Victorian Civil and Administrative Tribunal|2004-08-30

Lifestyle Communities Pty Ltd (exemption) [2004] VCAT 1821 (30 August 2004)

Anti Discrimination - exemption - company wishing to establish communities for those over 55 - nature of right and liabilities of owner of residences - applicable legislation -whether exemption is justified - exemption granted subject to conditions - Equal Opportunity Act 1995 s83; Residential Tenancy Act 1997 parts 2, 4, 6 and ;

The Victorian Civil and Administrative Tribunal, has considered an application pursuant to Section 83 of the Equal Opportunity Act 1995 by Lifestyle Communities Pty Ltd for exemption from Sections 42, 47, 49, 50, 100 and 195 of that Act. The application for exemption is to enable the applicant to engage in the specified conduct. In this Exemption "specified conduct" means the establishment and operation of residential communities for people over 55 years of age including, but not limited to, the sale of mobile homes, the provisions of residence sites, the provision of facilities and services to those communities and other related matters and advertising concerning those communities.

UPON READING the material submitted in support of the application and upon hearing submissions from Mr Craig Dowling, Counsel and for the Reasons for Decision given by the Tribunal on 3 August 2004, the Tribunal is satisfied that it is appropriate to grant an exemption from Sections 42, 47, 49, 50, 100 and 195 of the Act to engage in the specified conduct.

The Tribunal hereby grants an exemption to the applicant from the operation of Sections 42, 47, 49, 50, 100 and 195 of the Equal Opportunity Act 1995 to enable the applicant to engage in the specified conduct. The exemption is subject to the conditions listed in the schedule.

This exemption is to remain in force from the day on which notice of the exemption is published in the Government Gazette until 11 August 2007.

This schedule sets out minimum requirements to be contained in any agreement entered into between the applicant and the resident of a site in a community established by the Applicant. The terms of the agreement are not limited to the requirements set out in this schedule. The terms set out in any site agreement need not be in the exact form of the requirements in this schedule but must be to the same effect.

a) The agreement must provide for the payment of the site fee by the resident to the applicant and must describe the purposes for which amounts received as site fees are to be used. If the site fee is to include an amount in respect of rates or taxes concerning the site, the amount included must comply with sections 162 and 163 of the of the Residential Tenancies Act 1997 ("RTA").

b) The agreement must state that it is an agreement for the purposes of section 144 of the RTA. The agreement must make it clear that the community to which it relates is a caravan park within the meaning of the RTA, and that the provisions of the RTA relating to caravan parks apply.

c) The resident's residency right lasts for a term of 45 years from the date when the resident locates his or her mobile home on the site. The resident has one option of renewal for a further term of 45 years.

d) If the resident sells or disposes of his or her mobile home, the applicant may refuse consent to the transfer of the residency right in the site if the transferee is not aged over 55. If the applicant consents to the transfer of a residency right in a site, the applicant will enter into a new site agreement with the transferee. For the purpose of paragraph C the term of the residency right begins on the date of the transfer.

e) If a resident dies, the person to whom the resident's mobile home passes under the laws relating to estates is entitled to the transfer of the residency right in the site irrespective of that persons age. The applicant will enter into a new site agreement with that person. For the purposes of paragraph C, the residency right under the new agreement lasts for a term of not less than 20 years and specified in the agreement. The company will permit that person, if aged 55 or under, to nominate a person over 55 to occupy the site on terms and conditions agreed between the applicant and the nominator.

f) The applicant will permit the transfer of a residency right in a site to a person who is not over the age of 55 in other exceptional circumstances.

g) The applicant will permit a person to occupy a site instead of the resident, on a short term or temporary basis. The circumstances in which this permission may be given include but are not limited to absences of the resident on extended holiday or because of ill health or in any other exceptional circumstances. The temporary or short term occupation will be for a term not exceeding 12 months, but the term may be renewed from time to time in the applicants discretion.

h) The applicant will not require from the resident more than 1 bond in respect of any one continuous period of occupation of a site.

i) The applicant will not make an additional charge for occupation of a site by any visitor of the resident unless the visitor remains there for more than 30 days.

j) The resident will use the site for his or her main or only place of residence.

k) Subject to payment of the site fees, the resident has the right to use the communal facilities and services in the community.

l) The applicant and the resident must obey any rules for the community made under section 185 of the RTA as amended and in force for the time being.

m) The resident will insure and keep insured the mobile home and its contents and take out and maintain public liability insurance over the site occupied by the resident.

(1) The decision is that the exemption sought will be granted. The exemption is subject to a number of conditions which will be contained in a schedule to the exemption.

