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  4. Pereira v Palm Lake Resort Pty Ltd - [2023] QCAT 104

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Pereira v Palm Lake Resort Pty Ltd[2023] QCAT 104

Pereira v Palm Lake Resort Pty Ltd[2023] QCAT 104

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Pereira v Palm Lake Resort Pty Ltd [2023] QCAT 104

PARTIES:

leonel da silva pereira

(applicant)

v

palm lake resort pty ltd

(respondent)

APPLICATION NO/S:

OCL042-21

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

20 March 2023

HEARING DATE:

16 January 2023

HEARD AT:

Brisbane

DECISION OF:

Member Goodman

ORDERS:

  1. The increase in rent to $175 per week is confirmed on the condition that it takes effect from 1 July 2020.

CATCHWORDS:

MANUFACTURED HOMES – where resident challenges market site rent assessment – where improvements not completed as anticipated in the market site rent assessment

Manufactured Homes (Residential Parks) Act 2003 (Qld), s 68, s 69, s 69A, s 69D, s 69E, s 70, s 71

APPEARANCES &

REPRESENTATION:

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

  1. [1]
    Mr Pereira owns a manufactured home positioned on a manufactured home estate owned by the respondent. He has lived there since 2013. There are 241 sites on the estate.
  2. [2]
    On 18 November 2019, the respondent advised Mr Pereira that, following a market site rent assessment (MSRA), his rent would be set at $350 per fortnight, effective from 1 January 2000. Mr Pereira lodged this application in the Tribunal challenging that increase.

This is the third application filed in the tribunal by Mr Pereira. The issue of whether Mr Pereira was able to proceed with this claim was determined in the decision of this Tribunal dated 4 March 2022.[1]

TRIBUNAL DECISION 4 MARCH 2022

  1. [3]
    The Tribunal noted that a previous application filed in this matter (OCL034-19) was resolved on 30 July 2019 by way of a Mediation Agreement “in full and final resolution of the dispute”. The terms of the agreement are confidential.
  2. [4]
    The Tribunal stated

“The Mediation Agreement resolved Mr Pereira’s claim to a rent reduction and damages based on the reasons for claim set out in OCL034-19. Neither party is entitled to dispute or re-litigate those matters or seek to dispute the agreed rent reduction or the period from which it was agreed to apply…

Mr Pereira is entitled to challenge the general site increase in accordance with the Act but is not entitled to do so in a way inconsistent with the Mediation Agreement … it is an abuse of process for Mr Pereira to rely in these proceedings upon a withdrawal of or change in the operations of the bistro, which occurred on or before 31 July 2019 to claim a rent reduction or to seek declarations for breach of the Act. Those parts of Mr Pereira’s claim are dismissed.”

THE CURRENT APPLICATION

  1. [5]
    Mr Pereira was notified of an increase to rent effective from 1 January 2020. He submitted this application to the Tribunal seeking:
    1. (a)
      An order invalidating the market site rent assessment dated September 2019;
    2. (b)
      An order setting aside the rent increases of $47.97 per fortnight;
    3. (c)
      An order for rent reduction to $225 per fortnight;
    4. (d)
      A declaration that the respondent has breached the Manufactured Homes (Residential Parks) Act 2003 (Qld); and
    5. (e)
      Costs.
  1. [6]
    The application is expressed to relate to three grounds:
    1. (a)
      GROUND 1 – the assessment is false as it was conducted on the basis that the community centre would be expanded and reconfigured to include a covered deck and bistro at a cost of $200,000, with work to commence on 23 September 2019. That work had not been carried out and so there is no justification for an increase of rent to $350 from 1 January 2020. Approval for development of the community hall was only given on 19 March 2020 and there is no provision for a bistro in the approved plans as had been previously promised. There has, therefore been a withdrawal of an advertised service;
    2. (b)
      GROUND 2 – the assessment is negligent in stating that community facilities appeared to have been fairly well maintained and presented in a good manner. The communal facilities were in unsafe and appalling conditions when the rent assessment was conducted. The report did not include any submissions or comments from residents, in breach of the Act. All resorts described in the reports have a gymnasium except this resort. The site plan is false and out of date, including pictures of facilities that do not exist. Security fences do not exist. Therefore, rent increase is not justified;
    3. (c)
      GROUND 3 – relates to the withdrawal of the bistro service, Tuesday night dinner service and withdrawal of a Foxtel service.

