[2025] VCAT 726
General information, not legal advice.
Victorian Civil and Administrative Tribunal
2025-09-04
Original judgment source is linked above.
REVIEWING RENT INCREASES AT PART 4A SITES UNDER THE RTA
(a) the rent payable for a similar Part 4A site in the Part 4A park;
(b) the rent payable for a similar Part 4A site in a similar Part 4A park in a similar location;
(c) the state of repair and general condition of the Part 4A site and the Part 4A park;
(d) any variation in the cost of providing facilities or services that the site owner provides;
(e) any changes in the rent and the condition of the Part 4A site or facilities in the Part 4A park since the site tenant first occupied the Part 4A site and since the last rent increase;
(f) the number of rent increases (if any) in the preceding 24 months, the amount of each rent increase in that period and the timing of those increases;
(g) any improvements made to the Part 4A site which should not result in an increase because they were made by the site tenant; and
(h) the terms of the existing or proposed site agreement (if any).
(1) After receiving a report from the Director under section 206W, the site tenant may apply to the Tribunal for an order declaring the proposed rent excessive.
(2) An application under subsection (1) must be made within 30 days after the site tenant receives the Director's report.
(a) the 16 December report; and
(b) the 3 March report.
[CAV] provided a report dated 16 December 2024. The Applicants therefore needed to apply to the Tribunal by 15 January 2025. On the Applicants' own evidence Housing of the Aged Action Group did not request further information from the Director until 4 February 2025 being long after the expiry of the 30-day period. Any further inquiries to the Director ought to have been made within the required timeframe of the Act not after the expiry of the 30 day period under section 206X. The Act does not allow for the Director to produce a "second report" and allow the Applicants a further period to apply to VCAT. In the Respondent's view, the application is simply out of time ...
(a) prevents the Director from providing more than one report, especially in circumstances where a report may require clarification or correction, or
(b) only permits a site tenant from applying to VCAT after receipt of the first report of the Director, if more than one is produced.
Preliminary matter - new issues raised in 27 June 2025 submission
(a) whether the deferred management fee (DMF) is compliant with the RTA (section 4); and
(b) the profits of the respondent (section 9).
(a) At least 30 days prior to the Home Owner:
(i) offering to sell or transfer the Home;
(ii) selling or transferring the Home;
(iii) assigning his or her interest in this Agreement; or
(iv) otherwise ending this Agreement,
The Home Owner must allow the Village Owner reasonable access to the Home and the Site to enable the Village Owner to undertake the Home Refurbishment Works (at the Home Owner's cost).
(b) The Home Owner agrees to pay to the Village Owner all costs reasonably incurred by the Village Owner in undertaking the Home Refurbishment Works, plus GST, from the proceeds of the sale of the Home.
(c) If the Village Owner undertakes the Home Refurbishment Works but the sale of the Home does not proceed, then the Home Owner must pay the Village Owner all costs reasonably incurred by the Village Owner at settlement of the eventual sale of the Home.
(d) The Home Refurbishment Works are those works which the Village Owner in its reasonable opinion considers necessary to obtain the best and highest Market Value for the Home. The works may include (but are not limited to):
(i) cleaning, repainting, replacing surfaces with new surfaces, recarpeting or reflooring, making good any damage caused by fair wear and tear; and
(ii) replacing part or parts of the Home including any plant and equipment (such as the stove and the hot water services); and
(iii) removing any part or parts of the Home which were present at the time that the Home Owner purchased the Home or that the Home Owner put into the Home (whether or not with the Village Owner's consent) or that the Village Owner puts into the Home at the Home Owner's request.
Subject to this clause, the Home Owner must pay the Deferred Management Fee, plus GST, to the Village Owner if:
(b) the Home Owner dies (or if there are two Home Owners, then upon the death of the last of the Home Owners);
(c) the Home is sold or transferred to any person; or,
(d) (subject to clause 5) the Home is removed from the Site for any reason.
(i) 6% of the Home Sale Price for the first year of the Calculation Period (with any part of that year deemed to be a whole year), plus GST; and
(ii) 3% of the Home Sale Price for each subsequent year of the Calculation Period (with any part of a year deemed to be a whole year), up to a maximum of 10 subsequent years, plus GST.
(a) the HRC '...would have a cost to the Applicant in the tens of thousands of dollars.'
(b) the DMF is also said to be comparatively high, and the applicants point to other DMF fees highlighted in the CBRE report as being substantially lower than those at the respondent's park.