(2) I would anticipate that it would be published in the Government Gazette which will be published Thursday of next week. The exemption is granted for three years, which is the longest period for which the Tribunal can grant exemptions. I now give my reasons.

(3) This is an exemption sought by Lifestyle Pty Ltd which I call "the company", to allow it to provide, make provision in respect of the sale of residency and accommodation of units and related services for communities which it proposes to establish for those over 55 years of age. The exemption by implication would require some provision in respect of advertisement for these communities. I have said that the exemption is granted subject to a number of conditions. The conditions are designed to reflect the minimum standards which the company has told me that it intends to meet in relation to those communities.

(4) By way of background I should say that in 2003 the company applied to this Tribunal for a broadly similar exemption. On 8 December 2003 I dismissed the application, but gave to the company liberty to apply to make a fresh application, if that application included new material addressing various issues which I raised in my decision. Broadly, those issues concerned the giving of a more concrete and detailed description of the company's scheme for the establishment and operation of its communities; more detail about the terms of what the company calls the site lease which it proposes to enter into with each community resident; more details about whether Part 14 of the Residential Tenancies Act 1997, the ("RTA") would apply to the mobile homes to be erected on sites in each of the communities, and more information about the scheme for residents' involvement in the operation of the community; and finally, more detail about the application to the residency arrangements in relation to the community of the Retirement Villages Act 1986, ("RVA") and Parts 2 and 4 of the RTA.

(5) The reasons for decision which I gave on 8 December 2003 set out these matters in greater detail. They also set out the principles which the Tribunal applies when considering applications of this kind, the relevant provisions of the Equal Opportunity Act 1995 ("EOA")and my reasons for dismissing the application. It is unnecessary for me to repeat here what I then said. But to put the present decision into context, it is necessary for me to make some brief points.

(6) First, in general terms the company proposes to establish communities for those over 55. Each community will consist of a group of mobile homes and associated facilities for use by the community as a whole. Those community facilities will include recreational facilities, facilities such as libraries, sporting facilities such as a swimming pool or bowling green, social facilities such as a communal hall and cinema; and services such as hairdressing and health professional services.

(7) Each resident will live in a mobile home which he or she has purchased and owns. That home will be located on land occupied by the resident and under an occupancy agreement called by the company, a site lease. I prefer in my reasons to call it a site agreement.

(8) The purchase price of the mobile home will be pitched at a far lesser level than what one would currently pay on average for a house of brick veneer or timber. Communal areas would be designed so as to be accessible to those who have mobility assistance, such as wheelchairs, walking frames or walking sticks. But the community is not intended to be a nursing home or health care hostel. The community will be gated and will include visitor surveillance measures and other security measures for the residents. The community aims to provide affordable, safe, independent and easily accessible homes for those who cannot afford to enter a retirement village, or who wish to move to a smaller and more secure form of accommodation which is more easily maintainable, or for those who wish to move from an isolated situation to one in which it is easier to access communal facilities and activities, or for those who wish to move to more affordable accommodation and use the surplus from the sale of their homes for such purposes as investment, travel or other lifestyle choices.

(9) Second, in my earlier reasons for decision I pointed out that this proposal represents a choice being given to those who are over 55, which is currently not available to them. I set out in my earlier reasons for decision the relevant provisions of the Equal Opportunity Act which permit the Tribunal to grant exemptions, and also some of the express exception provisions relating to age and other matters. Some of those express exception provisions in general terms, permit discrimination where this is necessary to eliminate or reduce disadvantage suffered by those with a particular attribute.

(10) Third, in my reasons for decision I pointed out that this proposal involved possible age discrimination and that no express exception provision in the Equal Opportunity Act clearly covered the proposal. I said that apart from one consideration, the proposal would confer a benefit on those at present under a disadvantage and would be of particular benefit to those who are frail or isolated or in difficult financial circumstances.

(11) The one consideration which led me to dismiss the application was that the lack of certainty in the original proposal and the lack of certainty as to what legislation applied to it, outweighed its potential benefits, so that it could not be said that there was an interest which made it appropriate to grant an exemption at that time.

(12) The company has now made a new application addressing all the matters raised in my earlier reasons for decision. The proposal is now in an altered and more concrete form and it has now been made clear what legislation will apply to it. I briefly explain some of the changes and the application of various pieces of legislation to the new proposal. My findings are based on the material before me which includes affidavits from Mr Perlov, a director of the company, and submissions made by counsel on the company's behalf.

