Mr Fred Anton Harris (Chairman) H.V. Home Owners Association Inc v Hammond Villages Pty Ltd
[2011] QCAT 327
•12 July 2011
| CITATION: | Mr Fred Anton Harris (Chairman) H.V. Home Owners Association Inc v Hammond Villages Pty Ltd [2011] QCAT 327 |
| PARTIES: | Mr Fred Anton Harris (Chairman) H.V. Home Owners Association Inc |
| v | |
| Hammond Villages Pty Ltd |
| APPLICATION NUMBER: | OCL110-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 25 February 2011 |
| HEARD AT: | Southport |
| DECISION OF: | Ms Christine Trueman, Adjudicator |
| DELIVERED ON: | 12 July 2011 |
| DELIVERED AT: | Southport |
ORDERS MADE: | [1] That the Application be dismissed. [2] That pursuant to Section 69(2) of the Manufactured Homes (Residential Parks) Act 2003, the CPI increase is confirmed. |
| CATCHWORDS : | Manufactured homes site rent dispute –Deferral of Consumer Price Index (CPI) rent increase, rent increase not fair and equitable in the circumstances, two alleged increases in one year. Hammond Villages Pty Ltd v Residents of Hammond Village[2101]QCAT 186, Colgrave A.J. and other home owners v Emmetlow Pty Ltd [2008]QCCTMH 18, Palmpoint Pty Ltd T/A Bribie Pines Island Village v The Residents of Bribie Pines Island Village, Astbury, M & Hose, R.T. & P.A. [2008] QCCTMH 3 Regal Waters Retirement Community v The residents of Regal Waters as listed in ‘Annexure A’ in application lodged on 25 November 2008[2009]QCCTMH 15 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Fred Anton Harris (Chairman) H.V. Home Owners Association Inc |
| RESPONDENT: | Hammond Villages Pty Ltd, represented by the Park Manager of Hammond Village, Mr Neville Murray |
REASONS FOR DECISION
INTRODUCTION
[1] Mr Harris is the Chairman of the H.V. Home Owners Association Inc (the Applicant) and applies for an order that the tribunal find that the site rental increase pursuant to a Consumer Price Index (CPI) increase is excessive in the circumstances. Mr Harris represents the members of the Home Owners Association Inc pursuant to attachment “A”. Mr Harris stated that he represented 300 of the 375 residents of the park. Of the 245 sites at the park, there were 4 sites that were not represented at the hearing, being sites 24, 102, 210 and 75. A Notice was not issued to site 24 as the home owner had passed away. The new home owner of site 24 had purchased the home and moved in on 15 September 2010 and a new site agreement with the new increased rent as the agreed commencing site rent. Sites 102 and 210 were not proper parties to the proceeding as they had recently moved into the park and had also entered into site agreements at the increased site rental amounts. The owner of site 75 was not a proper party as she had sold her home on 19 October 2010 and no longer resided at the park.
[2] The Respondent Company is the registered owner of the Park land located at 22 Hansford Road, Coombabah in the State of Queensland. The park is a “residential park” as defined in Section 12 of the Manufactured Homes (Residential Parks) Act 2003 (Qld) (“the MHRP Act”).
[3] The Applicant contends that on or about 31 July 2010 the Respondent issued, pursuant to Section 69 of the MHRP Act the home owners associations’ members with a Rent Increase Notice claiming a rent increase of the CPI of 3.2% to take effect from 1 September 2010.
[4] The Applicant submitted and concedes that the CPI rent increase is calculated correctly pursuant to the terms of home owner’ site agreements and that the relevant CPI increase is at a rate of 3.2% over the past twelve months.
[5] The Applicants contend that the increase is unfair and unjust taking into account various factors which include;
(a) that the home owners costs had increased recently with the introduction of water charges
(b) that rent has increased recently as a result of a market rent review which was determined by this tribunal in April 2010
(c) that the market rent review order made in April 2010 was wrongly calculated as the amount was based on false information about rents at a comparative park, namely Emerald Gardens.
(d) that the Respondent could not issue two rent increases in the one year and was prevented from doing so by precedent set by Member Sheaffe in the “Regal Waters” case in 2009.
(e) that the market rent review increase and comparison to the rent paid at Emerald Gardens fails to take into account that the residents of Hammond Villages now are required to pay separately for water and lawn-moving charges which are included in the rent at Emerald Gardens and therefore is not an accurate comparison.
