Submissin t the Residential Tenancies Act Review Fairer Safer Husing I write this submissin as the wner and peratr f the Lg Cabin Park in Langwarrin, a suburb f the City f Frankstn. Our caravan park is cmprised f 150 sites, f which 27 are Part 4A sites, r wner-renters, and the remaining 123 sites are available t renter-renters. That is, the sites cntain furnished, heated and air cnditined cabins which are available fr medium t lng term rental t caravan park residents. My father, Rbert Brwn, established the caravan park in the early 1980s. Rbert has an extensive backgrund in prperty develpment after graduating frm University f Melburne s MBA prgram in the 1970s. Prir t jining my father in perating the business full time in 2008, I wrked in Prperty Valuatin and was emplyed in an executive psitin with the Victrian Caravan Parks Assciatin. As the caravan park industry has matured ver the past 30 years, peratrs have becme increasingly prfessinal and infrmed in ur management apprach, largely thrugh the infrmatin, educatin and supprt prvided by industry assciatins including the Victrian Caravan Parks Assciatin and the Real Estate Institute f Victria. We regularly attend cnferences with the caravan parks Assciatin and three f ur staff members have undertaken frmal training with the Real Estate Institute f Victria. Our caravan park is situated in an Industrial zne, thugh the surrunding develpments are a mixture f residential and cmmercial prperty. Our caravan park residents enjy easy access t public transprt, lcal schls, TAFEs, hspitals, public swimming pls, the freeway netwrk and tw majr shpping centres. Acrss the rad frm the caravan park is the McClelland Gallery and Sculpture Park, an internatinally significant art gallery established in the 1970s and develped by the late Dame Elisabeth Murdch AC DBE. Frm a persnal perspective, my family and I lived in the caravan park frm 1985 until 1993 s I can persnally endrse ur caravan park and its lcatin as cmfrtably liveable. We cnsider that we are prviding affrdable, safe residential accmmdatin f a satisfactry standard t relatively high-risk residents. Frankstn ranks as the 8 th mst disadvantaged municipality in metrplitan Melburne accrding t the SEIFA Index (Sci-Ecnmic Indexes fr Area) 2011 1. In additin t issues f lw incme, high unemplyment, lw educatinal attainment as reflected in the SEIFA ranking, the City f Frankstn has nging prblems assciated with alchl and drug abuse as well as vilent crime 2. The relatively high-risk residents referred t abve include thse wh have been unable t secure private rental prperties due t insufficient rental histry, uncertain emplyment status r wh have been therwise disadvantaged by r discriminated against in the mainstream private rental market. We als huse peple wh seek ut accmmdatin in caravan parks specifically as a first preference due the flexibility f ur rental terms. We d nt require residents t cmmit t a fixed 1 http://www.parliament.vic.gv.au/images/stries/lrdcpc/submissins/submissin_80_- _Frankstn_City_Cuncil.pdf 2 http://www.theage.cm.au/victria/frankstn-has-ne-f-the-highest-rates-f-hspital-admissins-fralchl-and-drug-abuse-in-victria-20141118-11pcpd.html Page 1 f 7
term lease and residents are required t give a minimum f nly 7 days ntice when they wish t vacate the caravan park. 38% f ur current residents have lived in the park fr less than ne year. 64% f current residents have lived in the park fr less than 2 years. Our median length f ccupancy fr current residents is 1 year and 3 mnths. Owner-renters f ur 27 Part 4A Sites have chsen t live in ur caravan park fr lifestyle reasns, their average length f ccupancy is just under 12 years and they help t prvide a cmmunity envirnment within the caravan park. Sme cmbinatin f wner-renters and renter-renters is very cmmn in ur industry 3. The Victrian Caravan Parks Assciatin data shws that the vast majrity f caravan parks in Victria maintain sme cmbinatin f Site Tenants, ther residents and hliday-makers bth shrt- and lng-term. Residential Parks are a relatively recent develpment and represent the market s respnse t a shrtage f affrdable, independent-living style husing fr ur ageing Baby Bmer generatin. 