Second Reading
Resumed from 27 November 2018.
(Comments and speeches from various members)
HON ALISON XAMON (North Metropolitan) [3.14 pm]: I rise as the lead speaker on behalf of the Greens on the Residential Parks (Long-stay Tenants) Amendment Bill 2018 and indicate at the outset that we will be supporting this bill. I am very glad that this bill has finally come on for debate. I am aware that the Park Home Owners Association has been very concerned about how long it has taken for this bill to come to the attention of the house. It has been very keen to ensure that this bill is debated and passed. I note that its members were very supportive of the moves by this house to send the bill to the Standing Committee on Legislation for additional scrutiny. I am glad that we are finally debating it. This bill, effectively, tries to strike an appropriate balance on the issue of residential parks. On the one hand, it needs to ensure that we achieve housing security and affordability, particularly for long-stay residential park tenants and, on the other hand, it needs to ensure sustainability for park operators so that they can reasonably continue to provide a much-needed housing option, and what is often a very valued lifestyle option as well.
Much to my pleasure, the bill provides for a statutory review after five years, the report of which is to be tabled in Parliament. That is good. It is one less amendment that I need to potentially contemplate. As I said, the house referred the bill to the Standing Committee on Legislation for consideration, including of policy, and I thank the committee members for the good work they have done on that. That standing committee comprises members from three of the eight parties in this house—the Labor Party, the Liberal Party and the Nationals WA. They delivered a unanimous report, which supported the policy of the bill and advised the house that they believe that this bill strikes a good balance between the interests of tenants and park operators, including the retrospective application of some of the transitional provisions. Nevertheless, because they diligently looked at this bill, they have made some recommendations to improve the bill, which we will deal with in the Committee of the Whole stage. Broadly speaking, the recommendations were to clarify a number of matters, delete a lot of the regulation-making powers that seemed to be unnecessary, remove two Henry VIII clauses, and address some matters that had been raised by the Caravan Industry Association of Western Australia. We will, obviously, talk about the substance of those matters further.
The standing committee also made some findings clarifying the effect of some of the other provisions of the bill about grounds for termination, periodic agreements and a number of other matters. The standing committee considered an issue that I had raised via a possible amendment, and I thank the committee for doing that. The committee confirmed that the relief contained in one of the proposed sections for when a term of agreement is harsh or unreasonable will be able to apply to existing agreements as well as to new agreements. I ask the minister to please confirm that that is correct. If an undertaking can be given during the second reading reply, I will not proceed with my proposed amendment.
The consultation that was undertaken by the standing committee for its report is also outlined. Apart from taking written submissions and oral evidence from the two main stakeholders—the Park Home Owners Association, as I mentioned, and the Caravan Industry Association of Western Australia—the committee also contacted and received a submission from Shelter WA. That submission has been made public, so I thank the committee for that. Shelter’s submission supports the bill, while also cautioning that increased protections for tenants must not come at the risk of park closures, which would be detrimental to everyone, including the very tenants who we are trying to ensure have appropriate protection. Shelter’s submission also states that it has the support of the Western Australian Council of Social Service. The committee made an effort to contact a number of appropriate stakeholders. The report also set out the consultation the government did before the bill was drafted, including half-day workshops with the two main stakeholders and consultation with government agencies, including the Department of Planning, Lands and Heritage, and the Small Business Development Corporation. Again, I thank the committee for its work and its very helpful report.