(f) that by taking into account water and lawn moving the rent paid by the residents of Hammond Village should be increased by between $12-$14 per week, thus making the top weekly rent of $132-134 higher than the rent at Emerald Gardens which has been determined as a superior complex.
(g) that based on all of the above it would be unfair and unjust to increase the rent again taking into account the recent rent increase and costs for the residents.
BACKGROUND
[6] The Respondent Village is comprised of two lots, being Lot 2 and Lot 10 that has approximately 245 homes established on an area of some 25 acres. The park has facilities including a Recreation Hall, tennis court, craft cottage, bowling green, bar-b-que areas, two swimming pools and a Manager’s residence.
[7] The park commenced operation in 1992 and was developed over 6 stages. The park was completed in late 1996.
[8] The park is purely a manufactured home park. The residents are restricted to over 50’s and home owners range from working people to seniors. The residents occupy their sites pursuant to a site agreement. There are three (3) different versions of site agreements in operation in the park. They are generally 57 Pre-Act site agreements that provide for rentals to be reviewed yearly, 92 Post Act site agreements which provide for annual increase in line with CPI and 96 Post Act site agreements that provide for both CPI adjusted rent increases and a review to market every three (3) years.
[9] Residents pay various amounts of rent in accordance with the date of their particular site agreement.
[10] A rent review was undertaken by Hammond Villages in 2009 under Section 71 of the MHRP Act instead of the usual CPI rent increase. This increase was to have taken affect on 1 September 2009. The Notices were issued on or about 26 August 2009 for the increase to take effect on 1 November 2009, the “increase” day.
[11] The Respondent issued Notices to the residents on or about 26 August 2009 in relation to utility costs pursuant to section 73 of the MHRP Act. The residents objected to that increase.
[12] On 9 June 2010 the parties attended a Tribunal Mediation and agreement was reached in relation to the utility costs. The Agreement was as follows:
The Application in matter OCL014-10 is withdrawn by consent.
For the period commencing 1 July 2010 until 1 January 2012, Hammond Villages Pty Ltd agreed not to charge the residents for waste water
For the period 1 July 2010 until 1 January 2012, the utility cost factor of $2.59 per week currently deducted from the site rent is withdrawn.
Hammond villages Pty Ltd agrees for the period between 15 July 2010 and 1 January 2012 not to levy a service charge for reading of water meters.
[13] On 31 July 2010 Hammond Villages Pty Ltd issued Notices pursuant to Section 69 of the MHRP Act of a rent increase of the annual CPI at 3.2% advising that the “increase day” would take affect on 1 September 2010.
[14] The Respondent served the residents with Notices of proposed rental increase pursuant to section 71(2) of the MHRP Act in August and September 2009. It was proposed to increase the rent to $128 per week. It was proposed that the justification for the rental increase was because the site rent should be increased in line with perceived market values and to bring the rent paid by all sites in line with each other and to be the same amount for each resident.
[15] While that matter had been heard and determined and should not be relevant to this matter, the Applicant seeks to rely on the reasons and decision of the Member at that hearing as evidence that the decision to increase the rent and order of 15/4/2010 was calculated after taking into account both the market rent review value and the CPI increase for 2009.
[16] The Applicant contends that the rent increase pursuant to the order made by Member Clarkson on 29 April 2010 includes the market rent review and the CPI adjustment. At the hearing Member Clarkson found at paragraph 54;
“ that a weekly site rent for the Village of $120 represents a fair market rent, having regard to the matters outlined in section 70(3) (a) of the Act. “
The Applicant relies upon the content of paragraphs 57, 68 and 71 of the Reasons for Decisions as evidence that the Member had considered, calculated and factored in the CPI increase when determining the market rent review. The Applicant relies upon that evidence to support his contention that the CPI increase for 2009 is included in this decision and should prevent the Respondent from seeking any further CPI adjusted rent increases.
[17] The Applicant submits that the CPI rent increase should not be permitted based on the fact that the residents have recently had an increase in cost of living at the Village by the introduction of Water costs and that they pay lawn moving costs.
[18] The current site rental amounts that were increased pursuant to the order made by Member Clarkson on 29 April 2010 were:
The site rent of respondents’ sites with site rent of $101.54 per week as at 18 November 2009 is increased to $109 per week, including GST, effective as from 15 April 2010.
