Residents of Colonial Village v Emmetlow Pty Ltd
[2011] QCAT 563
•14 November 2011
| CITATION: | Residents of Colonial Village and Anor v Emmetlow Pty Ltd [2011] QCAT 563 | |
| PARTIES: | Residents of Colonial Village Mr Gary Lucadou-Wells | |
| v | ||
| Emmetlow Pty Ltd | ||
| APPLICATION NUMBER: | OCL164-10 / OCL167-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 30 August 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr J Allen, Member |
| DELIVERED ON: | 14 November 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | (1) The site rent increase effective as of 8 November 2010 is reduced from $192.95 per week to $183.75 per week, inclusive of GST. (2) Emmetlow Pty Ltd will refund to the Applicants any overpayment of site rent which have occurred in the period from 8 November 2010 until today’s date by 4.00pm on 30 November 2011. |
| CATCHWORDS: | Market rent review – manufactured homes Manufactured Homes (Residential Parks) Act 2003, ss 69, 70 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr Alan Colgrave represented the Residents of Colonial Village |
| RESPONDENT: | Ms Marika Thauer, Park Manager |
REASONS FOR DECISION
Introduction
The Applicants own and reside in manufactured homes which are located at Colonial Village, a mixed-use tourist park and manufactured home site at Taigum. Under the agreements they have with the owner of Colonial Village, Emmetlow Pty Ltd, they are subject to market reviews of the site rent they pay to the owner for use of the land on which their manufactured homes are placed. Each of the applicants received a Notice of Increase in Site Rent[1] dated 8 October 2010, which in all cases increased the site rent to $192.95 per week inclusive of GST with a $5.00 discount for early payment. The Applicants considered the increase in site rent excessive and made applications to the Tribunal to review the increase in site rent[2]. The Tribunal may reduce the amount of the increase, set aside the increase or confirm the increase in site rent[3]. In determining the application the Tribunal may have regard to the matters set out in the Act[4] and the parties have framed their material and made submissions at the hearing around those matters.
[1] Section 69 of the Manufactured Homes (Residential Parks) Act 2003.
[2] Section 70(2) of the Manufactured Homes (Residential Parks) Act 2003.
[3] Section 70(2) of the Manufactured Homes (Residential Parks) Act 2003.
[4] Section 70(3) of the Manufactured Homes (Residential Parks) Act 2003.
Colonial Village
Colonial Village was described as follows in the valuation of Mr Jamie Brown[5], which was prepared for Emmetlow Pty Ltd:
“Colonial Village” is located on the northern side of Beams Road, Taigum, approximately 13.4 kilometres north of the Brisbane CBD with local neighbourhood shopping and transport available within walking distance. The village comprises 58 permanent residents operating under the Manufactured Homes (Residential Parks) Act 2003 (and previous 1989 Act) and a tourist resort component plus motel. The permanent residents are not precluded from using the tourist parks facilities. These include:
Inground pool/wading pool
BBQ facilities
Half size tennis court
Restaurant
Recreation room
Convenience store
Security entrance
[5] Exhibit 2 Statement of Jamie Brown 16 August 2011.
Onsite management”.
Mrs Thauer in her statement[6] elaborated on the facilities available at Colonial Village and noted
the proximity that Colonial Village had to all major transport routes, schools community clubs, easy access to major areas of employment, shopping centres, cinema complexes and general sporting facilities and hospitals. The layout of the park is described as being aesthetically pleasing with roads radiating from a central roundabout and terminating at various cul de sacs, which eliminates much traffic annoyance.
[6] Exhibit 1.
The Applicants have not provided any evidence or made any submissions contrary to the above as at the date of the increase in site rent.
APPLICATION OF SECTION 70 FACTORS
Range of Site Rents in the locality
This requires an analysis of the site rent charged for comparable sites in comparable residential parks in the locality of Colonial Village. Emmetlow Pty Ltd and its valuer, Mr Brown considers that Gateway Village at Rochedale and Brisbane Holiday Village at Eight Mile Plains are comparable parks. These are both mixed use parks with manufactured homes which cost similar amounts on entry. The Residents and Mr Lucadou-Wells also consider that Golden Downs at Fitzgibbon and other parks at Burpengary are comparable.
Golden Downs is close to Colonial Village but it operates solely as a manufactured home park and the cost of buying manufactured homes in the park was considerably higher than that for Colonial Village. The decision of Member Spender of the former Commercial and Consumer Tribunal[7] took these factors into account when determining that Gateway Village and not Golden Downs was a comparison park for Colonial Village. In the same decision Member Spender determined that the locality was the whole of Brisbane and therefore parks outside of Brisbane such as those at Burpengary cannot be said to be in the locality.