This is a significant piece of legislation because it affects a number of Western Australians. Currently, there are between 15 000 and 20 000 long-stay tenants in Western Australia and about 160 parks with anything from between 8 500 to 9 000 sites, so a considerable number of Western Australians will be impacted by this legislation. Around 25 parks are long-stay only, whereas I note the others tend to be mixed use, some with very few long-stay tenants. Parks are able to offer a very particular type of lifestyle and, for many people, they are a comparatively affordable housing option, especially in places where house prices are otherwise booming. It is significant to note that many long-stay tenants tend to be elderly Western Australians and a lot of them are living on low or fixed incomes. That means that they cannot afford to live anywhere else. I want to stress, though—this is something that has been reiterated to me very strongly—the vulnerability of a significant number of those long-stay tenants does not also reflect that it is a bad housing option. Many long-stay tenants are very clear that they love the lifestyle the long-stay arrangement can afford them. Their communities often tend to be quite small and very close knit. Smaller dwellings mean that they are very easy to maintain and enjoy and often residential parks tend to be in highly desirable locations. For example, people on low incomes often have the opportunity to live close to beach facilities or other facilities that others want to be able to enjoy. The converse risk around that, of course, is that, unfortunately, over the years, long-stay tenants occupying locations that are highly attractive to developers have been caused a great deal of heartache when they have been ousted when residential parks have been sold out from under them to developers.
We have to recognise that the most heartache that occurs for people affected by these changes tend to be those tenants who own the dwelling but not the site that the dwelling is on when they are subsequently forced to move. Depending on the age and the state of the dwelling, we need to acknowledge that a lot of the time, unfortunately, the dwelling may not be capable of being moved anywhere. A dwelling’s initial cost and/or quality ranges significantly. It can be as low as $20 000 to as high as $270 000. The life of a manufactured home can be as long as 75 years, but when a person is living in a caravan, it can also be significantly shorter. Even if the dwelling is capable of being moved, which, as I say, it may not be, the approximate cost of relocation can range from about $14 000 to as high as $40 000. Again, I remind members that we are talking about people who are often on low or fixed incomes. That amount of money can be absolutely prohibitive.
Hon Rick Mazza: It’s more than the home is worth.
Hon ALISON XAMON: Hon Rick Mazza makes the point that often the cost of the relocation can be more than the cost of the home itself. That is actually true.
Of course, a number of things factor into the cost of this. We could be talking about disconnections and reconnections, if we are talking about dwellings that have been plumbed in, and also sometimes the dwellings need to be cut in half to be successfully transported. They then have to be reconnected and those things cost a lot of money. Therefore, it is quite likely, as I said, that the tenant may simply not have the financial means to relocate the dwelling. Even if they could afford to relocate, the cost of relocation could be so close to the cost of replacing the dwelling that it is just not worth it. Even then, if the tenant can overcome all those problems, there is the problem of finding a new site for the dwelling as well. The Park Home Owners Association has said that sites are increasingly hard to find and park operators are increasingly providing their own onsite dwellings rather than sites only. Also, as caravans become more and more self-contained, holiday-makers who own caravans are not necessarily needing a caravan park. This has reduced the demand for sites only, making fewer of them available to a relocating park home owner. The Park Home Owners Association says that selling the dwelling, unfortunately, is also next to impossible. The market for them is just too small; it is just really, really small.
The outcome of all this is that if long-stay tenants with their own dwelling are forced to relocate for any reason, they face the very real prospect of losing their homes and, unfortunately, with that, almost all the wealth that they may have accumulated. For exactly the same reasons, these home owners are extremely vulnerable to price gouging if park operators happen to be unscrupulous. Once they move in with their dwelling, they have to stay put or they run the risk of losing pretty much their main asset in life. They have certainly almost no ability to renegotiate their contract because, unlike other tenants, they cannot just move on if they do not like the terms. I am talking about an extremely unequal power imbalance. The Park Home Owners Association says that around 20 per cent of park home owners are currently on periodic leases subject to only 180 days’ notice. Those people, of course, are the most vulnerable people of all.