The site rent of respondents’ sites with site rent of $109.11 per week as at 18 November 2009 is increased to $117 per week, including GST, effective as from 15 April 2010.
The site rent of respondents’ sites with site rent of $114.77 and $118.44 per week as at 18 November 2009 is increased to $120 per week, including GST, effective as from 15 April 2010.
[19] The Applicant concedes that the increase is validly and correctly calculated pursuant to the terms of the home owners’ Site Agreements and the increase is the CPI amount of 3.2%.
[20] The Respondent contends that the rent increase is reasonable and justified in all of the circumstances and that the increase was validly and correctly notified to home owners pursuant to Section 69 of the MHRP Act
LEGISLATION
[21] Relevant legislation includes sections 69 and 70 of the Manufactured Homes (Residential Parks) Act2003
[22] Section 69 provides:
69 Notice of increase in site rent
(1) This section applies if a site agreement--
(a) provides for an increase in the site rent payable under the agreement; and
(b) states how the amount of the increase is to be calculated.
(2) If the park owner wishes to increase the site rent under this section, the park owner must give the home owner a notice stating the following--
(a) the amount of the increased site rent;
(b) how the increased site rent has been calculated;
(c) the day the increased site rent is first payable (the increase day);
(d) if the home owner considers the increase is excessive, the home owner may apply to the tribunal, within 28 days after receiving the notice, for an order reducing the amount of, or setting aside, the increase.
(3) The increase day must not be earlier than 28 days after the notice is given.
(4) The increased site rent is payable from the increase day.
[23] Section 70 provides for a home owner to apply to the Tribunal for an order about a site rent increase where the park owner gives notice under Section 69 of the MHRP Act, it states:
70 Home owner may apply to tribunal for order about site rent increase
(1) This section applies if--
(a) the park owner for a residential park gives a home owner notice, under section 69, of an increase in the site rent payable under the site agreement between the parties; and
(b) the home owner considers the increase is excessive.
(2) On application by the home owner made within 28 days after receiving the notice, the tribunal may make any of the following orders--
(a) an order reducing the amount of the increase by a stated amount;
(b) an order setting aside the increase;
(c) an order confirming the increase on the conditions, if any, the tribunal considers appropriate;
(d) another order the tribunal considers appropriate.
(3) In deciding the application, the tribunal may have regard to the following-
(a) the range of site rents usually charged for comparable sites in comparable residential parks in the locality of the park;
(b) if it is impractical to obtain data for the range of site rents mentioned in paragraph (a), data is not available for that range or it is just and equitable to do so in the particular circumstances--the range of site rents usually charged for comparable sites in comparable residential parks in comparable localities to the locality the park is in;
(c) if it is impractical to obtain data for the range of site rents mentioned in paragraph (a) or (b), data is not available for that range or it is just and equitable to do so in the particular circumstances--general trends in rent for residential accommodation in the locality the park is in;
(d) the increased site rent compared to the previous site rent;
(e) the frequency, and amount, of past increases in the site rent payable under the agreement;
(f) any increase in the CPI number during the previous site rent period;
(g) the amenity or standard of the common areas and communal facilities;
(h) any withdrawal of a communal facility or service previously provided at the park;
(i) any addition of a communal facility or service not previously provided at the park;
(j) any increase in the park owner's operating costs for the park during the previous site rent period;
(k) whether the increase is fair and equitable in all the circumstances of the case;
(l) anything else the tribunal considers relevant.
(4) If, in deciding the application, the tribunal makes an order mentioned in subsection (2) (a) or (b), the park owner must refund to the home owner any overpayment of the site rent since when the increased site rent has been paid.
Maximum penalty--10 penalty units.
(5) An amount payable to the home owner under subsection (4) is recoverable as a debt.
(6) In this section--
CPI means the all groups consumer price index for Brisbane published by the Australian statistician.
previous site rent means the site rent payable under the agreement before the increase.
previous site rent period means the period commencing on the first day the previous site rent was payable and ending on the day the tribunal decides the application.
[24] Section 70 permits a home owner to apply to the tribunal to seek an order that the rent increase be reduced, or set aside the increase, to confirm the increase with conditions or an order that the tribunal finds appropriate in all the circumstances. The Applicant is seeking an order of the tribunal pursuant to section 72(b) to set the increase aside.