(13) It is intended that the community will be for those over 55 only, rather than over 50 as was the original proposal. There will be no ingoing or up-front contribution for admission to the community. Before a person can live in the community he or she must purchase a mobile home from the company, and pay the purchase price of that home and agree to pay a weekly site fee. The weekly site fee is payment or consideration for the right to locate the mobile home on land in the community, and for the use of communal services and facilities in the community. It also includes an amount to reflect, it is said, rates and taxes, presumably in relation to the site, and also reflects certain moneys which will be payable for maintenance carried out for the community as a whole by the company. Maintenance will include maintenance of the front gardens and maintenance of communal facilities.

(14) In the material before me there is also included the material originally presented to me on the earlier application.

(15) It is my understanding from all of this material that the company intends the purchase price of each of the mobile homes to include the cost of the materials, and presumably of locating the home on land in the community, and also what one would hope would be a reasonable profit margin.

(16) On the basis of all the material I am satisfied that the RVA, Retirement Villages Act, does not apply to the communities which the company proposes to establish. Under s.3 of the RVA a retirement village is defined among other things, as a community the majority of which are retired persons who are provided with accommodation and services, and at least one of whom, before on becoming a resident of the community, pays or is required to pay an ingoing contribution. Among other things "retired person" is defined by the Act to mean a person who has reached the age of 55. "Ingoing contribution" is defined as the payment made-

"(a) by way of donation, because of an understanding between a person and an owner or manager to the effect that on the making of the donation the person will be entitled to become a resident of the village; or

(b) in consideration of acquiring the shares in a company, if those shares confer on the holder the right to become a resident of a village; or

whether paid by or on behalf of the person who wishes to become a resident, and whether in a lump sum or by instalments, but does not include rent".

(17) Although I am satisfied that the majority of the residents in each of the company's communities will be retired persons within the meaning of the RVA, I am not satisfied that these residents will be paying or required to pay an ingoing contribution within the meaning of that Act. Under the company's proposal a resident pays the purchase price for homes which they will then own. The resident also will pay a weekly site fee. Part of that fee is for the maintenance of communal facilities. Another part of that fee is it seems to me, not so much consideration for the right to become a resident of the community, but rather a periodic payment for the right to continue to locate the resident's own mobile home on land in the community. In this sense the payment is more akin to rent than consideration for the right to become a resident.

(18) Each resident of one of the company's communities will enter into an agreement, which I have called a site agreement, allowing the resident to locate their mobile home on a site in the community. I am satisfied that the proposed agreement will relate to land only. It is not an agreement which relates to the letting of a building. The mobile home to be located on the site in the community is owned not by the company, but by the potential resident.

(19) The effect of the definition of "Tenancy agreement" in the RTA is that, a tenancy agreement is an agreement under which a person "lets premises as a residence" (see s.3(1)).

(20) I agree with the submissions of the company that this proposal does not involve the letting by the company of premises to each resident of a community. Although "premises" is not defined in the RTA, it is clear from Part 2 of that Act which relates to tenancy agreements, that tenancy agreements, agreements for the letting of premises, are agreements that relate to the letting of a building or part of a building or to a building together with land. They are not agreements that relate to the letting or to the occupation of land only. This is clear from provisions in the parts such as those relating to locks and the repair of damage. Accordingly, I agree with the company's submission that Part 2 of the RTA does not apply to this proposal.

(21) I agree with the company's submission that Part 4 of the RTA which is headed, "Caravan parks and movable dwellings, residency rights and duties" applies to this proposal. Section 3(1) of the RTA defines movable dwellings. They mean a dwelling that is designed to be movable but does not include a dwelling that cannot be situated on and removed from a place within 24 hours.

(22) On the material before me, the mobile homes which the company is dealing with in its proposal are manufactured in two halves. They are supported on a steel chassis and the two halves are then joined in the middle. For relocation the two halves can be easily split and then separately transported. The home can be situated and moved from a location within 24 hours. It is therefore a movable dwelling for the purposes of the RTA.

(23) Under s.3(1) of the RTA, "caravan", among other things, includes a movable dwelling. "Caravan park" is also defined in s.3(1). It means-

"an area of land on which movable dwellings are situated".

For occupation on payment of consideration, whether or not immovable dwellings are also situated there.

(24) In my view this definition does not only cover the case where movable dwellings are owned by the operator of the caravan park and are hired for occupation by visitors who come there. It also covers the case where a landowner allows other people to locate on his or her land, movable dwellings which those other people own. This is in fact what the company proposes to do.