[7] Residents of Colonial Village v Emmetlow Pty Ltd [2007] QCCTMH 22 at para 29.
The relevant weekly rents excluding water and electricity at Gateway Village in accordance with Mr Brown’s valuation are as follows:
Number of Sites Rent
18 $192.35
3 $182.55
45 $173.25
Mr Brown noted that the owner of Gateway Village is currently promoting the resort as a tourist park and over time will reduce the amount of permanent residents. Which is being achieved by a negotiated purchase of homes.
The above rental figures agree with those detailed in a letter dated 27 August 2010 from the manager of Gateway Village which was sent to Mrs Thauer and included with her statement[8]. The different rental amounts are explained as follows:
The three levels of site rent stem from a decision made by the Commercial and Consumer Tribunal on 17 December 2008 in relation to our 2008 Market Review (as at 1 July 2008) We regard the highest level as our market rent as at 1 July 2008 increased by CPI since that date. As and from 2 February 2009 each home owners site rent was reduced by $6.70 per fortnight (the “utility cost’ of water at that date). Water has been charged separately since that date.
[8] Annexure “N” Exhibit 1.
[10] The Brisbane Holiday Village average site rent in accordance with Mr Brown’s valuation was at the relevant time $174.41 per week. He also noted that the park has a small collection of manufactured homes with the remainder of the park operating as a tourist park and that the park is gradually purchasing homes in order to solely operate as a tourist park.
[11] Mr Brown in his valuation considered the rental range which currently reflects the market is between $173.25 and $192.35 per week. He then looked at sites at Colonial Village and stated
I have also taken into consideration those sites within the subject that are currently charged at the highest rate of $183.75 per week (6 sites), These rents were set in 2009 after an increase of a flat 5% (as per individual agreements) and would ultimately increase to $192.95 (rounded) after a similar annual increase.
The figure is slightly higher than the latter range of current market rents from comparable parks (set in July to September 2010) however is considered to reflect current market after taking into account quarterly increases in CPI up to and including the date of determination.
[12] The residents asked Mr Brown at the hearing to explain why the site rent determination arrived at for Gateway Village based on the 2008 Commercial and Consumer Tribunal decision should not apply. He stated that rents have increased since then, that it would not be reasonable to rely on that decision and that you need to look at most recent agreements.
[13] Mrs Thauer had set out the site rents which resulted from the most recent agreements at Colonial Village in her statement[9] as follows:
[9] Exhibit 1 page 16.
Site Surname Site Agreement Agreement Rent Current Rent
Mitchenson 12.06.10 $183.75 $192.95
Stigwood 30.06.09 $183.75 $192.95
Capper 31.10.08 $175.00 $192.95
Gant 13.08.09 $175.00 $192.95
Vance 22.10.10 $192.95 $192.95
Mitchell 20.06.08 $175.00 $192.95
Adcock 18.02.09 $175.00 $192.95
[14] The above figures demonstrate how the site rent of $192.95 has been derived from a 5% annual increase applied to a base figure of $175.00 per week set in 2008 by Emmetlow Pty Ltd.
[15] The Tribunal accepts the evidence of Mr Brown that the range of site rents applicable to Colonial Village is $173.25 to $192.35.
General trends in rent for residential accommodation in the locality
[16] Mr Brown investigated weekly residential rents and increase in capital values in the Taigum area due to a lack of comparable parks. His findings were as follows:
Brisbane rentals
Brisbane north 2008 2009 2010
2 br unit $310 $320 $330
3 br home $380 $390 $400
Median unit prices
Capital growth 2008 2009 2010
Taigum 20.4% 3.2% 5.6%
Median house prices
Capital growth 2008 2009 2010
8.5% 2.6% 6.4%
[17] Mrs Thauer had also provided statistics from the Residential Tenancies Authority which she stated showed an increase of between 2 and 23% over the last three years, she did not extract any figures from the material provided and the Tribunal therefore does not know what she based those figures on.
[18] The Residents provided similar material from the Residential Tenancies Authority to Mrs Thauer for the period 2008 to 2010 and analysed them as follows:
Median rental price movement 2008-2010
Rental increases in Brisbane (entire metropolitan area)
1 Br flat/unit = +12%
2 Br flat/unit = + 5.7%
3 Br flat/unit = +10.25%
2 Br Houses = +6.06%
3 Br houses = + 5.55%
4 Br houses = + 7.14% average 7.78%
Brisbane (outer north)
1 Br flat/unit = +4.76%
2 Br flat/unit = + 6.66%
3 Br flat/unit = Nil
2 Br Houses = +5%
3 Br houses = + 5.88%
4 Br houses = + 5% average 4.55%.
[19] The Tribunal is satisfied that there is no need to rely on residential rents as there are comparable parks in the locality.