[25] In this case, the Applicants brought the application due to an assertion that the proposed increase, reflective of the CPI adjustment of 2%, was included in the market rent review hearing and decision in 2009 and encapsulated in the order made by Member Clarkson on 29 April 2010. Further, the Applicant seeks to rely on section 70(3) as relevant considerations that the Tribunal must consider in making its determination of the application.
[26] The onus lies with the Applicant to persuade the Tribunal to set aside the rent increase relying on their assertions that this CPI increase adjustment was considered and included in the order made by this Tribunal on 29 April 2010; and, that in all the circumstances the increase would not be fair and equitable in all the circumstances of this case.
THE EVIDENCE
[27] The Applicants relied on the findings of Member Clarkson in a previous decision of Hammond Villages Pty Ltd v Residents of Hammond Village [2010] QCAT 186 where at paragraph 68 of his reasons it states:
68. The parties acknowledge that if site rents had been adjusted in September 2009 in accordance with the provisions of the site agreements, there would have been an increase of approximately 2% along the lines of the movement in the CPI. This would have brought the respondents’ respective site rents to the levels outlined in the following table. Further, if those levels were then increased to the market rent as determined by the Tribunal, there would still be significant increases in rent for the respondents at the lower rent ranges, as the table also demonstrates:
| Existing rent | CPI increase at 2% | CPI rent (notional) | Further increase to $120 | Percentage increase CPI rent to valuation |
| $101.54 | $2.03 | $103.57 | $16.43 | 15.8% |
| $109.11 | $2.18 | $111.29 | $8.71 | 7.8% |
| $114.77 | $2.29 | $117.06 | $2.94 | 2.5% |
| $118.44 | $2.36 | $120.80 | Nil | Nil |
[28] The Applicants contend that Member Clarkson, when calculating the market rent review, stated that he started with the premise of a 2% inflation figure and called it a notional CPI adjustment and added a further 5% increase to allow for the market increase over and above CPI. The Applicants contend that the Member came to an overall 7% increase to the site rental amount factoring in the inflation amount. To support their contention the Applicants relied upon paragraph 71 of Member Clarkson’s reasons which state:
“The Tribunal concludes that a fair and equitable increase in site rents for the two lower range site rents is represented by a further 5% increase over and above the notional CPI adjusted site rent. That is, in effect, an overall increase of approximately 7% for the two lower range site rents which were applicable at the time the application was filed. This would result in weekly site rents for all the respondents’ sites as follows:
Site rent of $101.54 is increased to $109 per week;
Site rent of $109.11 is increased to $117 per week;
Site rent of $114.77 is increased to $120 per week;
Site rent of $118.44 is increased to $120 per week.”
[29] The Applicant further stated that the CPI adjustment increase, if allowed, would result in the home owners subjected to two rental increases in the one year. The Applicant contends that this is not permitted and relies on the reasons of Member Sheaffe in the decision of Regal Waters Retirement Community v The Residents of Regal Waters as listed in ‘Annexure A” in application lodged on 25 November 2008 [2009]QCCTMH 15 at paragraph 64 :
“In assessing this adjustment there is one significant factor that has to be taken into account. It is common place for a market review to occur every three years and a CPI adjustment in the in-between years. However, in this case, the applicant has not only claimed a market review increase in January 2009 but an annual CPI increase in July 2009. If the latter increase was permitted the new rental paid would be in excess of the market rent. Two increases in one year should not be permitted. However, to be fair to the applicant, it was said that the annual CPI notice was given as they had to comply with the time requirements prior to July 2009 and before this decision was handed down.”
[30] The Applicant stated that in his opinion the home owners had been subject to many increased costs recently and that this CPI increase in rent should be set aside. The Applicant gave evidence that the home owner’s had recently incurred water costs and paid mowing expenses at the Park. The Applicant estimated that these costs were approximately $5-6 per week for water and between $6-7 for lawn mowing. The Applicant stated that these two costs added between $11-13 per week for each home owner together with the highest weekly rent in the park of $120 pushed the weekly living cost to approximately $132.00 per week.
[31] The Applicant stated that when the market rent review hearing was conducted in April the evidence was that the weekly rent for Hammond Village should be no more than $120 per week. Expert evidence from Mr Jamie Brown, a Valuer, employed by CB Richard Ellis (C) Pty Ltd on the Gold Coast undertook a valuation for the Respondent. He provided a report and opinion as to the reasonable market rental amount for Hammond Village, when compared with comparable residential parks in the locality.