MATTERS WHICH DID NOT AFFECT THE TRIBUNAL’S DECISION

  1. [7]
    For the purposes of clarity, I acknowledge that the following issues have been raised, and note that they did not affect my decision:
    1. (a)
      Following the previous Tribunal decision, any change to bistro service arrangements will not form part of this decision.
    2. (b)
      Mr Pereira’s concerns that a particular person is both president of the home owners committee and an employee of the respondent. There is no evidence that the assessment of rent has been affected by any such circumstance. 
    3. (c)
      Mr Pereira has provided copies of documents which raise issues regarding security (dated 2005) and maintenance of the creek area (dated 2009). I do not propose to consider those issues in this decision. They seem to be historical in nature. It seems that the creek area issue was dealt with through council in December 2019.
    4. (d)
      Mr Pereira has provided a copy of a letter from management to the residents committee dated 8 December 2004 stating that Foxtel was available on the big screen television. In a document which Mr Pereira states was published in December 2017, the caretaker / manager refers to Foxtel being available. In 2019, Mr Pereira complained to the respondent that Foxtel was no longer available. The respondent replied, saying that Foxtel was removed due to an inability to come to a commercial agreement with Foxtel. The provision of Foxtel did not form part of an agreement between the parties. The current rent assessment has not been affected by the availability or not of Foxtel. I do not propose to consider the Foxtel issue further in this decision.
    5. (e)
      Mr Pereira contends that the assessor was not independent or impartial because they took instructions from the respondent, particularly in relation to waiting for any advice that the building works did not happen, proposals were changed, or the building work was delayed, and they have refused to respond to his letters, except to say that “our instructing party in this regard is Palm Lake Group”. I am not satisfied that a reference to an “instructing party” or the existence of such a relationship is evidence that the assessor is not independent or impartial. I do not propose to consider that issue any further in this decision.

ISSUES FOR DETERMINATION

  1. [8]
    Thus, the issues for the Tribunal’s determination raised in the application relate to:
    1. (a)
      whether the rent should be increased when the proposed improvements to community facilities were not completed in the time anticipated, and
    2. (b)
      whether the rent increase was justified given the state of the facilities.
  2. [9]
    The Act provides, relevantly, that:[2]
    1. (a)
      The site agreement must state the basis for working out the increase in rent;
    2. (b)
      Prior to a rent increase on the basis of a market review, the park owner or registered valuer must consult with the “interested entities” – the home owners committee or a number of home owners if there is no home owners committee;
    3. (c)
      Appropriate notice of the proposed rent increase must be provided, along with a market valuation of the rent proposed prepared by a registered valuer;
    4. (d)
      The home owner may dispute the proposed increase on the basis that it is excessive by lodging an application with the tribunal;
    5. (e)
      The tribunal may make an order:
      1. Reducing the amount of the increase by a stated amount;
      2. Setting aside the increase;
      3. Confirming the increase with conditions;
      4. Another order the tribunal considers appropriate.
    6. (f)
      The tribunal may have regard to:
      1. the range of site rents usually charged for comparable sites in comparable residential parks in the locality of the park;
      2. if that is impractical or data is not available, or it is just and equitable to do so - the range of site rents usually charged for comparable sites in comparable residential parks in comparable localities to the locality the park is in;
      3. if neither option is practical or data is not available, or it is just and equitable - general trends in rent for residential accommodation in the locality the park is in;
      4. the increased site rent compared to the previous site rent;
      5. the frequency, and amount, of past increases in the site rent payable under the agreement;
      6. any increase in the CPI number during the previous site rent period;
      7. the amenity or standard of the common areas and communal facilities;
      8. any withdrawal of a communal facility or service previously provided at the park;
      9. any addition of a communal facility or service not previously provided at the park;
      10. any increase in the park owner’s operating costs for the park during the previous site rent period;
      11. whether the increase is fair and equitable in all the circumstances of the case;
      12. anything else the tribunal considers relevant.
    7. (g)
      If the rent increase is set aside or reduced, the park owner must refund the difference to the home owner.

THE 2013 SITE AGREEMENT

  1. [10]
    Mr Pereira occupies the site pursuant to a site agreement he signed on 3 September 2013. At that time, rent was charged at $260.23 per fortnight, which included council rates, water up to 10KL per month, and “use of all resort facilities”. The agreement provided for site rent increases as follows:
    1. (a)
      5 year market review starting January 2015. Each five years, rent is to be increased to “market rent”, which is defined as the amount for which a property should rent at the relevant date between a willing owner and willing tenant in an arms-length transaction after proper marketing, wherein the parties had each acted knowledgably and without compulsion.  
    2. (b)
      an annual rent review in all years that are not a market review year. The rent is to increase in those years according to a formula based on CPI.
  2. [11]
    The Agreement further provides that, in determining Market Rent, the park owner shall consider any reasonable factors the park owner considers to be relevant including, but not limited to:
    1. (a)
      The site rent payable by the home owners or occupiers of comparable site(s) in the park or other reasonably comparable parks;
    2. (b)
      The value of the site for rental purposes as determined by a valuer who is a member of the Australian Property Institute and duly registered as a valuer;
    3. (c)
      The amount of outgoings (including rates and other statutory charges) payable by the park owner and any increases in the outgoings;
    4. (d)
      The estimated costs of services and utilities to the site where they are not separately paid for by the home owner;
    5. (e)
      The nature of any fittings provided by the park owner within the home site.
  3. [12]
    The Tenancy Documentation signed by Mr Pereira on 3 September 2013 states, relevantly, that:
    1. (a)
      The Act does not prescribe the rent levels at residential parks. Most residential parks are commercial enterprises and their fees are determined by taking into account factors such as market forces, location, facilities offered, establishment costs, park size, mortgage payments, local government rates and charges, wages and other operating costs.
    2. (b)
      The park owner will provide the following facilities or services to residents: gardens, park bus for excursions, park bus for shopping trips, dining facilities, security gates, recreational/social facilities (recreation room, bowling green, heated swimming pool and spa, bistro).
    3. (c)
      Where the amenity or standard of the park has substantially deteriorated or where communal facilities or services have been withdrawn, or where a communal facility or service described in the advertising or another document prepared by or for the park owner has not been provided, the home owner may apply to the tribunal for an order reducing site rent payable.

AMENDED SITE AGREEMENT 2019

  1. [13]
    On 27 September 2019 the respondent wrote to Mr Pereira enclosing an addendum to the Site Agreement, noting that signing the addendum was voluntary. It provided for an alternative method of rent calculation. This proposal was not accepted by Mr Pereira.

INCREASE IN RENT FROM 1 JANUARY 2020

  1. [14]
    On 18 November 2019, the respondent advised the applicant that rent would increase from $302.03 per fortnight to $350.00 per fortnight, on the basis of the market site rent assessment conducted by Knight Frank in September 2019.
  2. [15]
    On 21 November 2019, Mr Pereira wrote to the respondent raising his concerns, including that surveillance security cameras and fences were still damaged from a flood in 2017. Mr Pereira raised concerns that the facilities were not well maintained. 
  3. [16]
    On 3 December 2019, the respondent responded, saying that cameras were working, and the fencing was in a reasonable state of repair.
  4. [17]
    On 22 November 2019, Mr Pereira wrote to the assessor attaching photographs of the gym area, and challenging the finding that the communal facilities were “well maintained and presented”.