The increased site rent compared to the previous site rent
[20] The site rents payable by the Applicants differ due to the fact that they have entered their site agreements with Emmetlow Pty Ltd at different times. Mrs Thauer set out a table comparing the new and old site rents for the Applicants in her statement as follows:
| Name | Site | Previous site rent | Increase | Increased site rent |
| Christine Capper | 64 | $183.75 | $9.20 | $192.95 |
| Joe & Ilma Taylor | 65 | $157.08 | $35.87 | $192.95 |
| Grace Appleton | 66 | $169.43 | $23.52 | $192.95 |
| Colleen Pelling | 68 | $165.50 | $27.45 | $192.95 |
| Harry Gradwell | 75 | $169.43 | $23.52 | $192.95 |
| Greg Pomroy | 78 | $169.43 | $23.52 | $192.95 |
| Aileen Bennett | 81 | $157.08 | $35.87 | $192.95 |
| Delfine Valentine | 83 | $157.08 | $35.87 | $192.95 |
| Mr & Mrs Biasse | 84 | $157.08 | $35.87 | $192.95 |
| Patrick Mitchell | 87 | $183.75 | $9.20 | $192.95 |
| Peter Langdon | 100 | $165.50 | $27.45 | $192.95 |
| Shirley Mahwinney | 103 | $165.50 | $27.45 | $192.95 |
| Marlene Lawrence | 104 | $165.50 | $27.45 | $192.95 |
| Margaret Tebb | 118 | $165.50 | $27.45 | $192.95 |
| John Greaves | 127 | $165.50 | $27.45 | $192.95 |
| Gary Lucadou-Wells | 38 | $165.50 | $27.45 | $192.95 |
[21] The increases in site rent are either $9.20 per week (5%), $23.52 per week (13.88%), $27.45 per week (16.58%) or $35.87 per week (22.83%).
The frequency and amount of past increases in the Site Rent
[22] All of the site agreements the subject of the application provide for annual increases based on a formula and three yearly market reviews. Mrs Thauer set out a table of these in her statement[10]. Some residents received a market review in 2006 which was subject to the abovementioned Commercial and Consumer Tribunal decision which resulted in a site rent of $140.00, this was a reduction from the amount of $147.65. Other residents received a market review in 2007 which increased their site rent to $151.50. That increase was confirmed by a decision of member Sheaffe in the Commercial and Consumer Tribunal[11]. Following the market reviews all site rents have been increased. Either in accordance with the formula which includes components for the consumer price index (CPI) and changes in rates and land tax, though Colonial Village is no longer subject to land tax or by a flat 5% in respect of the latest agreements.
[10] Exhibit 1 Annexure “Q”.
[11] Colgrave, A.J and other home owners v Emmetlow Pty Ltd [2008] QCCTMH 18.
Any increase in the CPI during the previous site rent period
[23] The Notice of Increase in Site rent stated that the applicable CPI had increased by 3.2% which subject to the formula used in respect of most site agreements would result in a 4% increase in site rent for those home owners subject to the formula. The Applicants agree that the CPI increase is as stated by Mrs Thauer. The various site rents would increase as follows if the CPI formula or 5% uplift factor were applied.
Current site rent Increase factor New site rent
$157.08 4% $163.36
$165.50 4% $172.12
$169.43 4% $176.20
$183.75 5% $192.95
The Tribunal notes that these figures are slightly different to those set out in the relevant notices.
Amenity or standard of the common areas and communal facilities
[24] Mr Brown stated in his report that he had viewed the general state of repair of the subject and have assumed that the improvements are reasonably structurally sound, considering their age. He later described the quality of facilities of the facilities as good. Mrs Thauer considered that the common areas and facilities to be of a high standard. Photos provided of the pools and the areas around the homes showed that they were well maintained. The Applicants apart from Mr Lucaudou-Wells did not raise any issues in this regard. Mr Lucadou-Wells raised concerns about a mould and mildew problem and the state of the tennis court surface. The issue with mould and mildew was said by him to relate to the fact that water from roof gutters is not connected to the storm water system. Mrs Thauer acknowledged that this was the case and stated that at the time Colonial Village was developed it was not a requirement. The Tribunal notes that this issue can be dealt with by the cleaning of walls and that Colonial Village had advised that its staff could assist, although this may have been at a cost.
[25] Mr Lucadou-Wells provided photos of the tennis court which showed that its surface was cracked. Mrs Thauer stated that this was a result of the ending of the drought and the fact that the surface was clay.
