Never give up! The campaign to keep assignment
03/11/2015
When the draft Residential (Land Lease) Communities Bill was first released in April 2013 one of the big concerns residents and advocates had was that under the new Act residents would lose the right to assign their site agreements. The draft Bill seemed to favour operators, providing weaker assignment provisions than those available in the Residential Parks Act 1998.
What is assignment, and why is it important?
When you sell your home, assignment allows you to transfer (or assign) your site agreement to the buyer. This means that the buyer can take over your existing site agreement with the same terms and conditions, including the current site fees that you pay.
Assigning a site agreement is not complicated. Under the Residential Parks Act 1998 the home owner had to get the operator’s permission and the operator could not unreasonably refuse consent. Consent did not have to be in writing (although this was better) but the Residential Parks Regulation helpfully provided a ‘Deed of assignment’ to assist.
Assignment has always provided some protection for residents against operators interfering in the sale of homes. For example, where an operator was not offering a fair agreement or simply refusing to enter into a new agreement with a buyer, a home owner could assign their existing site agreement and the sale could proceed.
Residents and advocates knew that with the introduction of voluntary sharing arrangements in the proposed new Act, assignment would be more necessary than ever. Retaining strong assignment rights would ensure that prospective buyers had choice between an assigned agreement, and a new agreement containing voluntary sharing terms or increased site fees being offered by the operator.
Campaign for assignment
The assignment provision in the draft Bill was worrying. It restricted assignment to the fixed term of the agreement and gave the operator an absolute right to refuse consent. The drafting of this provision effectively annulled assignment rights and took away the protection assignment offered to home owners against interference in the sale of their home.
On release of the draft Bill park residents and advocates quickly shifted into gear. Their written and oral submissions to the review of residential park legislation strongly argued the case for retaining the existing right to assign. Once it was clear that this would not be enough, residents together with advocates began to meet with key members of State Parliament face-to-face to convince them of the need to amend the Bill.
Not all of these meetings took place at Parliament house. The Port Stephens Park Residents Association (PSPRA), for example, organised a forum for their members and invited along politicians to hear first hand how the draft Bill might impact on residents. At that meeting they got a commitment from their local member to support an amendment on assignment.
Christina Steel, President of PSPRA, feels that the real-life examples shared in submissions were persuasive. As she explains, “The case histories that were cited helped to demonstrate how powerless the residents are when taking on a park owner. I don’t think anything can change the lopsided power balance that favours the park owner, but this campaign certainly brought out into the open some of the truly despicable tactics used by park owners when dealing with residents”.
The residents’ hard work paid off. The Bill passed the lower house without any change in October 2013 but before it was passed by the upper house an amendment was put and accepted. The amendment removed the restriction on assignment being allowed only during a fixed term and reintroduced the qualification that operators cannot unreasonably refuse a request to assign an agreement.
Residential (Land Lease) Communities Act 2013 - Section 45
Sub-letting residential site or assignment of site agreement
(1) A home owner may, with the written consent of the operator of the community:
(a) enter into a tenancy agreement for, or otherwise sub-let, the residential site or the home located on it, or
(b) assign the site agreement.
The outcome
Under the Residential (Land Lease) Communities Act 2013 home owners have the right to assign their agreements with the written consent of the operator.
Importantly the operator cannot unreasonably withhold or refuse consent and if they do, the homeowner can make an application to the Tribunal to settle the dispute.
Another positive result of the campaign for assignment, as Christina Steel points out, was that it increased residents’ understanding of their rights. “The campaign actually helped increase awareness of residents’ right to assign. The operators obviously don’t mention it and too many purchasers enter a village unaware they can actually have the vendors’ site agreement assigned to them. For that matter, many vendors don’t know either.”
Keeping the right to assign in the new Act is a great outcome, but it did not come easy. Residents and advocates won it through determined effort.
So what is the takeaway lesson from the residents’ campaign for assignment? Christina Steel says it is about perseverance. “Never give up, one person can make a difference, especially when the one becomes many!”