I want to make some comments about some significant parallels with retirement village residents. Again, I am talking about a group of people who tend to love the lifestyle that they have chosen to move into but who have unequal bargaining power between the parties. Again, this tends to be older Western Australians who have their wealth largely invested in their home, with the difficulty and high expense of exit, hence the vulnerability of residents to unfair practices, unconscionable contracts and occasional unscrupulous contractors who choose to take advantage of this. At the same time, again, there needs to be a model that is viable for operators. I put forward a motion on retirement villages in this house, which was supported by the entire house in November 2018. At that point, I said that three changes were needed. We needed fairer contracts and training for managers because, unlike the usual residential tenancy, there are no trained professional managing agents who liaise between tenants and landlords. The actions of one manager, unfortunately, can affect a huge number of tenants. I also said that we needed a forum for dispute resolution that would not disadvantage either party, whether by expense or by the intimidating processes of a long delay. I note that I am talking about a group of people who are in a very similar situation to those who are affected directly by this legislation. I hope that we will see the second tranche of reform around retirement villages soon, because I know that that population of Western Australians is also very much looking forward to overdue reform.
There is quite a long history on this issue—the history of trying to find a balance between the interests of long-stay tenants and park operators. Since the 1970s, people have been living rather than holidaying in WA caravan parks. I note that at that time it was generally considered to be illegal, but the passage of the Caravan Parks and Camping Grounds Act 1995 allowed caravan parks to legally provide long-term residential accommodation. That act deals primarily with infrastructure issues because contractual and tenancy matters were regulated under the Residential Tenancies Act. However, the Residential Tenancies Act did not satisfactorily address the needs of this group of tenants. I note that as far back as 2001 the Labor Party talked about amending the act to provide more certainty for residents in caravan parks and park home owners, and that the Greens, through my former parliamentary colleague and friend Hon Giz Watson, also drew attention to concerns in this area. At that time, in 2001, Hon Giz Watson talked about the unjust practices by certain park operators, including overcharging for electricity; 60 days without grounds for termination, despite it being almost impossible to move or sell a dwelling in that time; many tenants not having a lease; arbitrary extra charges, such as for visitors to use the pool; and park operators charging commission for the sale of park homes, despite not being involved in the change of ownership. The Greens raised these concerns 19 years ago. I know that at that time park operators were also unhappy with the act. They thought that it was too onerous, especially on evicting problem tenants. They raised the concern that often park operators were lessors of the residential park, which precluded them from offering long-term leases to tenants. Some park operators, like many long-stay tenants, simply had not understood or appreciated what they were buying into. A statutory review of the Residential Tenancies Act was split into two projects. One project focused on residential park long-stay tenants and the other on residential tenancies generally. That review led to the 2006 act specifically for this kind of tenancy.
In 2009, the Economics and Industry Standing Committee in the other place tabled what was, again, a unanimous report, which seems to be a common theme when Parliament starts looking at these matters, titled “Provision, Use and Regulation of Caravan Parks (and Camping Grounds) in Western Australia”. That report identified that caravan parks providing people the opportunity for this sort of housing were starting to disappear and those that remained were being filled by long-stay tenants rather than tourists, and, importantly, that park operators found they needed to have at least some long-stay tenants to remain viable because it has the effect of stabilising their income. Obviously, issues arise with those parks that have a combination of tourism-based users and permanent residential users. Some had developed into purely residential parks and we had an emerging trend around lifestyle villages. It has been identified that there are two reasons people become long-stay tenants. As I said earlier, it is about lifestyle and being able to be in affordable accommodation in a location that can be quite desirable. Again, as I have already said, that report found that we are talking about elderly people with not many assets and few opportunities. I think the important thing to note in that report’s findings, which is worth repeating, is that essentially these residents are one step away from having to be in public housing or even homeless. That is the vulnerability of the residents we are talking about trying to support. Once people are in a residential park, they often became trapped; they lose asset value if they move and are unable to find alternative similarly priced parks or other accommodation. The redevelopment of those parks in particular caused residents significant dislocation and often substantial hardship.
