Site fees in residential land lease communities

The initial site fees must be set out in each homeowner’s site agreement. Site fees can be negotiable. The initial site fees cannot be higher than:

• what the outgoing homeowner for the site was paying, or
• sites of a similar size and location in the community (whichever is the higher).

Method of payment

The operator and homeowner must agree on:

• the method(s) that site fees are paid (this should also be reflected in the site agreement)
• the frequency of payment.

An operator cannot require payment of site fees more than a fortnight in advance.

An operator must provide at least one cost-free way of paying site fees, which can include paying in cash at the community’s office or by direct debit.

Do operators need to give a receipt?

An operator must give a receipt for any site fees paid in person. If they are paid by any other method, the operator only has to give a receipt if asked for one.

Site fee receipts must include:

• the name and address of the community
• the name of the homeowner
• the homeowner's site number
• the amount paid
• any amount in debit or credit as at the date of payment
• the period covered by the payment, and
• the date the payment was received.

Site fee increase

Site fees can only be increased by:

• a fixed method set out in the site agreement, or
• notice from the operator.

Fixed method

Under this method there is an up-front agreement about how and when the site fees will increase. Increases in site fees can only use a single element such as the Consumer Price Index (CPI), a percentage of the Aged Pension, a set dollar amount or a set percentage.

Under the fixed method of site fees:

• any fixed method must be set out in the site agreement.
• the fixed method may be either for the duration of occupancy by the homeowner or for a shorter period specified in the agreement. Only one fixed method may be used in a site agreement. If more than one fixed method is specified, the method that results in the lowest increase is the applicable method.
• it is an offence for an operator to increase, or attempt to increase, the site fees other than in line with the agreed fixed method.

The agreement needs to specify how often the fixed method will be applied. The site fees must not be increased more than once a year unless the increase is tied to the age pension, then must not increase more than twice a year. Whenever the site fees are set to be increased, an operator still needs to give each homeowner at least 14 days prior written notice. The notice must specify:

• the amount of the increased site fees
• how the formula was applied, and
• the day from which the new amount is payable.

Home owners are not required to pay any increase unless they have received proper notice.

As the fixed method has already been agreed by the operator and homeowner, increases cannot be challenged in the NSW Civil and Administrative Tribunal. A homeowner might be able to challenge unfair contract terms under the Australian Consumer Law.

Notice method

Under this method, an operator must give all affected homeowners at least 60 days' written notice of a proposed increase in site fees. Under the site fee by notice method:

• increases cannot occur more than once in any 12 month period
• the notice must provide an explanation for the proposed increase including details about increases in costs for specific items that have contributed to the fee increase, and
• notice of the proposed increase must be given to all homeowners in the same community at the same time and take effect on the same day.

Download a copy of the model notice of site fee increase form.

An operator can give different increases to different groups of homeowners within the same community if they have legitimate and justifiable reasons. After a notice of a proposed increase has been given, an operator has the option to cancel it or reduce the increase by issuing another notice. A new notice does not have to give a fresh 60 days and the reduced increase can take effect from the date specified on the original notice.