[32] At that hearing Hammond Village was found to be a similar park to Emerald Gardens, although slightly inferior. The rental amount of Emerald Gardens at the time was determined to be $124 per week. The Applicant stated that at the hearing the evidence was that the rent at Emerald Gardens included water and mowing. The Applicant stated therefore that the amount of weekly rent paid at Hammond Villages already exceeded that of Emerald Gardens which was a superior park. On this basis the Applicant stated that it would be unfair and unjust to again increase the rent with a CPI increase, further pushing the rents up and generally a higher real cost to the home owners who lived there. The Applicant stated that the home owners were largely pensioners and the increased water cost and rent review increase had financially impacted upon many residents.
[33] The Respondent called evidence from Mr Jamie Brown, at the hearing and provided to the Tribunal an updated Valuation Report dated 26 November 2010. This report provided additional evidence to a previous report he had prepared when the matter was before Member Clarkson and it was used at the hearing in April 2010. Mr Brown gave oral evidence and was cross examined by the Applicant.
[34] The evidence of Mr Brown was that the report he provided to the tribunal at the hearing in April 2010 was based on rents at the time of preparing his report and the valuations were prepared and dated 3 August 2009 and were therefore not accurate as to the current rents. He stated that when the report was prepared and the matter heard, some 8 months had elapsed and the rent amounts were perhaps not strictly accurate at the time the member’s decision was handed down. The Applicant was critical of the rental amounts estimated by Mr Brown and stated that Mr Brown did not take into account the cost for Hammond Village residents for water charges and lawn moving. Mr Brown gave evidence he did consider the water charge issue but was not sure about the lawn mowing costs and if they were taken into account.
[35] The relevance of the evidence of Mr Brown was challenged by the Applicant as it was stated that this hearing was not concerned with the market rent review and was limited entirely to a CPI adjusted rent increase. Mr Brown gave evidence that he was requested to provide a further report taking into account the CPI increase on 1 September 2010 to the rents at Hammond Village and a comparison to rents at similar residential villages in the locality that were current, he gave evidence and provided a schedule that found:
a)that Hammond Village with 245 sites had weekly rental amounts of $112.49, $120.74, $123.84 and $132.10 with separate water meters installed – last increase 1/9/2010
b)that Emerald Gardens with 216 sites had weekly rental amounts of $125.00 as the average and new site rents were all at $134.00 the last increase 1/9/2010
c)that other comparable manufactured home estates were compared to Hammond Village including Harbourside Retirement Resort, Settlers Village, Paradise Lakes Resort and Lewani Palms.
[36] Mr Brown stated that the recent CPI increase to Hammond Village on 1 September 2010 and the two bottom rents of $112.49 and $120.74 are not commensurate with other rents within the locality and the third rent of $123.84 is at the bottom of the range of comparable rents after taking into consideration separate water charges and that the top rent of $132.10 was within the range of comparable rents.
[37] The Applicant challenged Mr Brown’s estimation of rents alleging he failed to take into account the extra costs of water and mowing, and loss of some services. Mr Brown stated that some Parks charge for water and some do not despite water meters being installed. Mr Brown stated that the charging of water did not always impact on the amount of rent that was paid. Mr Brown stated that some parks offer various services and that if an Owner wanted to provide those services it was up to them. He gave examples of some parks providing for and paying for water, gardening, meals and that it was impossible to determine an “add on” cost for such services.
[38] Mr Brown stated that some complexes have large gardens with lots of lawns that have enormous gardening costs, others that had newer facilities that required less maintenance and that in totality the “added services” did not affect the rent. He gave evidence, that in his opinion, the amount of all centre facilities as a whole effected the value of the homes in the parks and the capital growth. He stated that some homes in the older parks with less services might sell for between $200-250,000.00 and that some in the mid range between $300-400,000.00 and some parks with many facilities and services selling homes for up to $800,000.00.
