Nicholson v Hazelmere Village Home Park
[2010] QCAT 678
•27 May 2010
| CITATION: | Nicholson v Hazelmere Village Home Park [2010] QCAT 678 | |
| PARTIES: | Mr Alex Nicholson and others as listed in application lodged 22 September 2009 | |
| v | ||
| Gordon & Jeanette Gray t/a Hazelmere Village Home Park | ||
| APPLICATION NUMBER: | MH030-09 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 27 May 2010 |
| HEARD AT: | Hervey Bay |
| DECISION OF: | Simon Burgess, Member |
| DELIVERED ON: | 27 May 2010 |
| DELIVERED AT: | Hervey Bay |
ORDERS MADE: |
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| CATCHWORDS : | s.69, 70 of the Manufactured Homes (Residential Parks) Act 2003 – market review site rent increase |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Alexander Nicholson and other Residents of the Hazelmere Village Home Park |
| RESPONDENT: | Gordon Gray and Jeanette Gray trading as the Hazelmere Village Home Park represented by Mr Ahlfeld |
REASONS FOR DECISION
The applicants in this matter are the residents of the Hazelmere Village Home Park. They make application to set aside the market review site rental increase proposed by the respondents, Gordon and Jeanette Gray trading as the Hazelmere Village Home Park, who are the park owners.
The application is made pursuant to section 70 of the Manufactured Homes (Residential Parks) Act 2003. 65 residents have signed the objection to the proposed rental increase and have consented to being represented by Mr Alexander Nicholson.
The respondents were represented by Mr Ahlfeld. The site agreement provides for an annual CPI increase and the market review every 3 years. The relevant provisions of the site rental agreement that relate to a rental increase are at section 10 part 1, the schedule, and section 3.4 of part 2 which deals with the terms of the site agreement.
On 1 September 2009 the respondents gave notice of a proposed rental increase under section 69 of the Manufactured Homes (Residential Parks) Act. That notice is marked at page 47 of the applicants list of attachments.
By way of background, 70 residents of the Hazelmere Village lodged a similar objection application on 7 July 2008 following a previous attempt by the respondents to increase the rent pursuant to section 71 of the Act by notice dated 10 June 2008. That matter was heard by the Queensland Commercial and Consumer Tribunal and I note the decision of the Tribunal delivered on 27 January 2009. That matter was reported on the Manufactured Homes list of decisions in the database of the Queensland Commercial and Consumer Tribunal under the name of Billiard and Others v Gray and Gray. In that matter the Tribunal found that the proposed increase in the market rental to $130.00 per week was unfair and inequitable especially before the 2009 market review due in September 2009.
In the present matter the applicants submit “that the proposed site increase is excessive even given consideration that the site fee increase is occurring in a market review year”. The respondents essentially rely on 3 reports from 2 valuers in seeking to justify the proposed rent increase. The first report is dated 28 May 2008 and was from a Mr Alan Gees. I note the decision of the Queensland Commercial and Consumer Tribunal at the earlier hearing of the related matter, in particular, I refer to paragraphs 19 to 27 of that decision which dealt with the evidence of Mr Alan Gees. Most significantly I note paragraph 27 of the decision where the presiding member stated as follows:
“I accept the evidence of Mr Gees. His report has been carefully prepared and I am satisfied that the market rent for a site at the park is $130.00 per site per week. He noted that the sites at the park were larger than the other parks and it offered additional services such as extra road width, library, video and DVD library. I accept his evidence that the market rent is $130.00 per week per site. There were criticisms by Mr Nicholson but these criticisms concerned very minor issues and I accept Mr Gees evidence on all these issues where they conflict with the evidence of the applicants.”
In August 2009 the respondents obtained a further report from Mr Alan Gees dated 31 August 2009 who reassessed the fair market rent at $134.00 per week taking into account CPI increases which occurred to his previous valuation. The second report that the respondents relied on was from a second certified practising valuer, Mr Jamie Brown, dated 16 September 2009. That report is marked at pages 11 to 21 of the respondents annexures. Mr Brown concludes that, in his opinion, the market rent of the subject property as at 1 October 2009 is $132.50 per week per site. In my view that comprehensive report had been carefully prepared and I accept Mr Brown’s valuation.
