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Wain v Walter Elliott Holdings Pty Ltd QCAT 175
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Wain & Anor v Walter Elliott Holdings Pty Ltd trading as Palm Lakes Resort Pty Ltd  QCAT 175
walter elliott holdings pty ltd trading as palm lakes resort pty ltd
Other civil dispute matters
19 May 2020
On the papers
The Tribunal declines to appoint an independent valuer pursuant to s 70A of the Manufactured Homes (Residential Parks) Act 2003 (Qld).
ENVIRONMENT AND PLANNING – ENVIRONMENTAL PLANNING – DEVELOPMENT CONTROL – CONTROL OF PARTICULAR MATTERS – RESIDENTIAL – CARAVAN PARKS AND MOVEABLE DWELLINGS – whether Tribunal should appoint an independent valuer – whether existing valuation does not reflect a reasonable market review
Manufactured Homes (Residential Parks) Act 2003 (Qld), s 69D, s 70A
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
- The applicants seek an order for the appointment of an independent valuer pursuant to s 70A of the Manufactured Homes (Residential Parks) Act 2003 (Qld) (the Act). That section relevantly provides:
Tribunal may appoint independent valuer for market review of site rent
- This section applies if—
- the park owner for a residential park gives a home owner a general increase notice for a proposed increase in the site rent based on a market review of site rent; and
- the home owner applies to the tribunal under section 70(3).
- The tribunal may appoint an appropriately qualified and independent registered valuer to help the tribunal in relation to the application including, for example, by—
- giving the tribunal a written valuation for a market review of site rent; or
- giving expert evidence in a proceeding for the application.
- The tribunal may appoint a valuer under subsection (2) if satisfied—
- at least 1 of the following applies—
- the relevant market valuation does not reflect a reasonable market review of site rent in the circumstances, including, for example, because the basis or methodology for the review is not reasonable; and
- for a general increase notice for the same general increase day given to the home owners for at least 5 sites in the residential park (the notified sites)—the home owners for the threshold number of the notified sites have applied to the tribunal under section 70(3).
- If the tribunal appoints a valuer under subsection (2), the park owner must pay the valuer’s costs of helping the tribunal, including—
- the costs of preparing a written valuation, if any, required by the tribunal; and
- the fees and allowances for giving evidence, if required, in a proceeding.
- The respondent relies on a market valuation prepared by Knight Frank dated 26 March 2019.
- The applicants have raised a number of issues with the Knight Frank report in their application. The Tribunal subsequently directed the filing of submissions in relation to whether it should appoint an independent valuer. In particular, the respondent’s submissions included a response by Knight Frank to the applicants’ complaints.
- Without setting out the relevant submissions in full, the parties’ respective positions on the Knight Frank report can be summarised as follows:
Knight Frank response
The respondent failed to comply with its obligations under s 69D of the Act to consult with interested entities.
Knight Frank met with the home owners committee on 26 March 2019, and received a submission from the committee on 30 March 2019.
The valuation report is dated 26 March 2019, which is the date of the inspection in accordance with the valuation standards, but the report was not issued until 9 April 2019. This was more than 63 days before the date of the increase which was to apply from 1 July 2019.
The parks that have been classified as comparable are in fact superior.
Knight Frank reviewed eight parks in the surrounding Gold Coast region, and classified them using professional judgment.
Knight Frank did not have an understanding of the multi-use facilities, maintenance issues, location, access to transport and shops and historical flooding events.
Knight Frank was made aware of these issues by the home owners committee, and took them into account.
The report does not take into account the facilities written into the tenancy agreements but which are not provided.
Knight Frank considered the facilities present at the date of inspection.
Knight Frank did not take into account that air conditioners in the club house, bowling green, putting green, boat, tennis court, swimming pool and flood plain walking paths were unable to be used by residents for a period of six months from 27 March 2017 due to flood damage.
The report has been prepared on the assumption of the home owners having continued access to the facilities. The assumption specifically relates to a situation where an operator takes away a significant community facility.
The respondent has lodged a new development application on the flood plain with refurbishment and update of the club house. “How can a valuation be done on a water frontage development that does not exist?”
Knight Frank’s assessment related to the state of the facilities and amenities as at the date of inspection.
Knight Frank failed to take into account that the respondent has a three yearly rent review, rather than a four or five year rent review in the superior resorts.
A market review every three years keeps the rent more in line with the market.
The clubhouse plan design is over 14 years old and has had minimal upkeep and maintenance.
The age and condition of the facilities were considered in assessing the market rent.
There is no nearby public transport.
This was considered.
There are no nearby convenience stores, shops, chemist, etc.
This was considered.
Caravan storage is now being charged for many residents. The caravan and boat storage area is subject to major flooding, and the caravans and boats need to be moved when this occurs.
The majority of park operators charge for caravan or boat storage. This is completely discretionary, and is not relevant to a market rent assessment.
The 15 homes challenging the rent increase are paying $396 per fortnight plus all water costs, while other sites are paying $376 per fortnight including water costs.
No water consumption allowance was made for the sites subject to a market review due to the terms of the current site agreement not being inclusive of water consumption allowance.
A lot of equipment in the clubhouse is provided by residents.
It is common practice at parks for home owners, clubs and committees to fundraise and provide equipment to community facilities for the benefit of homeowners to use.
- The applicants also submitted that the trend analysis provided by realestate.com.au showed a slight decline in house prices between 2018 and 2019, suggesting that rent should remain the same or reduce. I note that the Knight Frank report purports to take into account the rental rates of what it considers to be comparable sites.
- Having considered the respective submissions of the parties, I am satisfied that Knight Frank has provided a reasonable explanation in relation to each of the applicants’ complaints. I am therefore unable to conclude that the market valuation prepared by Knight Frank does not reflect a reasonable market review. In particular, I am unable to discern anything in the basis or methodology adopted by Knight Frank which is unreasonable.
- The applicants are obviously dissatisfied with the Knight Frank assessment, and it is always possible that another valuation might arrive at a different assessment (whether that be higher or lower). However, this does not justify the requiring the respondent to incur the costs of paying for a second valuation in the absence of any demonstrated unreasonableness in the first valuation.
- The Tribunal declines to appoint an independent valuer under s 70A of the Act.
- Published Case Name:
Jeanette Wain and Raymond Westcott v Walter Elliott Holdings Pty Ltd trading as Palm Lakes Resort Pty Ltd
- Shortened Case Name:
Wain v Walter Elliott Holdings Pty Ltd
 QCAT 175
19 May 2020