THE MARKET SITE RENT ASSESSMENT

  1. [18]
    The assessment contains the following information:
    1. (a)
      The site was inspected on 12 September 2019;
    2. (b)
      The assessed market rent was assessed on the basis that home owners have continued access to the various communal facilities as inspected and noted within the report and detailed within the supplied Site Agreement;
    3. (c)
      The assessor had regard to: site agreements, current site rents rates, current site/village plan, and water usage data;
    4. (d)
      The assessor met with representatives of the Home Owners Committee (HOC), and received submissions from them;
    5. (e)
      The assessor was unable to verify all supplied data and have utilised it in good faith. Should the information be incomplete or be varied, or if any critical assumptions are incorrect, they reserve the right to review and amend the market site rent assessment;
    6. (f)
      Extensive communal facilities are provided for residents – a community centre, outdoor swimming pool, heated indoor pool and spa building (shared with Palm Lake Resort Waterford), sauna, outdoor bowling green, bowls clubhouse and covered BBQ area, residents workshop, double car washing bay structure and walking tracks. Photos are included in the assessment “from our inspection of the property”;
    7. (g)
      At the date of the inspection, communal facilities “appeared to be fairly well maintained and presented in a good manner commensurate with their age, reflecting fair wear and tear, although a few maintenance issues were brought to our attention by the HOC”;
    8. (h)
      The assessor was made aware of a capital expenditure program to undertake an extension and refurbishment of the community centre to include a bistro and covered deck. This work was to commence 23 September 2019;
    9. (i)
      The assessment was completed on the “critical assumptions” that these works would be “undertaken within a timely manner”. If the advised works were not carried out, the assessment “must be returned for review and further comment”, with the assessor reserving the right to amend the assessment accordingly;
    10. (j)
      The assessment compared rent payable in seven other MHRPs as follows: 
      1. Regal Waters Bethania – rent $165 per week plus water costs. 231 sites. Fully developed established MHRP located in the same suburb. Communal facilities comprised of clubhouse, solar heated outdoor pool, bowls green, workshop, gymnasium, library, croquet court, BBQ area, village bus and caravan storage. Considered comparable.
      2. Palm Lake, Eagleby Heights – rent $192.98 per week plus water costs. 355 sites. Fully developed established MHRP. Communal facilities comprised of two community centres, covered bowls green with clubhouse, tennis court, golf practise nets / cages, hair salon and doctor, workshop, badminton court, croquet court, bocce court, dog off leash area, two outdoor pools. Community centres provide lounge and dining area, commercial grade kitchen, licensed bar, theatre, library, craft room, dance floor area, gymnasium, billiards area, amenities, indoor swimming pool, spa and sauna, and covered alfresco area. Other facilities include caravan and boat storage, two village buses, park areas with BBQ gazebos and greenspace area. Considered superior.
      3. Palm Lake, Waterford – rent $184.14 per week plus water costs. 246 sites. Fully developed older style MHRP, adjoining Palm Lake Resort Bethania. Communal facilities comprised of a community centre, outdoor swimming pool, indoor pool and spa, sauna, undercover bowling green plus clubhouse, covered alfresco dining BBQ area, theatre, gymnasium, arts and craft room, library, workshop, golf driving nets, mini golf green and caravan storage. Community centre provides large multi-purpose room with lounge, dining, kitchen, servery, timber dance floor area and billiards area. Considered superior.
      4. Palm Lake, Mt Warren Park – rent $182.66 per week plus water costs. 80 sites. Fully developed boutique MHRP adjacent to Aged Care Facility. Communal facilities comprised of community centre, indoor swimming pool and spa, outdoor bowling green, workshop and covered BBQ area. Community centre comprises multipurpose room with lounge, bar, kitchen, library, hair salon, billiards area, parquetry dance floor, gym, sauna and alfresco dining area. Triple car washing bay. Considered comparable.
      5. Ruby, Eagleby – rent $180.78 per week plus water costs. 379 sites. Fully developed MHRP. Community centre with BBQ pavilion, cinema, ballroom with stage, dining room, kitchen, bar, library, arts and crafts room. Solar heated pool and spa, bowling green, tennis court, croquet lawn, workshop, gymnasium, caravan storage, waling paths. Considered superior.
      6. Sapphire, Eagleby - $179.39 plus water costs. 216 sites. Fully developed older style MHRP. Communal facilities comprised of community centre with lounge and dining room, games / snooker room, kitchen, library, arts and craft room. Solar heated pool and spa, bowling green, tennis court, workshop, gymnasium, caravan storage and BBQ facilities. Considered comparable.
      7. Ingenia Lifestyle, Bethania - $179.00 per week plus water costs. 165 sites. Modern developing MHRP. Communal facilities comprised of community centre, library, arts and crafts room, games/ billiards. Solar heated pool and spa, lawn bowls green, workshop, gymnasium, caravan storage, BBQ facilities. Considered comparable.
  1. (k)
    Site rates at other nearby MHRPs range from $165 to $192.98 per week, plus water costs.
  2. (l)
    In reaching an assessment of site rent, the assessor took into account various factors including:
    1. The location and size of the subject and each of the comparison MHRPs;
    2. The terms and conditions of the site agreements including market review period, yearly indexation method and inclusion in the site agreement for services and utilities;
    3. Age of the property, site sizes and general property amenity;
    4. The quality and extent of the community facilities provided for residents within the subject and comparison properties.
  3. (m)
    Sapphire, Regal Waters and Ingenia are considered comparable due to being reasonable sized MHRPs and generally providing a similar amount / level of community facilities.
  4. (n)
    An appropriate market site rent assessment as at 12 September 2019 is within the range $170 - $180 per week per site. An assessment of $175 per week per site is considered to be a competitive market level of rent in the local and wider catchment and recognises the location, age, quality and other characteristics of the subject.
  5. (o)
    This assessment critically assumes that the advised community centre extension and refurbishment program is undertaken. Should this work not be completed, this assessment must be returned for review, comment and potential reassessment.

