For Your Information
Case clarifies factors QCAT will consider when manufactured home owners challenge market rent review site rent increases.
In the recent case of Priddy and Ors v M and T Entriken Pty Ltd and Anor [2020] QCAT 107 a group of home owners in a manufactured home park successfully challenged a market rent review increase. It may be of interest to owners of other manufactured homes considering challenging market rent review increases.
A blanket increased rent of $219.45 per week represented a significant increase of $18/$25 per week for some longer-term home owners, and a much smaller increase for those who had moved into the park more recently. The home owners argued that the blanket increase was not fair and equitable given the discrepancy in impact between long term and newer home owners.
A group of 58 homeowners successfully challenged the increase, however QCAT only decreased the rent increase by $1.95 per week.
The case provides a helpful walk through of the factors that QCAT will consider when home owners are challenging a market rent review.
Some key points of interest:
- The task of QCAT is not to determine the market rent, but rather whether the proposed increase in site rent is excessive.
- In this case, QCAT relied heavily on the park’s valuation report, which was accepted as expert evidence by QCAT in relation to both the site rent increase and the state of maintenance and repair at the park.
- It was difficult for the home owners to challenge the rent increase amount without their own expert evidence. The cost of obtaining a valuer’s report may be prohibitively expensive for home owners but would have enhanced their evidence.
- QCAT also found it difficult to give weight to other arguments made by the home owners because no supporting evidence was presented.
- Anecdotal evidence presented by home owners will carry much less weight than evidence given by a valuer.
- Although considerable weight was placed on the valuer’s report, QCAT applies a methodology different to the valuer when considering the proposed increase. This is because QCAT must consider additional factors as set out in section 70(5)of the Manufactured Homes (Residential Parks) Act 2003 (Qld), relating to what is “fair and equitable” in the circumstances.
- QCAT gave consideration to the comparison between pension entitlements and site rent as relevant to what is a fair and equitable site rent.
- QCAT also considered it relevant to have regard to the site rent people moving into the park were prepared to pay as a fair (but not conclusive) indication of market value.
- Ultimately, QCAT ordered that the increase be limited to $271.50 per week, as recommended by the valuer, and rejected the park owner’s argument that the increase should be limited to $219.45. This was applicable to all sites, regardless of size or existing site rents.
The case can be located online here:
