INCREASING SITE FEES:
YOU DESERVE AN EXPLANATION
Home owners in land lease communities understand that their site fees can increase and most are used to having an increase every year. Receiving a site fee increase might not come as surprise, but big or small, home owners want to know the basis for the increase. And for many homeowners it is now their right to receive an explanation from the operator.
When the Residential (Land Lease) Communities Act 2013 (the Act) came into force at the end of 2015 it introduced a number of changes to site fee increases. One of the positive changes for home owners is that operators are now required to provide an explanation for a site fee increase ‘by notice’.
There are two ways that site fees can be increased under the Act – ‘fixed method’ (these are written into the site agreement, and cannot be challenged) and ‘by notice’. In both situations the operator is required to provide home owners with a notice of increase but only increases ‘by notice’ are required to contain an explanation. The intention behind this new requirement is to enable home owners to understand the need for the level of increase being sought by the operator.
Jill Edmonds, President of the Independent Park Residents Action Group (IPRAG) and a home owner at Central Coast’s Karalta Court, received her annual notice of increase in April. The explanation in the notice was “We have assessed various issues as they impact the community since the last increase and determined that the site fees be increased as set out in this approved form notice of site fee increase.” When Jill read this explanation, she felt it prompted a whole lot more questions than it answered. Was this really the kind of explanation intended in the Act?
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