... the cost to the Applicants under their site agreement is tens of thousands of dollars greater than the cost to site tenants in generally similar parks. The difference in cost is not expressed purely in rent, because costs in Part 4A parks are not expressed solely or primarily in rent as they are in rental agreements. The Tribunal is not asked to weigh the reasonableness of other costs under a site agreement but is required specifically to consider the reasonableness of the increased rent, having regard to the terms of the site agreement (among other factors).
The Applicant submits that [3 March report] is substantially correct, in that the proposed rent is not excessive if one disregards the DMF and other terms of the site agreement. However, once the DMF and other terms of the site agreement are considered, it is apparent that the total costs borne by the Applicant under the site agreement will exceed those in comparable parks by tens of thousands of dollars. The Applicant submits it is not reasonable that they pay a rent that is comparable to the rent in generally similar parks, when the other costs payable under the terms of their site agreement radically exceed those in those other parks.
(a) the decision of Hayse v Bendigo Park Lane Holiday Park Pty Ltd (Residential Tenancies) [2025] VCAT 457 was cited as authority that DMFs and other direct and indirect charges should be taken into account when analysing whether the proposed rent is excessive.
(b) the CBRE report should not be relied upon, for reasons including:
(i) the CBRE report states it should not be relied upon by any external party other than the respondent;
(ii) there are references to irrelevant or incorrect provisions of the RTA;
(iii) that rents for comparable properties (which are included in the CBRE report) are only one factor to consider; and
(iv) that there is no analysis of how DMFs are related to market rents.
(a) The rent increase was supported by the CBRE report, and reflects rising operational costs, market comparisons with similar parks and the ongoing investment made in maintaining and improving community facilities.
(b) The Director's reports concluded the rent increase was not excessive.
(c) The DMF is not part of the rent, but is a capital based fee that only applies when the home is sold or in certain exit scenarios, which enables lower upfront purchase prices and moderate ongoing rent. The DMF was clearly disclosed at the time of entry. It is not a routine or current charge and does not affect the affordability of the rent payable today.
(d) The HRC:
(i) refers to optional refurbishment works that may occur when a resident exits and chooses to sell their home through Ingenia;
(ii) is not a guaranteed cost;
(iii) is not charged during the tenancy; and
(iv) does not impact the current rent.
(e) There are 139 other site tenants located at the respondent's park who have all accepted and are paying the increased rent (the same rent as the applicants), which shows that the rent increase is reasonable.
(f) The Director's reports provide direct comparisons with other similar Part 4A parks which highlight that the rent payable is similar to other Part 4A parks in the area. The applicants seek to distinguish the rents by stating the other Part 4A Parks do not charge DMFs but no evidence has been submitted to support this.
(g) The respondent's park has substantial facilities and is well maintained. There have been increases in costs in delivering these facilities. When looking at the full picture the rent increase sits well within a reasonable range.
(h) If DMFs were treated as a reduction against ongoing rent, it would distort the cost model and make it harder for operators to offer flexible, affordable housing options. These models are transparent, common across the industry, and operate alongside fair, market aligned rent structures.
CONSIDERATION OF THE MATTERS SPECIFIED IN SECTION 206Y(3) RYA
(a) the Director's report; and
(b) matters specified in paragraphs (a) - (h) of section 206Y(3) of the RTA.
(a) the rent payable for a similar Part 4A site in the Part 4A park
(a) for one person - $203.91
(b) for two persons - $239.96 (the 3 March report states the amount is $239.34).
(b) the rent payable for a similar Part 4A site in a similar Part 4A park in a similar location
(a) Palm Lake Resort - Truganina (fees of $218.00 per week)
(b) Avington - Point Cook (fees of $214.39 per week for one person and $246.87 per week for two persons)
(c) Lifestyle Communities - Tarneit (fees of $220.02 per week for one person and $254.19 per week for two persons).
(a) Insignia Federation Werribee, a park with 179 permanent sites, extensive facilities, and a site rent range of $203.91 (single) to $239.96 (couple) per week
(b) Insignia Federation Glenroy, a park with 152 permanent sites, extensive facilities and a site rent range that is also $203.91 (single) to $239.96 (couple) per week
(c) Lifestyle Deanside, a park with 255 permanent sites, extensive facilities, and a site rent range of $220.00 (single) to $254.20 (couple) per week
(d) Ingenia Lifestyle Lara, a park with 309 long term sites and located a substantially greater distance from Melbourne's CBD (i.e., not in a similar location), with extensive facilities and a site rent range of $205.00 to $244.00.