(25) Accordingly, I agree with the company's submission that the area of land on which residents can under its proposal, locate their movable dwellings, is a caravan park under the RTA. It follows that the rights and duties in respect of that caravan park are regulated by Part 4 of the RTA and the other provisions applying to caravan parks. Examples of provisions under Part 4 are provisions relating to the creation of a residency right, certain disclosure provisions, the regulation of bonds and rents and hiring charges, and the relevant duties of caravan park owners and residents concerning such things as quiet enjoyment and repairs.

(26) Section 143 of the RTA gives a resident of a caravan park such as the one to which this proposal relates, a right, subject to the Act, to reside on the site which the resident occupies and to occupy a caravan on that site. Section 144 permits the resident and caravan park owner to enter into an agreement specifying the terms and conditions of the residents' use and enjoyment of the caravan park and of the occupancy of the site by the caravan. That agreement is invalid to the extent that it is inconsistent with or excludes or modifies or interferes with the rights or the exercise of rights conferred by the Act.

(27) The agreement which the company proposes to enter into with each resident of each of its communities, is as I have said, called in my reasons, a site agreement, although it is called a site lease by the applicant. The agreement is, in my view, an agreement to which s.144 of the RTA applies.

(28) The proposed agreement will contain a number of protections for residents. The residents will be given all the benefits of the provisions of Part 4. Facets or aspects of the proposed agreement to which the company referred were these.

(29) (a) the residency right will be for a term of 45 years from the date the resident moves into the community. I take this to mean the date when the resident moves his or her mobile home onto a site in the community. Each resident will have one option to renew the agreement for a further 45 year term.

(b) if a resident sells or disposes of his or her mobile home, the resident may, with the consent of the company, transfer the residency right in relation to the site to the person who acquires the home. The agreement will provide that the consent cannot be unreasonably withheld. The agreement will permit the company to refuse consent where the person who is to occupy the mobile home will not be aged over 55 years. The company will enter into a new agreement with the transferee for a further term of 45 years, and presumably, that agreement will contain another 45 year option.

(c) if a resident dies, the person to whom the resident's mobile home passes either on intestacy or under a deceased's will, is entitled to a transfer of the residency right which that person had, irrespective of the age of that beneficiary. The company will enter into a new agreement with that person for a period of not less than 20 years. The company will permit that person if under 55, to nominate a person who is over 55 to occupy the site on terms and conditions agreed between the company and the nominator. The company will permit transfer of the residency right to persons who are not over 55 in other exceptional circumstances.

(d) the company will allow another person to occupy a site in substitution for a permanent occupier on a short term or temporary basis. This contemplates situations where the permanent occupier has an extended period of absence, either having taken holidays or because of ill health, or for some other exceptional reason. The temporary or short term occupancy will be for a period of no more than 12 months, but can at the discretion of the company, be extended.

(e) the resident will have a right to terminate occupancy of the site without giving reason, on 90 day's written notice to the company. On vacating the site the resident must remove the mobile home.

(f) the company will not require more than one bond from a resident in respect of any one continuous period of occupation.

(g) the company will not charge for occupation of the site by a visitor of the resident, unless the visitor remains there for more than 30 days.

(h) the company will only be able to terminate the resident's agreement for breach of the agreement or for the other reasons set out in Part 4. Those reasons include such matters as damage caused by the resident, illegal use of the site or failure to pay charges for which the resident is liable. Where the resident's right is terminated for breach of the site agreement, a notice of the breach first be required to be given. A remedy period must be allowed and then finally there is the option of giving a notice to vacate.

(i) the resident will use the site as his or her permanent place of residence and will only use the site for residential purposes.

(j) the resident has the right, subject to paying a weekly site fee, to use the communal services and facilities available in the community.

(k) the company and the resident must obey the community rules. It is proposed that these rules will cover such matters as pets, visits, rubbish collection and other services, and the use of communal facilities. Sections 182, 185 and 186 of the RTA make provision concerning the making and amendment of rules and the disclosure.

(l) the resident will insure and keep insured the mobile home and its contents and will take out and maintain public liability insurance in respect of the site which he or she occupies.

(30) I have said earlier that since the mobile homes in each of these proposed communities are movable dwellings within the meaning of the RTA, and the community is a caravan park within the meaning of that Act, part 14 of that Act will regulate both and the regulations made under that Part will govern the standard to which mobile hands must be manufactured.

(31) The company proposes to employ a community manager for each of the communities which it will establish. That manager will be based on site and will oversee the operation of the communal facilities and the administration of the community. The manager's salary will be funded through the site fees.