Any withdrawal of a communal facility or service previously provided at the park
[26] According to Mrs Thauer’s statement there had been no withdrawal of a communal facility or service. The residents stated a spa/sauna had been removed from the swimming pool area and that the water and fire services were withdrawn from the site rent. The removal of water charges from the site rent was subject to a Commercial and Consumer Tribunal decision[12] and has been approved. Mrs Thauer was not questioned at the hearing in regard to the spa/sauna. Mr Colgrave queried Mr Brown about the fact that the restaurant which had operated at Colonial Village closed this year. Mr Brown stated this was outside of the period of the valuation of site rent. The Tribunal concurs that it is the facilities as at the date of the site rent review which should be taken into account.
[12] Residents of Colonial Village v Emmetlow Pty Ltd [2007] QCCTMH 22.
Any addition of a communal facility or service not previously provided at the park
[27] Mrs Thauer in her statement considered that a state of the art LG Aria digital phone system which was installed in 2008 at a cost of over $40,000.00 constituted an addition of a communal facility. The Tribunal notes that the telephone service is not included in site rent and therefore this does not constitute a communal facility.
Any increase in the park owners operating costs for the park during the previous site rent period
[28] Mrs Thauer noted in her statement that the cost of electricity and water had increased dramatically and that there was a 782% increase in the rateable value of the land. The Residents and Mr Lucadou-Wells raised concerns that the site rent was subsidising other parts of the business in respect of the holiday cabins and motel. Mrs Thauer when questioned on this at the hearing confirmed that the site rent does not subsidise any other areas of the business. The Tribunal notes that there was no material put before the Tribunal by Mrs Thauer to show any overall increase in costs in the running of Colonial Village which was attributable to the manufactured homes. Nor was there any evidence provided to support the contention that the site rent was subsidising the other parts of the business.
Whether the increase is fair and equitable in all of the circumstances of the case
[29] Emmetlow Pty Ltd in accordance with Mrs Thauer’s statement noted that site rent is not subject to GST and that this has been done to minimise site rents for homeowners. Mrs Thauer was not able to provide any detail of the effect of this on Emmetlow Pty Ltd, such as the GST on park related costs which had to be absorbed by the park owner. It was also noted that none of the residents had informed Emmetlow Pty Ltd that they could not afford the increase. The tribunal confirms that there was no specific evidence raised by the Applicants as to the affordability by them of the increase.
[30] The Tribunal also has regard to the fact that the site rent of all residents has been increased to the same amount and so the impact on some will be more than on others as set out earlier in these reasons. Therefore the fairness of the increase needs to be considered in respect of each group of residents who are paying a particular amount of site rent. As noted above the increases range between 5% and 22.83%. The Tribunal also notes that all residents no matter what site rent they pay receive the same service from Emmetlow Pty Ltd.
Conclusion
[31] There have been no grounds raised which would support an increase in the site rent based on the common areas and facilities of Colonial Village or any increase in costs to Emmetlow Pty Ltd. While Colonial Village has been well maintained there have been no increases or deceases to the common areas or facilities as set out above.
[32] The increase in site rent rests on the agreements which Emmetlow Pty Ltd has been able to enter with new residents and the market rent set at Gateway Village. None of these agreements have been entered at a site rent of $192.95 prior to the date of the market rent review. That amount has been extrapolated from an increase in the rate of those agreements by 5% in accordance with the agreements. In regard to Gateway Village there was no evidence that any agreements had been entered at the site rent of $192.50, it being stated that this was what the operator considered to be the market rent as at 1 July 2008 increased by CPI.
[33] The site rent set by Emmetlow Pty ltd of $192.95 was just above the range found by Mr Brown of between $173.25 to $192.35. It was set at this point because it represented the adjusted rent which would be paid by those who had recently entered agreements to reside at Colonial Village. No agreements had been entered at that site rent though. Having regard to the fact that some residents will experience a 22.82% increase in site rent the Tribunal does not consider it fair that the site rent be increased to a rate outside of that which new residents have agreed at the time of taking up their residents. The latest agreements entered prior to the market review were for a site rent of $183.75 and the Tribunal considers this to be a just and equitable site rent.
[34] Emmetlow Pty Ltd will be ordered to repay to the applicants the overpayment of site rent made since 8 November 2010.
Orders
[35] The Tribunal makes the following orders:
(1)The site rent increase effective as of 8 November 2010 is reduced from $192.95 per week to $183.75 per week, inclusive of GST.
(2)Emmetlow Pty Ltd will refund to the Applicants any overpayment of site rent which have occurred in the period from 8 November 2010 until today’s date by 4.00pm on 30 November 2011.
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