Section 70 subsection 3 of the Manufactured Homes (Residential Parks) Act sets out the factors which the Tribunal may have regard to. In this regard I refer to the decision of the Tribunal dated 27 January 2009 and I adopt and reiterate the analysis and the consideration of matters as set out at paragraphs 30 to 35 of that decision. Further to this I note that Mr Brown in his report, listed the current weekly rental for comparable parks in the locality. The two most considered comparable estates in quality are Golden Shores at $136.50, but he noted it offers superior facilities and Sugar Coast at $127.27, which he noted is slightly inferior.
The final issue is whether the proposed increase is fair and equitable. As I understand it all the residents who are represented by Mr Nicholson on this application have signed a site agreement that provided for annual CPI increases and a 3 yearly market review rental increase. A number of the residents have tendered statements and many of them have sworn that the proposed rental increases would adversely affect their lifestyles. The common theme running through their statements is their surprise at how their rent is only going to be $1.90 per week less than Golden Shores when they feel that their park is a vastly inferior park.
[10] The applicant also relied on a report from a chartered accountant, Mr Drew Stevenson dated 10 December 2009. That report appears at pages 36 to 43 of the applicant’s material. I have read that report and taken into account the opinion of Mr Stevenson who asserts that, based on his analysis, he believes a fair rental increase would be in the order of 5% per annum. Mr Stevenson was called by the applicant as their first witness and confirmed in his evidence that he believed the proposed increase would cause financial hardship to some of the residents, especially taking into account there would be a back payment of some 34 weeks. He asserted that given the global financial crisis, most of these residents don’t have the opportunity to earn extra income to pay for the increased rent proposed. He noted that in the last 3 years on average the pension has increased by 4.8% and that is why he recommended a 5% increase would be fair in relation to the rent. He acknowledged that there would of course be an increase in the government rent assistance subsidy, which would mean that a couple would actually be out of pocket to the tune of $6.64 per week.
[11] Mr Nicholson gave evidence and he asked for this Tribunal to arrive at a fair and just result, given that, as he put it, people bought in to Hazelmere Village, bought in on a budget. He accepted that the park had been well kept but he asserted that there had been no amenities added over the last 3 years. He submitted that you couldn’t compare other parks and he suggested that if the rent was increased, or that rent increase sought was granted, it would make it very difficult especially for the number of the single ladies who are residents of the park. He asserted that residents would find it difficult to find the back rent. He asserted that, in his opinion, it was well known that the reason for the increase sought was to get a better sale price on the facility which has been on the market for over the last 12 months. He described the whole situation as being very dire for residents. He was cross examined on his affidavit dated 16 December 2009, by Mr Ahfelt. He was taken to his assertion at paragraph 10 that over the past 3 years the park owners, that is Mr Gray, have withdrawn their support to the residents and the only additional plant purchases have been a second hand ute. He accepted that he had no real evidence to support this assertion although he referred to support being withdrawn for the bingo and for the raffle. He maintained as per that statement, that the only plant that had been purchased over the last 3 years was the utility. He was shown annexure AJ at page 54 of the respondents material filed but he asserted that those matters were not improvements of a capital nature and were simply maintenance items. He, during cross examination, could really point to no evidence to support his assertions of “a lot of vandalism” (paragraph 14 of his statement) and it being not uncommon that many of the house owners had done renovations costing in excess of $30,000; and is unable to really specify how he came up with the figure of 90% where he stated at the top of page 20 “if the rent increase was granted, that it would put 90% of the homeowners in a very unachievable financial situation.”
