An important decision for holiday parks and retirement communities

Article by Nadia Maynard

In a recent decision relating to Part 4A dwellings, the Victorian Civil and Administrative Tribunal (Tribunal) held that a periodic site agreement between a site tenant and a site owner existed, despite a lack of relevant documentation.  

This application was brought by the applicant, the legal representative of a deceased estate, seeking to sell the inherited Part 4A dwelling (mobile home) in accordance with the Residential Tenancies Act 1997 (Vic) (RTA).

The respondent, the site owner, refused the sale of the Part 4A dwelling, on the basis that a site agreement does not exist between the applicant and respondent therefore it is not capable of assignment.

Background

On 15 May 1991, the Part 4A dwelling was bought by the applicant’s grandmother.

The applicant’s grandmother lived in the Part 4A dwelling, and in around August 2011, the applicant’s father moved into the dwelling to take care of his mother as her health began to deteriorate.

The applicant’s grandmother died on 23 June 2012, and the applicant’s father continued to live at the Part 4A dwelling until his death on 5 October 2020 and paid rent to the respondent.

Following the death of the applicant’s father, the applicant has continued to pay rent to the respondent, despite the Part 4A dwelling being unoccupied.

The applicant alleged that a 99-year lease exists, of which 69 years is remaining. The applicant sought to assign the remainder of the 99-year lease and sell the Part 4A dwelling, on behalf of the estate.

The respondent denied that a 99-year lease exists between the site owner and the applicant’s grandmother. The respondent further alleged that any site agreement with the applicant’s grandmother expired upon her death or was terminated by the applicant’s father’s occupation of the site as a resident.

The respondent further alleged that if a site agreement does exist between the applicant and the site owner, it is not capable of being assigned as there are “serious defects”. The applicant denies that the Part 4A dwelling contains “serious defects”. This issue will be explored by the Tribunal in a further hearing of this matter.

Does a site agreement exist, and is it capable of assignment?

99-year lease

The Tribunal made a finding that there is insufficient evidence that a 99-year lease exists as the only evidence of a 99-year lease was that the applicant’s grandmother frequently and repeatedly referred to the 99-year lease.

The Tribunal also relied on the terms of the Deed of Sale which stipulated that the sum of $38,000 was paid for the Part 4A dwelling only, and there were no grants of transfer or assignment of any contractual rights currently held or enforceable by the vendor. 

Site Agreement Exists

The Tribunal found that a site agreement does exist, and therefore the respondent’s argument that the site agreement expired upon the death of the applicant’s grandmother and/or the death of the legal representative’s father, fails.

The Tribunal’s reasoning in relation to its finding is explained below.

Law in relation to Site Agreements

At the time the applicant’s grandmother took possession of the Part 4A dwelling the applicable legislation was the Caravan Parks and Movable Dwellings Act 1988 (Vic). The RTA came into effect on 23 December 1997.

From 1 September 2011, Part 4A of the RTA came into effect and regulated site agreements.

Section 206E(E) of the RTA states that if a site agreement is not in writing it does not make the site agreement illegal, invalid or unenforceable, or affect the application of the RTA to the site agreement.

Section 3 of the RTA provides a definition for site agreements which is “an agreement under which a person lets land as a Part 4A site for the purposes of the occupation of a Part 4A dwelling on that land by the Part 4A dwelling owner as a residence”.

Impact on Site Agreement as a result of the Death of the Applicant’s Grandmother and Father

The RTA does not contain a provision which explicitly states that a site agreement is terminated upon the death of a sole tenant. In the circumstances, the Tribunal referred to the general law in relation to the passing of the deceased’s interest in contracts.

Having referred to the general law, the Tribunal held that upon the death of the applicant’s grandmother, the site agreement formed part of her personal estate and therefore must vest in her executor or administrator.

However, the respondent argued that a site agreement could not operate between the applicant as the personal legal representative, due to references of “persons” within the RTA, and that the provisions of the RTA were drafted to relate to rights and obligations that relate to personal site tenants only. The Tribunal did not accept this argument and held that if the RTA had intended to preclude executors and administrators, it would have included provisions in the RTA specifically stating “site tenants, heirs, executors, administrators and assigns”.

In the alternative, the respondent also submitted that the applicant’s grandmother’s agreement is terminated by the applicant’s father’s residence in the Part 4A dwelling. The Tribunal rejected this argument.

The Tribunal held that no provision in the RTA exists which stipulates that a site agreement is terminated by reason of a site-tenant co-habiting with another individual. The Tribunal also considered that section 317F of the RTA which relates to site tenants sub-letting the premises does not apply as the applicant’s grandmother did not sub-let the Part 4A site to the applicant’s father.

Has Site Agreement terminated by reason of the RTA Provisions in relation to Termination of Site Agreements?

The respondent submitted that it relied on section 207A, 207B and 207D of the RTA, which relate to the termination of a site agreement.

The Tribunal rejected the respondent’s submissions in relation to the termination of the site agreements and found as follows:

1. Section 207A states that a site agreement may be terminated by the agreement of the site owner and the site tenant. The respondent submits that it was a verbal term of the site agreements that the site tenant’s rights to live in the Part 4A dwelling under the agreement would expire when they left the site. The Tribunal rejected this argument as it was new evidence that was not relied upon at the hearing by the respondent. Further, the Tribunal could not accept this as evidence as it was clear that the respondent entered into a number of verbal agreements which cannot be proved.

• Section 207B states that a site agreement terminates if the site tenant vacates the Part 4A Site. The respondent submits that the applicant’s grandmother vacated the Part 4A Site as a result of her death. The Tribunal rejected this argument. The Tribunal considered that the objective of section 207B is to obtain the consent of the site owner prior to vacating the Part 4A dwelling. There is no evidence of the applicant’s grandmother seeking the respondent’s consent prior to her passing. Furthermore, the respondent still accepts monthly rent from the applicant, therefore, it is unreasonable that the respondent seeks to rely on section 207B.

• Section 207D states that a site agreement terminates if the site tenant abandons the Part 4A Site. The Tribunal did not accept this submission as the applicant’s grandmother had passed away, and therefore did not abandon the Part 4A Site.  

Conclusion

In light of the Tribunal finding that the site agreement between the applicant and the respondent was never terminated, the Tribunal concluded that the site agreement is a periodic one that is capable of assignment.

As discussed earlier in this article, the respondent is of the view that the Part 4A dwelling contains “serious defects” and therefore it is not capable of assignment. The matter will soon be set for hearing for the Tribunal to determine whether the respondent has unreasonably withheld consent to the assignment of the site agreement in relation to the “serious defects”.

The decision is available here: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2022/448.html?context=1;query=donna%20moore;mask_path=au/cases/vic/VCAT