key takeaways
Over the last 15 years, manufactured home parks have evolved and become an increasingly popular and affordably priced alternative to the traditional residential property ownership model for many Australians, particularly those in specific sectors such as the ‘over 55s’ population.
As demand has increased, many developers have made the move to include manufactured home parks in their portfolios, fighting to meet the real need for affordable housing. However, there are five key considerations that all developers should be aware of before considering manufactured home park operations.
But First, What Is a Manufactured Home Park?
A manufactured home is a type of dwelling that exhibits the characteristics of a traditional house but with the added feature of mobility. These homes are designed to be moved from one location to another and are not permanently affixed to the land.
Manufactured homes do not include caravans or tents, although they may be located in residential parks that include a mixture of manufactured homes, caravan sites, tents, and holiday cabins.
Despite the fact they can be shared, developers in the sector are increasingly focussed on acquiring, developing, and operating sites that exclusively offer manufactured homes as opposed to offering a mix of any other accommodation types, such as caravan and tent sites.
They’re doing this for a myriad of reasons, including:
Who Regulates Manufactured Home Parks?
The Manufactured Homes (Residential Parks) Act 2003 (The Act) regulates manufactured homes located in registered parks in Queensland.
The Act aims to regulate the rights and responsibilities of parties involved, the standards for the homes and park facilities, and the procedures for buying, selling, and moving manufactured homes. The Act also provides a framework for dispute resolution and park closures.
Remember, in order to be considered a manufactured home (and thus regulated under The Act), the home must adhere to the definition laid out in The Act:
The Act also lays out the rigorous guidelines for the documents that must be presented and signed by both the operator and the buyer of a manufactured home. These include:
In late 2017, the Manufactured Homes (Residential Parks) Regulation 2017 further regulated the sector by prescribing a list of terms that are prohibited in site agreements, including:
Once a developer understands what a manufactured home park is and how it’s regulated, they can consider the top 5 considerations for park acquisition and development.
Top 5 Considerations for Developers and Manufactured Home Parks
Whether a developer is acquiring or establishing a new manufactured home park, it’s crucial to consider the following as part of its initial feasibility study and due diligence investigations on the proposed site:
Development approval and Council compliance
Ensuring the right town planning and development approvals are in place is crucial for the success of your manufactured home park. Before making any moves, it's important to carefully assess the usable land for the park and make sure there are no restrictions that could impact your plans.
For example, many existing parks are located in coastal areas, so it‘s essential to check that there are no restrictions on the title to the land, such as restrictive covenants or easements. You also want to ensure that the statutory restrictions, such as coastal protection or vegetation management controls, won't prevent you from using the land for housing manufactured homes.
Developers should engage planning and legal advisors in the early stages to ensure compliance with these requirements.
Access to amenities and services
Particularly if a developer markets its park exclusively to a sector such as the ‘over 55s’, it is important to consider whether the park (itself) or the surrounding area will offer amenities and services to cater for the owners of homes in the park now and into the future.
Services and amenities that could be important to an aging population may include:
By keeping the needs of your target audience in mind, you'll create a park that's both desirable and practical. And you'll set your park up for long-term success by providing a community that caters to its residents' every need.
Representations and marketing material
As a developer, it's crucial to be transparent when advertising future park amenities to prospective homeowners. You don't want to make promises you can't keep or create a risk of misrepresentation that could lead to serious consequences.
When marketing future amenities, make sure to clearly communicate what's in the works and what's not. This will help you avoid creating false expectations and prevent any potential disputes with homeowners down the line.
Keep in mind, making any false or misleading representations can result in termination rights under site agreements, reductions in site rent, or even legal claims against the developer or park operator. So, always err on the side of caution, and be upfront about what your park can offer.
Site agreements and park rules
To make sure your manufactured home park is financially viable, it's crucial to engage the right consultants to review site agreements and ensure that site rent and other charges can be recovered from homeowners. Legal and accounting advisors can help you ensure that everything is in order and that site agreements are compliant with relevant statutory requirements.
If you're looking to acquire an existing park, it's also important to do your due diligence by reviewing the park's financial records and checking its history of compliance. This way, you'll have a clear understanding of what you're getting into and can make an informed decision.
When it comes to site agreements, your consultants should pay close attention to the terms, making sure they comply with the regulations that govern manufactured home parks in Queensland. By taking these steps, you'll be well on your way to creating a financially viable and successful manufactured home park.
Other regulatory requirements
Where a developer markets its park exclusively to a sector such as the ‘over 55s’, it is important to ensure that any anti-discrimination laws are complied with and (if available) that appropriate exemptions are investigated and obtained for the developer’s proposed marketing and use of the park.
conclusion
In conclusion, manufactured home parks have become a popular alternative to traditional residential property ownership in Australia, particularly for the over 55s population.
Developers should be aware of the five key considerations for MHP operations and the regulations set by the Manufactured Homes (Residential Parks) Act 2003.
Before acquiring or establishing a manufactured home park, developers should consider the development approval and council compliance, access to amenities and services and the park's infrastructure, sustainability and maintenance, location, and park management.
By considering these factors, developers can ensure the success and sustainability of their manufactured home park.
GET IN TOUCH WITH US!
The McInnes Wilson Lawyers Real Estate and Projects team has extensive experience working with manufactured home parks, and are dedicated to helping more people navigate the complex legal landscape of this unique industry. Whether you're a developer looking to acquire an existing park, or you're an owner looking to protect your rights and interests, the MCW team has the expertise you need to succeed.
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