[12] The respondents called Mr Jamie Brown, a qualified valuer from JB Ellis. He has over 5 years experience in the manufactured homes industry and has experience valuing manufacturing homes throughout Queensland. He confirmed that he reinspected Hazelmere as recently as yesterday and the comparable villages. Contrary to Mr Nicholson (who really seemed to suggest that the overall appearance of the village had deteriorated over the past 3 years), Mr Brown said that, in his opinion, Hazelmere facilities were quite good and they were just as good in comparison to other villages in the area. He noted that the out of pocket increase when one took into account the rent assistance subsidy that the government would provide would be only $6.75.
[13] Mr Gray gave evidence and confirmed that he had donated something in the order of 7 DVD players over the last couple of years and something in the order of $11,000.00 in books and DVD’s. I accept that he has carried out trimming of trees and bushes , when he is not required to, as under the site agreements he is only required to be responsible for maintaining the lawns. He confirmed the expenditure on plant and maintenance over the last 3 years, 2007, 2008 and 2009 as set out in annexure A to J from his tax records. I accepted his evidence. That would seem to fly in the face of the assertion by Mr Nicholson that the only plant that had been purchased in the last 3 years was a second hand ute. He referred to the rent subsidy figures that were outlined at page 56 of the respondents annexures marked annexure A to L.
[14] In closing submissions the respondents urged me to take into account that they had not just one but two independent valuers reports that supported their proposed rent increase; that the witness, Mr Brown, confirmed that facilities had been maintained and improved; and that the government rent subsidy and assistance meant that in respect of a couple, as outlined in annexure A to L, they would only be out of pocket in the amount of $6.64 per week.
[15] Mr Nicholson on behalf of the applicants in his closing submission submitted that there had really been nothing done to improve the communal facility over the last 3 years, saying that all that had been done was maintenance which should have been expected. He said that a three year market review should have only been embarked on effectively to retrieve extra expenses which he submitted had not been expended by the respondents. He asked that the Tribunal not back date the amount, pleading that a lot of the residents would be forced into a situation where they would have to sell their homes. In the end he simply pleaded for a fair and just conclusion.
[16] The applicants tendered a statutory declaration from a Mr Neil Lesley Waters who, as I understand it, is a local Real Estate Agent who gave a two page statutory declaration comparing 3 relocatable home parks. I have to of course take into account that Mr Waters was not made available for cross examination. That is no fault of his and I make no criticism of the applicants, but it is simply a matter that goes to the weight I can place on that document. The respondent submitted or tendered a news article from The Courier Mail dated Thursday 11 March 2010. As I understand the submission the respondent was making, they assert that it is unfair for the applicants, through Mr Nicholson, to ask that rent only be increased by the CPI when the National Seniors Association has recently successfully lobbied the government to allow increases in the pension of pensioners to be assessed not just consistent with the CPI but to be linked for the first time to male average earnings.
[17] The respondents also tendered, in exhibit 3, a receipt from Harvey Norman as evidence to confirm that Mr Gray had purchased a television. This was to support the contention of the plant that was purchased in annexure A to J, and to rebut the suggestion that really no extra facilities or amenities had been purchased. That document does appear to support a submission that there has been the purchase of other plant for the benefit to improve the facilities offered at this village.
[18] I take into account all of the factors as listed in section 70, paragraph 3 of the Act. In the end I am ultimately persuaded by the fact that the respondents obtained a second independent fair market rent valuation by Mr Jamie Brown in an effort to be fair to all concerned. I was impressed with Mr Brown as a witness. I do not accept that there has been the withdrawal of community facilities or services previously provided at the park. I accept that there has been some addition to the community communal facilities or services not previously at the park, or at least an ongoing provision as evidenced in the list of examples including the TV, books, DVD’s and DVD players.
[19] Taking into account all of the factors listed in section 70 paragraph 3 of the Act, I order that the site rent increase is allowed but only to the extent of $132.50 per week setting the new weekly rent in the amount of $132.50 per week. The increased site rent is payable from 1 October 2009. I thank the parties for their vigorous participation in these proceedings. That is the decision of the Tribunal.
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