It seems to be a bit of a theme that a lot of people who buy into these parks are not necessarily fully aware of what they are buying into—that they do not own or have a lifelong lease over the land and their dwelling and can face imminent eviction. A lot of the time people do not seem to realise that. They also do not necessarily realise that even though they are buying a dwelling, that dwelling is depreciating over time while the value of the land belonging to the park operator is increasing. Some dwellings were being sold at vastly inflated prices, yet some dwellings deteriorate so much that it is not feasible to move them later on.
The Standing Committee on Legislation notes that the Economics and Industry Standing Committee in its 2009 report again confirmed that neither park operators nor long-stay tenants were happy with the act. Tenants were concerned about too little protection, whereas park operators were concerned that they had too much. There is contention around security of tenure, because even though the act requires agreements to be in writing, tenants felt their tenure was no more secure than before. Another source of contention was without grounds termination, with tenants resenting being required to relocate on only 60 or even 180 days’ notice without reason or compensation, and park operators saying that it was too difficult to evict problem tenants.
A third problem was with the marketing and sale of dwellings. Tenants were finding that they were selling their properties to buyers who did not fully understand the terms of the leasing of the site that the dwelling was on. The Economics and Industry Standing Committee did not recommend amending the act, preferring to focus instead on increasing the supply of alternative forms of affordable and available housing, including park homes and lifestyle villages on low-cost rural-zoned land. That report recommended that the government identify land suitable for the development of these sorts of long-stay caravan parks and vest this land in local government authorities either in perpetuity or in a 50-year lease. The report also recommended that the Department of Commerce disclosure booklet be urgently revised to contain a clear and explicit notification of the limits of a long-stay tenancy agreement.
A further report arose out of a request by the Legislative Assembly that the committee investigate the closure of park homes and mass eviction of long-stay tenants, particularly looking at what had happened since 2006, to check that Residential Parks (Long-stay Tenants) Act 2006 had been complied with. At that time, all parties agreed that the act, unfortunately, simply was not delivering the outcomes that it was meant to. It was the same committee as in 2011. The committee took the opportunity to follow up the extent to which its previous recommendations had been implemented by the government and its agencies. I note that the committee did not consider the adequacy of the act itself. There have been concerns about trying to get accurate data about park closures, but it did appear at that point that since 2006 about five parks had closed. That translated to a loss of about 323 long-stay sites. Those closures were happening because of increased land prices and increased operating costs that were luring operators into either selling up the subdivision or moving more into resort-style accommodation. That meant long-stay tenants were finding they were being evicted.
The committee noted that the Department of Commerce had begun compliance monitoring in 2010 and had audited 90 parks, but that proactive compliance monitoring was separate from the department’s reactive complaints process. Via that compliance monitoring, 51 breaches were identified. Some of those were multiple breaches by the same parks and 26 breaches related to a lack of disclosure by park operators. I asked at the briefing for current figures on the rate of compliance monitoring by the department and how many and what kind of breaches are being identified in that way. I was subsequently advised that there were 97 proactive visits between June 2016 and February 2019.
I have not yet been advised how many breaches were identified that way and what kind of breaches they were, so I am asking whether the minister can please now supply that information.
On the problem of residents not being aware of the tenure of what they were buying, the Department of Commerce produced a document that explains the rights and responsibilities of each party to a long-stay contract and also introduced a seniors housing advisory centre that provides information around the pros and cons of all the available accommodation options.
On the issue of supply that I spoke about before, the Department of Environment and Conservation was commended by the committee for its progress in increasing the supply of camping and caravanning facilities for short-stay tourists. In contrast, I note that the Department of Planning got brickbats from the committee for a lack of progress in finding and procuring land for caravanning or rezoning cheaper rural land for lifestyle villages. The Department of Planning at the time argued that such land would be better used for agricultural purposes and expressed concerns about the logistics of providing sewerage and reticulation requirements and the proximity of essential services for lifestyle village residents in rural-zoned areas. I note that, at the time, that position was agreed by the Department of Housing, but it suggested that lifestyle villages on the fringes of country towns could be a solution. However, I note that consensus on this issue was not agreed and the committee considered that the Department of Planning just needed to try harder, particularly in relation to the Peel, Bunbury and broader south west regions.