(c) the state of repair and general condition of the Part 4A site and the Part 4A park
(d) any variation in the cost of providing facilities or services that the site owner provides
(e) any changes in the rent and the condition of the Part 4A site or facilities in the Part 4A park since the site tenant first occupied the Part 4A site and since the last rent increase
(a) first increase from 1 January 2024, with the new rent $943.08 ($217.00 per week) - this is an increase of 4.9%.
(b) second increase (the increase the subject of this application) from 1 January 2025 to $1,040.00 ($239.34 per week) - this is an increase of 10.3%.
(a) for a two (2) bedroom apartment, the percentage change in rent between March 2023 and March 2024 is 11.4%; and
(b) for a two bedroom house, the percentage change in rent between March 2023 and March 2024 is 15.8%.
Changes in the condition of the respondent's park
(f) the number of rent increases (if any) in the preceding 24 months, the amount of each rent increase in that period and the timing of those increases
(g) any improvements made to the Part 4A site which should not result in an increase because they were made by the site tenant
(h) the terms of the existing or proposed site agreement (if any).
(a) the site tenant's financial obligations - which include the payment of site rent, utility charges and other charges (including the HRC, DMF and home sale charges);
(b) maintenance obligations of the parties;
(c) use of the village;
(d) home sale;
(e) home refurbishment works; and
(f) DMFs.
(a) the charges for home refurbishment works appear to be cost recovery only - paying the costs incurred by the respondent for cleaning, painting, recarpeting, and other refurbishment works when the home is sold; and
(b) there is no certainty that any charge at all will be incurred.
(a) the formula - in that the respondent's park has a higher yearly percentage (6% as against 3-4%) and cap (36% as against 15-20%)
(b) the DMF paid on an assumed scenario of 8 years tenure ($117,000.00 as against $44,250.00-$94,000.00).
IS THE PROPOSED RENT EXCESSIVE - THAT IS, IS THE PROPOSED RENT MORE THAN THAT WHICH SHOULD REASONABLY BE PAID BY A SITE TENANT?
What is meant by the rent which should reasonably be paid by a site tenant?
... [T]he expression "reasonable rental" is not a term of art. It has no fixed or precise meaning. It is of quite a different character to market rental.
In Opera House Investment Pty. Ltd. v Devon Buildings Pty. Ltd. [1936] HCA 14; (1936) 55 CLR 110, the High Court was concerned with construing a provision in a lease which required the lessee to pay to the lessor such rate of interest as the lessor "may reasonably contract to pay on the said moneys". At p. 116, Latham CJ said: "The word 'reasonable' has often been declared to mean 'reasonable in all the circumstances of the case.' The real question, in my opinion, is to determine what circumstances are relevant. In determining this question regard must be paid to the nature of the transaction." Starke J said, at p. 117 "'Reasonable' is a relative term, and the facts of the case must be considered before what constitutes a reasonable contract can be determined."
Returning to this case, we see no warrant for construing "reasonable rental" as "market rental". We first make the obvious point that the parties did not provide for a "market rental" as they so easily could have done. The parties provided for a "reasonable rental". This, in our opinion, means a rental which is reasonable in the light of all the relevant circumstances...
Is the proposed rent more than that which should reasonably be paid?
(a) the Director's conclusion, as evidenced in the 3 March report, is that the proposed site rent increase was not excessive - albeit that conclusion did not take into account the site agreement's deferred management fees. I note that I am required to have regard to this report in determining the application.[8]
(b) the CBRE report, which considered matters including site rents at competing parks, the amenity and standard of features at the respondent's village and the DMF structure compared to competing parks - assessed the market rent as, relevantly, $240.00 per week for couples; this was the fee then proposed by the respondent. In this respect the fee increase aligns with the site rent review mechanism in the site agreement that the applicants and other site tenants have agreed to.
[1] The reference to section 155 of the RTA appears to be an error - this a provision related to rent reviews at caravan parks, not Part 4A parks.
[3] Consumer Price Index, Australia, December Quarter 2024 | Australian Bureau of Statistics, accessed 15 July 2025.
[4] Consumer Price Index, Australia, December Quarter 2024 | Australian Bureau of Statistics, accessed 15 July 2025.
[5] The data is said to have been sourced from the Victorian Government Department of Families, Fairness and Housing.
[6] Macquarie Dictionary online - accessed 15 July 2025.
[7] Black's Law Dictionary (12th ed. 2024) - accessed 16 July 2025.
[9] Hayse v Bendigo Park Lane Holiday Park Pty Ltd (Residential Tenancies) [2025] VCAT 457, at paragraph 68.
Mrnjavac
Allswell Communities Pty Ltd
(1936) 55 CLR 110