[39] The Applicant challenged Mr Brown and his report alleging that he failed to research and report on the average water charges for the village and how it affected the cost of the home owners to live there. Mr Brown gave evidence that he did not specifically research the average water costs for each unit in the Village as it was not requested of him to do so, but that he did include in his report which sites did or did not have separate water meters. He stated that he did not believe that the water consumption of each site would change his opinion of the value of the site rental amounts for Hammond Villages. Mr Brown gave evidence, that in his view, the CPI increase to the site rents were reasonable and the rental amounts were all within an acceptable range of comparable rents at comparable properties (including Emerald Gardens) in the locality.
[40] The Respondent gave evidence that there had been no rent increase in 2009 for CPI adjustment and disputed the evidence of the Applicant and the reasoning behind the decision of Member Clarkson and the order of 29 April 2010. The Respondent stated that the only order made on 29/4/2010 was for a market rent review and that a CPI increase was not included in the rental amounts that were determined to increase, effective from 15 April 2010.
[41] The Respondent stated that the CPI increase itself is very minor and will range from between $3.49 per week and $4.10 per week. The Respondent stated that the Applicants had not been subjected to excessive site rent increases in the past and have generally had the benefit of paying low site rents for a long time.
[42] The Respondent stated that the increase exactly reflects the increase only in the CPI during the previous site rent period, being 3.2%.
[43] The Respondent gave evidence that the Park is well maintained and compares reasonably well with Emerald Gardens and other comparable sites in the locality. Further, that no communal facilities or services provided at the park had been withdrawn.
[44] The Respondent alleges that the Rates for the property have significantly increased in 2009 and 2010 by 23.614% and 29.02% respectively.
FINDINGS
Section 70(3) (a) - site rent for comparable parks in the locality
[45] The Respondent has caused to be undertaken an analysis of site rents usually charged for comparable sites in comparable parks in the locality of the Park. The evidence of Jamie Brown, registered Valuer with CB Richard Ellis, is that the lower levels of increased site rents are below the site rents payable in comparable parks and the higher levels of increased site rents are commensurate with the site rents payable in comparable parks.
Section 70(3) (b) – Site rent increase compared to previous site rent
[46] The evidence provided to the tribunal indicates a comparison of the increased site rent with the previous site rents that were paid by the Applicants shows that the increase is minor and ranges from between $3.49 and $4.10 per week.
Section 70(3) (c) - Frequency of past increases
[47] The history of site rent increases that the Applicants have been required to pay are contained in Annexure “I” of the statement of Neville Jack Murray, the Manager of the Park and who appeared for the Respondent. That summary indicates rental increases for the Applicants from 2007 to 2010 has been:
Lowest Average highest
(a) For 2007 Increase $96.61 $103.82 $112.69
(b) For 2008 $101.54 $109.11 $118.44
(c) For 2009 $109.00 $117.00 $120.00
(d) For 2010 $$112.49 $120.74 $123.84
There was evidence of the highest rent paid in 2010 being $132.10 per week but that was due to new site agreements being signed by residents who signed agreement in 2009 and 2010.
Section 70(d) - CPI increase
[48] The increase sought to be imposed on the residents is the CPI during the previous site rent period, being 3.2%. This amount is not disputed by the Applicant as the correct CPI amount.
Section 70(e) – Standard of common areas and facilities
[49] The park is well cared for and maintained. In the recent decision of Hammond Villages Pty Ltd v Residents of Hammond Village [2009] QCAT MH034-09 the tribunal found that the park was “reasonably well maintained” and overall “compares reasonably well with Emerald Gardens and other comparable parks in the locality” at paragraph 58.
Section 70(3) (f) – Withdrawal of facility or service
[50] During the last twelve months there is no evidence that any communal facilities or services provided at the Park have been withdrawn.
Section 70(3) (g) – Addition of communal facility or service
[51] The tribunal was not provided with any evidence that indicated that there had been any addition of communal facilities or services that were not previously provided at the park.
Section 70(3) (h) – Increase in park owner’s operating costs
[52] The Respondent gave and produced evidence that the Gold Coast City Council (“GCCC”) rates for the Respondent park (including water and wastewater charges) had increased by 23.614% for the period 2009 to 2010, (from $181,257.51 to $224,060.26), which was an increase of $42,802.75 over the previous year. The Respondent stated further, that the Respondents rates (exclusive of water and wastewater charges) payable to the GCCC had increased by 29.02% (from $83,937.35 for 2009 to $108,294.25 for 2010) which was an increase of $24,356.90 over the past year.
