry shed would have to be removed and the higher site fees proposed by the operator in the site agreement.

On or about 13 January 2021 Trevor Sullivan (advocate from PSPRA) advised the Reece’s to write to the operator to seek their consent to the assignment of their site agreement to Dave. The letter advised that if such consent was unreasonably withheld by Emerald Tiki the Reece’s would make an application to the Tribunal and seek other relevant Orders.

At the Tribunal on 17 March 2021 the following Tribunal orders were made:

“By consent, the operator agrees to comply with Section 107 RLLC Act and not make it a condition of the sale of the premises or any proposed assignment, that the allegedly offending laundry/shed will need to be removed to comply with the Local Government Act. However, they will comply with their own disclosure obligations to any prospective tenant (regarding site coverage).”

The Tribunal noted and reproduced two important paragraphs from an Appeal Panel decision in ZW2 Pty Ltd v Welch that the Reece’s advocate Trevor Sullivan had provided. It read as follows;

“There is no reason to conclude that indirect action, namely including a provision requiring work to be carried out as a condition of entering into a new site agreement would not similarly constitute interference. In this regard, the vice the legislator is intending to prevent is an operator taking steps to compel a home owner to carry out work as a condition of allowing a sale.

This is not to suggest that disclosure obligations of the operator need not be met concerning advising a purchaser about compliance of the site and home with relevant local government and other regulations. However, it seems to us a contravention can occur where the effect of the conduct is to require compliance as a condition of approving any assignment or entering into a new site agreement.”

Emerald Tiki were now on notice that requiring works to be carried out as a precondition of entering into a new site agreement constituted interference and they consented to the making of the Tribunal order(s).

Dave, the prospective purchaser, completed an application for tenancy to live at Emerald Tiki. He also provided two character references and over 100 points of personal identification. Emerald Tiki also asked Dave to provide a NSW Police check. There was significant delay experienced by Dave in getting this from the police and obtaining a Police check was used by Emerald Tiki to hold up the making a decision on his application until late March/early April 2021. A clean police check report finally arrived and was provided to the operator. However, there was no immediate response. Following more delaying tactics Emerald Tiki finally wrote to the agent Neil Simon and the Reece’s and advised that Dave’s application had been declined, without reason.

The Reece’s were devastated because they had paid a no-refundable deposit on a home in another land lease community and they had paid site fees in advance. Rather than lose this money the Reece’s have borrowed money for their new home. They are so determined to leave Emerald Tiki that they have purchased a new home without completing the sale of their home at Emerald Tiki.

A renewal of proceedings at the Tribunal regarding interference with sale of their home and seeking compensation is being contemplated by the Reece’s as they weigh up their options. Trevor Sullivan, their advocate from PSAPRA, says,

“The Reece’s have certainly had a tough time with this matter over 17 months. They have sunk a great part of their equity into their home(s). In many cases residents have moved into a land lease community after selling their own homes, usually real estate, having never lived in a mixed community environment like a RLLC. They are not used to living under an owner/operator who has set rules. Home owners need time to adapt to circumstances and should not be confronted with operators like Emerald Tiki who bully and victimise residents and show little regard for the Rules of Conduct for operators. Operators also need to understand that residents are their customers who in effect pay their wages and keep them in business”.

This article was published in Outasite magazine issue 7. Outasite is published annually. Outasite Lite email newsletter, is sent several times a year – subscribe here. All past issues are available in the archive.