1. SECURITY OF TENURE I nte that Page 5 f the Cnsultatin Paper states that security f tenure in caravan parks is a key issue in this review f the Residential Tenancies Act. Caravan parks have lng suffered a stigma with respect t security f tenure that is arguably undeserved. Bth the Australian Husing and Urban Research Institute and the Australian Bureau f Statistics have labelled caravan park residents as marginally hused. Whilst these rganisatins riginally based this characterisatin n the existence f shared tilet and shwer amenities, which are n lnger required in caravan parks such as urs as each cabin has its wn bathrm, this change in the standard f caravan park living is nt reflected in the cntemprary discussin f hmelessness, scial and affrdable husing. In a 2010 submissin t the Family and Cmmunity Develpment Cmmittee Inquiry int the adequacy and future directin f public husing in Victria, Frankstn Cuncil stated the fllwing 4 - Tenants in caravan and cabin parks have n security f tenure, and pr living cnditins can exacerbate the cmplex scial issues that residents ften experience. Legal security f tenure is granted t residents f caravan parks by the Residential Tenancies Act. The Act prtects residents frm frced evictin, harassment and prvides a frmal dispute reslutin prcess thrugh VCAT. The same Residential Tenancies Act prvides tenants f private rental prperties a similar level f security f tenure. The majr difference between the tw categries f renter is the reasns and ntice perid required t end a tenancy. The Act was drafted in this way t reflect the inherent differences between renting privately and renting in managed premises such as a caravan park. 3 Peter Crish, Submissin in respnse t Optins paper: Tenancy Plicy Framewrk fr Residential Parks, Victrian Caravan Parks Assciatin, 2009, p3 4 http://www.parliament.vic.gv.au/images/stries/cmmittees/fcdc/inquiries/56th/ph/submissins/s94_fran kstn_city_cuncil.pdf Page 2 f 7
1.1 Tenant Mbility It is imprtant t differentiate the particular needs f caravan park residents frm thse renting in the brader private rental market. There is a significant prtin f caravan park residents wh chse this frm f tenancy specifically because f the flexibility affrded by the Residential Tenancies Act with respect t caravan parks, which is nt available in ther frms f rental husing. Security f tenure can be less imprtant than flexibility f tenure due t the changing persnal circumstances f a significant prtin f caravan park residents. Examples f such grups include- Wrkers n temprary prjects. We currently huse tw residents wh are perfrming wrk in relatin t the bradband rllut in ur regin. They are unable t cmmute frm their hmes t wrk due t the distance and the duratin f the prject. We have als hused wrkers invlved in the Peninsula Link cnstructin fr mnths at a time. Peple wh have recently separated frm their partners/spuses Marital and dmestic partnership breakdwn causes significant husing difficulties fr many families, as cuples are frced t fund tw husehlds instead f ne. Cmplicating the situatin is the pssibility f recnciliatin. 17% f ur residents wh vacated the park ver the past year cited familial recnciliatin as their reasn fr vacating. In such circumstances, residents prefer the flexibility f caravan park accmmdatin rather than cmmitting t a 6 r 12 mnth, fixed term lease. Additinally, the superir level f security which managed premises such as caravan parks are able t prvide can give assurance t thse peple wh may be escaping vilent relatinships. Caravan parks frequently regulate vehicle access with the use f bm gates, n-site Managers are available during business hurs and wners and managers frequently live n site in caravan parks. Lg Cabin Park ffers a security patrl service n call and an advanced digital surveillance system. Cmbined with the clse-knit cmmunity aspect that parks prvide, caravan park living can feel safer than ther frms f rental husing. Peple making the transitin frm extended hspitalisatin r incarceratin t living in the general cmmunity. Frequently such peple require husing urgently but may nt be prepared t cmmit t living in a specific lcatin until they have secured emplyment. Our caravan park runs at a higher vacancy rate than exists in the brader rental market, largely because f the shrter ntice perids residents are required t give when they chse t vacate. This vacancy rate in additin t the fact that we have staff n site during business hurs means that we can ften rganise husing fr residents within a shrter time frame than in the brader rental market. Scheduled inspectins, busy real estate agents, tenants required t give lnger ntice perids and the cmpetitin frm ther rental applicants can present impediments t the apprval prcess in the brader rental market that d nt apply t caravan park residency applicants. Page 3 f 7
