Manufactured home parks (also known as residential land lease communities) are one option for older people looking to downsize and move to a better location.
Some manufactured home parks are open to people of any age, but there are some that are restricted to residents 55 years and older.
How are they different to other retirement living options and what are the benefits and risks of moving into a home park?
What is a manufactured home park?
- The older person owns the house/caravan but not the land
- The house/caravan will normally be prefabricated and cost less than a conventional house (generally 50% less than a similar sized home in that area)
- The home park village owns the land and charges site fees (rent) for using the land
- The village provides shared facilities and services for residents. The cost is shared among the residents and is normally included in the site fees
- The older person pays for their own home insurance and maintenance of the dwelling
- Village rules help provide a peaceful community but can be restrictive
- The village owner can evict a resident, but only in limited circumstances.
What are the benefits of manufactured home parks?
The benefits include:
- retirement to a desirable location that would normally not be affordable
- a ready-made community, new friends, and less social isolation
- shared services and facilities for residents such as pools, entertaining areas and social activities
What are the downsides to manufactured home parks?
There are some risks involved with a manufactured home:
- The site fees are normally not fixed by a formal contract, so increases can be unpredictable and excessive.
- Even though manufactured homes started out as moveable dwellings, that is now not always the case. This means that if you decide you don’t like the village or can no longer afford the site fees, you may not be able to move your home to another village.
- Even if you move out of the home, you still pay site fees for however long the home remains on the site.
- There are restrictions on sub-letting the home. Generally, you can only sub-let once in a 3-year period for a term of 12 months or less.
- The park owner may decide to change the use of the park.
What happens if the home park owner changes the use of the park?
What happens if the park owner wants to use the land for something another purpose or sell the land?
The law was changed in NSW in 2013 with the Residential (Land Lease) Communities Act 2013. Under the new regulations, if the park owner wants to change the use of the land they must compensate residents. The home is valued as if the park was still operating and all the services and facilities were still available.
When the Hastings Point Holiday Park was closed in 2012 and the residents evicted, the law only required residents to be compensated for the value of their property at the time of eviction. Many residents contested this and most came to a settlement.
Two residents who refused to settle were Judy Tucker and Beryl Anderson. Judy Tucker’s home was valued at $85,000 and Beryl Anderson’s home was valued at $40,000. The value was based on the age of the homes, but also the run-down state of the park, the fact that services and facilities had been terminated and that the park was no longer operating.
The new legislation meant that Judy received $230,000 and Beryl received $210,000 for their homes.
If you are thinking of moving into a manufactured home park village, talk to one of Catherine Henry Lawyer’s, caring, elder law and aged care law experts. We can advise you on the rules and regulations that apply and help you determine if a manufactured home is right for you. We can help you with the sale of your current home, navigating home park contracts, and updating your will and other documents to make sure your rights and wishes are protected. To confidentially discuss your needs call us on 1800 874 949 or fill in the form below, and we will be in touch.