Problems with particular parks have been brought to the attention of the Parliament in both houses for some time. A grievance was raised in the other place about an operator that was charging tenants arbitrary entry and exit fees of something between $20 000 and $30 000, about which they had never been informed. Following that first grievance, a complaint of unconscionable conduct was taken to the Supreme Court by the Department of Commerce. There is a history of concern about poor operators that really demonstrates why we need urgent reform in this space.
By the time the statutory review of the act had been completed in 2017, tabled, and subsequently considered by the department, the final position was finally presented by government. It was that the act continue to apply to both site-only and dwelling tenancies, strata title caravan parks and virtually all non-holiday tenancies, with contracting out of the act and/or standard contract terms prohibited; content enforcement in the variation of park rules; disclosure to tenants and prospective tenants, including consequences for non-disclosure; and no mandatory minimum fixed-lease periods. It also referred to the need to remove termination without grounds for periodic tenancies and replace it with expanded grounds for termination, and that contracts should not automatically terminate upon mortgagee possession. The review went on to put a range of other things around the way that leases needed to operate; the compensation that needed to be made available, and how one could do that; what to do when a sole tenant dies; and restrictions on rent increases. There were various recommendations around fees and charges and what the responsibilities of operators need to be. It referred to some of the conduct that was expected of operators and to the role that the State Administrative Tribunal could play.
Finally, the minister in this government announced that cabinet had endorsed reform. As a result, we have this bill in front of us. The changes that it makes are largely faithful to what had been explored. I note that, if passed, the bill will come into effect after regulations have been drafted. A question I have for the minister is where the regulations pertaining to this bill are at. I certainly hope that they are at least close to being drafted, because a lot of time has passed. That would enable the legislation to occur sooner rather than later.
I am satisfied that this bill is much fairer insofar as it relates to new contracts. As I understand it, tenants on existing contracts, including future tenants to whom an existing contract is assigned, will not get the benefit of three very important protections: the prohibition in the bill on market rent review; the prohibition in the bill on contract terms that prevent a tenant from selling a dwelling onsite; and the protection against termination of the lease upon mortgagee possession if the mortgage were entered into before the commencement of the bill. The rationale for this is that there is a limit to how much government can interfere with private contractual arrangements, especially bearing in mind their impact on the viability of a residential park.
The preservation of rent provisions in existing contracts, in particular, periodic leases, is a matter that really concerns the Park Home Owners Association WA Incorporated. It says that about 28 per cent of park home owners are on periodic leases subject to 180 days’ notice, and that some of those existing contracts have a whopping increase in rent of six per cent annually, with the tenant having entered into the contract at a time when that was normal. That is just exorbitant. I do not know how that could ever be justified. I am very, very pleased to see that the Standing Committee on Legislation has confirmed that all long-stay tenants, whether on new contracts or existing contracts, including periodic leases, will be able to apply to the State Administrative Tribunal for relief if their contract terms are harsh or unreasonable. I think all members here would agree that a six per cent annual increase in rent or any other matter in the current environment would most certainly be harsh or unreasonable . That avenue has now been incorporated in clause 59. That is mentioned throughout the report of the Standing Committee on Legislation, but I once again ask the minister to please confirm for the record that the issue of the capacity to address harsh or unreasonable contract terms will apply to all long-stay tenants, whether existing or new.
As I said earlier, another thing that needs to improve is the managerial skills of residential park managers , because there are no trained professional managing agents who liaise between tenants and landlords, and the actions of one manager can affect a large number of residents. I have heard some pretty awful stories about how people have been treated by managers, sometimes because the managers simply do not know what they are doing, but sometimes it is a little bit more insidious than that. The retirement village sector is talking about requiring managers to get a certificate IV qualification, effectively. I acknowledge that although some residential parks are small, some are regional and some are mixed-use parks that may have only a few long-stay tenants, they still need to have some sort of training requirement. There is an absolute need for and merit to improving managers’ skills to a level that ensures that everybody is able to live a harmonious existence, and that problems are less likely to be encountered and can be addressed promptly and appropriately when they are.