Casually emplyed and self-emplyed peple. Emplyment uncertainty is a key factr in husing affrdability fr many tenants and residents alike. Due t the flexible nature f caravan park accmmdatin, residents whse emplyment status changes suddenly can give the minimum 7 days ntice f their intentin t vacate, withut cncern fr the financial respnsibility invlved in a lng term lease. Fr residents in all f the grups described abve, caravan park residency enables a flexibility f tenure that is mre cmpatible with their mbility needs. One f the majr impediments t entering the private rental market fr these residents is the pssibility f a lease-break situatin and its ptential cnsequences, bth shrt and lng term. In the event that a tenant f a private rental prperty wishes t vacate the prperty at shrt ntice, he, she r they may have t break a fixed term lease. Lease-break csts t the tenant include: rent payable until the expiry f the lease r until a new tenancy begins at that prperty The cst f re-advertising the prperty Re-letting fees (administrative csts t the real estate agent) If a tenant is facing severe financial hardship, they must apply t VCAT, pay an applicatin fee and then prve their hardship t the Tribunal Member in rder t have the fees waived r reduced. An additinal, unseen cst f a lease-break situatin is the ptential effect n the tenants rental histry, which may bstruct their access t private rental accmmdatin in future. By cntrast, a caravan park resident is required t give nly 7 days ntice f their intentin t vacate. There are n lease-break csts because there is n lease. 1.2 Flexibility fr the Caravan Park Owner Althugh security f tenure is an imprtant cnsideratin fr many tenants, there is a significant segment f the rental market wh values the flexibility f tenure that is affrded t residents f caravan parks by the Residential Tenancies Act in its current frm. Likewise, this flexibility is f equal use t caravan park wners as it enables the cntinued prvisin f affrdable and safe accmmdatin. A majr difference between perating a caravan park and a private rental prperty is that we, as caravan park wners, are respnsible fr the safety, well-being and quiet enjyment f all f ur residents in 150 neighburing sites. A private landlrd is mst ften respnsible fr ne tenant r tenants in ne prperty, while an estate agent may be respnsible fr a large rental rll but the managed prperties are rarely in immediate prximity t ne anther and the effects that ne prblem resident may have n his r her neighburs are f little cncern t a real estate agent r private landlrd. In the cntext f a caravan park, the park wner s bligatin t all residents means that it is imprtant fr the Residential Tenancies Act t enable shrter ntice perids nce it has been determined that residents must vacate the premises. This is particularly vital in situatins f vilence and danger n managed premises. Page 4 f 7
Unlike private landlrds wh use residential prperty investments as a means f capital speculatin, incme supplementatin r tax minimisatin, we as caravan parks wners rely n the caravan park business as ur primary surce f incme. We cnsider urselves prfessinal landlrds with 30 years experience sustaining a prfitable business mdel. Changes t ntice perids fr terminatin f residency will have a direct and significant cnsequence t the prfitability f ur business. Of the residents wh have vacated the caravan park within the past year, 13 sites were vacated due t evictin fr nn-payment f rent. The current ntice perid fr residency terminatin due t nn-payment f rent is 7 days in caravan parks. Shuld that ntice perid have been 14 days, fr example, ur business wuld have suffered additinal lsses averaging $230 per site, r just under $3,000 in ttal. It is technically pssible t claim this additinal amunt frm the resident s Bnd, hwever with the waiting times fr VCAT hearings f 2 4 weeks, the delay between the issuing f an rder f pssessin and the executin f a warrant f pssessin by Victria Plice f up t 2 weeks, the ttal amunt f unpaid rent wuld already exceed the Bnd amunt (4 weeks rent) by the time the legal prcess f evicting a resident in arrears is cmpleted. Further lsses wing t cleaning, damage t cabins and unpaid pwer and gas lsses wuld als be brne by the caravan park wner where the cst exceeds the Bnd amunt. The unseen cst f increasing this ntice perid, hwever, is the inadvertent effect n neighburing residents. Residents wh are unable t pay their rent ften fail t pay their pwer csts. In the past twelve mnths we have had tw separate incidents f such residents effectively stealing electricity frm neighburing sites by breaking the lcks n neighburing cabin s pwerheads and cnnecting utdr extensin leads t their wn cabin. On ne particularly memrable ccasin in years past, a skilled resident stle natural gas by redirecting pipewrk supplying his and neighburing cabins. The lgical cnsequence f increasing ntice perids fr park wner-induced terminatin f residency is t increase weekly rental amunts. This wuld threaten the affrdability f caravan park accmmdatin and ultimately undermine the basis n which ur business mdel is able t cmpete in the residential prperty market. In perating ur business, we find that the current prvisins f the Residential Tenancies Act are sufficient with respect t minimum ntice perids fr terminating a residency. Whilst we rarely evict residents fr reasns unrelated t nn-payment f rent, it has nt been ur experience that residents encunter undue difficulty in btaining