[53] The significant increase in the operating costs of the park is a matter that should be taken into account. I accept that the Respondent Park is a business that must remain economically viable to operate efficiently and continue to produce a benefit and service to the residents. It must also produce a profit and a commercial return to its owner.
Section 70(3) (i) – Whether increase is fair and equitable
[54] When considering whether the increase if fair and reasonable in the circumstances of this case the Respondent gave evidence that, at its election, it does not charge GST on site rents payable at the Park, despite the Respondent being permitted to charge, should it wish to do so.
[55] The Respondent contends that the increase is minimal and is affordable in al the circumstances considering the relativity of the increase as compared to increases in the pension and rent assistance rebates and increases in pensioner rate rebates. The Respondent produced a spreadsheet showing a comparison of pension income to site rent payable over the past 11 years (for both single and double pensions) indicating as a percentage of the pension, that the increased site rent is affordable for home owners.
[56] The Respondent contends that the evidence contained in the spreadsheet shows that the site rent, expressed as a percentage of the pension, has decreased over time and continues to decrease.
FINDINGS
[57] I find that the Respondent issued Notices on 31 July 2010 advising of an increase in the site rent which was calculated pursuant to the terms of the home owners’ site agreements. I find the Notices set out the amount of the increased site rent and comply with Section 69(2) of the MHRP Act. I find the Notice of Increase in Site Rent was validly and correctly notified to home owners and issued in compliance with Section 69 of the MHRP Act.
[58] I find that the previous decision of this tribunal on 29/4/2010 relates specifically to a decision regarding an application for market review of site rent only and did not include a CPI increase for the period of 2010. I am satisfied the tribunal order of 29/4/2010, although made in 2010 did not contemplate and include the CPI increase for that year. I do not agree with the Applicants and their contention that the residents will be subject to two rent increases in the one year. I find the rent increase in 2009 was an increase relating to a market review and the increase in 2010 due to a CPI increase, permissible pursuant to the owners site agreements.
[59] I find that the Applicants have not disputed the manner in which the increase had been calculated, just that they dispute the amount of the increase. I find that in fact the home owners have expressly agreed to a CPI increase in their site agreements.
[60] I find the CPI amount used is correct as the increase percentage change is in the all groups consumer price index for Brisbane published by the Australian statistician as at June 20101, therefore the amount of 3.2% is correct.
[61] I find that the evidence in the spreadsheet produced by the Respondent showing site rents, expressed as a percentage of the pension, has decreased over time and continues to decrease. I find that the result is that the site rent is taking up less of the pension than before, resulting in more pension funds being actually available to home owners. I find that the evidence supports the contention that the CPI increase is affordable.
[62] I find that the residents have not been subject to excessive site rent increases in the past, and in fact, I find that the Applicants and home owners at the Park generally have had the benefit of paying low site rents for some time.
[63] The Applicant claims that the residents cannot afford the site rent increase. The Applicant did not produce any evidence to the tribunal to support that contention. The Applicant gave evidence that the financial circumstances of the residents was to such an extent they could not afford to pay the rent increase. However, the Applicant did not produce evidence of tax returns, income or sworn affidavits or statements of the financial position of the residents to prove that they were in dire financial circumstances. I reject that contention made by the Applicant as I cannot make any finding of fact, in the absence of the relevant evidence that the Applicants cannot afford to pay the rent increase.
[64] In all of the circumstances I find that the Respondent seeks to apply the CPI increase for the period 2010. I find that the home owners have expressly agreed to the increase in the terms of their site agreements and expect to pay such CPI increase each year.
[65] I find that the Applicants have failed to produce to the tribunal any expert valuation evidence that supports their contention that the rent is high when compared to comparable parks.
[66] I find that the CPI increase is fair and reasonable. I find that it would be unfair and unreasonable to the owner of the Respondent Park to set aside or vary the CPI increase. I find that the increase is reasonable and justified having regard to the Section 70(3) factors. I find that the onus is on the Applicant to establish that the increase ought to be set aside. On all of the evidence provided to the tribunal the Applicant did not provide the evidence sufficient to support the orders they seek. I therefore find that the Applicants application must fail and I therefore make the following orders.
ORDERS
[67] That the Application be dismissed.
[68] That pursuant to Section 69(2) of the Manufactured Homes (Residential Parks) Act 2003, the CPI increase is confirmed.
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