I would like confirmation of my understanding from the briefing, which happened a very long time ago, that an education campaign about all parties’ rights and obligations will be rolled out with this bill . I am also aware of the department’s landlord handbook and would very much like to see the department develop something along those lines for park operators. I understand that New South Wales has tried requiring managers to undergo a short course, but the content has not proven to be as useful as it could be. I ask the minister in her response to please explain in detail what this government will do to ensure that residential park managers have the information they need to carry out their functions effectively, which will be of benefit to not only park operators, but also long-stay tenants.
As I have mentioned, under this bill, disputes will be determined by the State Administrative Tribunal. I understand that the State Administrative Tribunal does not expect its workload to increase significantly and it believes it has sufficient resources to deal with its responsibilities. I therefore ask the minister to please confirm for the record that this is the case. I also ask the minister to please advise the house of the current waiting time for a SAT determination.
Another issue, of course, is that although the SAT process is less formal than that of a court, the reality, particularly for seniors and vulnerable people—this was certainly borne out by the investigations and deliberations of the inquiry into elder abuse—is that SAT can be a really intimidating place. We need to ensure that park home owners who attempt to utilise SAT for some sort of remedy can do so in a way that is accessible and not intimidating so that the process can be used as it is meant to be. I therefore ask the minister: what support will be given to long-stay tenants to help them effectively use the SAT process? An obvious way is to ensure that Tenancy WA or a similar entity can be resourced to help vulnerable tenants navigate their way through.
Of course, ensuring that we continue to have a good supply of residential park sites means that more affordable housing options are available for everyone and it increases the chance that long-stay tenants who ultimately have to relocate for whatever reason will have somewhere to go. As has been said in previous committee reports from the other place, the supply of affordable housing such as this very much needs to be pursued. To this end, I note that it has been previously said that it is important to zone caravan parks in perpetuity and/or procure more land. In fact, quite a lot of criticism has been made about the lack of progress on this. Again, the Park Home Owners Association WA has approached the government about zoning caravan parks in perpetuity and I understand that Shelter WA has also been advocating for social housing to be made available at caravan parks. I am therefore asking the minister to please update the house on the progress it has made towards zoning caravan parks in perpetuity to assist with the continued supply of sites.
I was contacted by the Caravan Industry Association Western Australia which raised concerns about SAT determining last October that to be a park home owner as defined under the Caravan Parks and Camping Grounds Act 1995, the dwelling must be a means of transport and not merely moveable. Our concern is that this creates uncertainty, so the association was seeking to amend the definition of “park home” in the act. That is not one of the acts being amended by this bill. The term used in the bill and in the Residential Parks (Long-stay Tenants) Act 2006 is not “park home”, it is “relocatable home”, which is defined quite broadly. With the sender’s permission, I forwarded that correspondence to the minister’s office in March and I received a response recently. I therefore ask the minister to please confirm that the matter has been considered by a working group and the outcome is that although the bill is not being amended to address this issue because it has financial implications that would require Treasury consideration, current arrangements have been grandfathered and the Minister for Local Government will progress the necessary amendments. I understand that to be the case.
With those many comments—this is something I have been keen to see for quite some time, so I wanted to say quite a lot—I indicate once again that the Greens absolutely support this bill. We are particularly keen to get assurance from the minister that proposed section 62A will apply to existing contracts. I now look forward to going through the multiple amendments on the supplementary notice paper, many of which have arisen as a result of the good work of the Standing Committee on Legislation.
(Comments and speeches from various members)
Committee interrupted, pursuant to standing orders.