accmmdatin elsewhere within the ntice perid prvided fr under the Act. 2. Clsure f Caravan Parks Within the Frankstn area, we have seen sme caravan park clsures in recent years as bayside prperties with main rad frntage are acquired fr higher density residential develpment. Additinally, we have bserved ne lcal caravan park transitin frm a traditinal hybrid style caravan park int a Residential Village, ffering exclusively Part 4A sites. These residents are required t pay between $200,000 and $400,000 t acquire a mbile hme and then pay weekly site fees f sme $185 per week under a lng term lease agreement. Owner-renter residents in ur caravan park have nt paid such high prices t acquire their cabins and ur weekly site fee is Page 5 f 7
apprximately $50 per week lwer than in the newer style residential / retirement parks. In the event that we were t redevelp ur business in this style, the vast majrity f ur residents wuld be frced t find alternative accmmdatin as they may be unable t raise the funds required t purchase a mbile hme at current marking pricing, and t cver the increase in weekly Site Fees. Residents in residential / retirement style parks pay a higher price fr greater security f tenure, which is clearly a pririty fr these residents. Residents in mre traditinal style caravan parks d nt necessarily view a lng term lease as a benefit but in a lt f cases, as a restrictin f their mbility and are likely t be either unwilling r unable t pay fr this prduct f little perceived value. 3. Vulnerable and Disadvantaged Residents Due t the affrdable nature f caravan park accmmdatin, many f ur residents belng t vulnerable and disadvantaged grups. Specifically, f ur residents whse husehlds are cmprised f a cuple with children, 40% are same-sex cuple headed husehlds. Additinally, we have hused many transgender residents ver the past 10 years and cnsequently have becme familiar with the specific issues faced by transgender peple as well as thse in the brader LGBTIQ cmmunity, including difficulty securing accmmdatin and emplyment as a result f discriminatin by private landlrds and real estate agents. Additinally, LGBTIQ residents have at times reprted abuse and harassment frm neighburing residents, smething which private landlrds and real estate agents are pwerless t prevent. Caravan park wners are empwered t act upn such cmplaints by way f enfrcing ur caravan park Rules thus ensuring ur residents peaceful and quiet enjyment f their sites, a right t which all residents are entitled under the Residential Tenancies Act. As prfessinal landlrds with decades f hands-n experience prviding affrdable accmmdatin in a scially and ecnmically disadvantaged regin, we take seriusly ur respnsibilities under equal pprtunity legislatin and als the need t preserve the dignity f all residents. We d nt feel that this cnflicts with the aim f running a prfitable business n an nging basis. We feel that ur psitin and apprach is in stark cntrast with that f private landlrds, many f whm have limited experience, educatin r training in the prvisin f accmmdatin. Further, althugh real estate agents underg a minimum level f frmal training, which includes a briefing n equal pprtunity bligatins, they are ultimately guided by the directin f their landlrd clients. The lss r reductin f caravan parks frm the accmmdatin sectr wuld cause further disadvantage t already disadvantaged grups as ptins fr independent, safe, secure and affrdable husing wuld be restricted. This wuld in turn put further pressure n public husing. Page 6 f 7
4. Reslving Disputes in Caravan Parks During her presentatin t the Victrian Caravan Parks Assciatin Annual Cnference in August 2013, VCAT Member Jacquellyn Keffrd reprted that 400 applicatins relating t caravan park wners and residents had been ldged with VCAT ver a three year perid 5. That amunts t less than ne quarter f ne percent f all Residential Tenancies disputes heard at VCAT per year. Of these 400 applicatins, Keffrd stated that sme 20% were brught by the resident and 80% by the caravan park wner. The data indicates the current methd f dispute reslutin thrugh VCAT is nt deficient. Keffrd advised park wners that the miniscule number f applicatins made by residents is a cnsequence f gd business practice and well written caravan park rules. 5. Cnclusin There are substantial differences in the mtivatins and circumstances f caravan park residents as distinct frm tenants in the brader private rental market. The Residential Tenancies Act in its present frm adequately accunts fr these differences and prvides a slid legal framewrk fr an ecnmically sustainable industry that prvides relatively high-risk residents with safe, secure and affrdable accmmdatin f a satisfactry standard. 5 Keffrd, J. Prceedings f the Annual Cnference f the Victrian Caravan Parks Assciatin, Melburne, 2013 Page 7 f 7