(32) Each community will have a residents' committee whose role it will be to provide a contact point between the company, the community manager and the residents of the community, and to liaise between them concerning issues which are raised. Matters that the committee might consider include issues relating to communal services or facilities, new capital works, health and safety matters and the organisation of social functions for residents. The committee manager would be a member of the committee. The committee's procedure, membership and other functions would be determined by the committee.

(33) The company has established focus groups in relation to its proposed first community in the Shire of Melton to see whether there was a demand for a community of this type in that Shire. The feedback which the company received from those groups indicates that there is such a demand.

(34) In the course of the process which ultimately led to the granting of a planning permit for the establishment of this first community, the company engaged as a consultant Maxine Cooper & Associates. That consultant's report is in the material before me. It concludes that there are barriers which restrict housing choice by older people living in Melbourne's outer western suburbs. The barriers relate to housing affordability and the suitability of design and setting to cater for the needs of people as they gradually age. The report concluded that this proposal would help to reduce these barriers and would be of particular benefit to older people currently living in isolated situations.

(35) The company says that it will ensure that copies of all relevant documentation are given to those who propose to become residents before they sign any agreements, and will also encourage them to get independent legal advice before they sign.

(35) Should the exemption be granted? In my view it should. There is no clearly applicable express exception provision in the Equal Opportunity Act, but there are a number of express exceptions which indicate an underlying objective to address or reduce disadvantage suffered by those with a particular attribute. Here there is an interest justifying the granting of the exemption. The proposal will provide affordable, suitable, secure accommodation for older people and will give them a housing choice which they currently lack.

(36) I have included a schedule of conditions to ensure that the proposal when implemented, will reflect the provisions and protections currently set out in the material before me. It is in part because of these provisions and protections that I consider it appropriate to grant the exemption. I make some comments concerning the conditions.

(37) First, the conditions do not reflect those provisions of the site agreement that are the same or to the same effect as provisions of the RTA. For example, Part 5 of the RTA deals with breach of duty notices and sets out what such notices must contain. Section 308 allows a caravan park owner to give a resident notice to vacate a site where a breach of duty notice has been issued and not complied with. I think consideration should be given as to whether rather than repeating these provisions in the RTA in the agreement, a copy of the conditions would suffice, and perhaps also a summary of them in plain English.

(38) Second, there are some circumstances where in my view the terms of the proposed site agreement are inconsistent with rights given by Part 4, or Division 3 of Part 6 of the RTA. I give two examples.

(39) The first relates to the site fee. According to the company's material part of that fee will be relating to rates and taxes. This may be inconsistent with ss.162 and 163 of the RTA. The general effect of these sections is this. The resident is liable for charges for the use of services such as water, gas, electricity, sewerage and drainage where these are separately metered. But the caravan park owner is liable for all charges for services which are not separately metered and also for charges for water, sewerage and drainage which, though separately metered are not based on use.

(40) Second, s.296 permits a resident to give the caravan park owner at least seven day's notice of intention to vacate. It would then seem to me to be a choice of the resident's as to whether or not the resident gives a longer period of notice. But the site agreement provides for a 90 day period of notice. The section does not in my view, make a similar provision. An agreement cannot require the resident to give the owner more than 7 days notice of intention to vacate, and so make it a breach of the agreement of by the tenant to give the 7 day notice of intention to vacate provided for s.296.

(41) The section is to be contrasted with s.314 which clearly does permit a longer period of notice to be fixed by agreement. That section relates to the giving by a caravan park owner of notice to vacate to a resident, where that notice does not specify any reason for the notice being given.

(42) In my view to set by agreement, a longer period of notice for the purposes of s.296 effectively prevents the resident from giving the shorter period of notice contemplated by the section. This is a situation where the agreement is inconsistent with that section.

(44) First, the conditions attached to the exemption make it clear that the final form of the site agreement need not use any particular form of words, but need only make provision which is substantially similar to or to the effect of the conditions which I have set out in the schedule.

(45) Second, if the company wishes to change any of these conditions, it must again apply to the Tribunal.

(46) Third, I would suggest that the company change the name site lease for its proposed agreement between the resident and the company, to site agreement. This is the term I have used in my reasons for decision. This term seems to me to reflect more appropriately, the nature of the agreement itself.

(47) Finally, I emphasis again that the exemption is granted for three years. It does not operate until it is published in the Government Gazette.

Opportunity Act 1995

Lifestyle Communities Pty Ltd (exemption) [2004] VCAT 1821 (30 August 2004)

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Lifestyle Communities Pty Ltd (exemption) [2004] VCAT 1821 (30 August 2004)

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