MR PEREIRA’S CONCERNS WITH THE MARKET SITE RENT ASSESSMENT

  1. [19]
    As I understand the application, Mr Pereira raises issue with the contents of the assessment as follows:
    1. (a)
      The assessment was based on advice that the work on the hall would commence in September 2019. This work was not approved until 19 March 2020. In April 2020 the park owner’s caretakers provided a newsletter stating that “work on our main building has commenced”. A newsletter from the HOC dated July 2020 states that the club house renovation had been completed.
    2. (b)
      The assessment report does not include notes of the meeting between the assessor and representatives of the HOC, or explain how their views were taken into account in the assessment.
    3. (c)
      The assessment did not take into account the conditions of security fences or the conditions of the roads which require fixing.

RESPONSE FROM THE ASSESSOR

  1. [20]
    On 4 February 2020, the assessor wrote to Mr Pereira acknowledging correspondence received from him, and advising:
    1. (a)
      As property valuers, they are not plant and equipment specialists. Issues relating to the state of the gym equipment should be taken up with the park owner.
    2. (b)
      When undertaking market site rent review exercises, they compare the subject property and its facilities to “considered relevant evidence communities”. They do not test services or facilities, but formed the professional opinion that, while the subject community is 30 – 40 years old, it is well maintained overall.
    3. (c)
      The assessment was on the basis that the proposed expansion works on the community centre would commence September 2019 and be completed early 2020. If the works were not undertaken, or not to the extent advised, the market site rent assessment would need to be readdressed.

RESPONSE FROM THE RESPONDENT

  1. [21]
    The works on the clubhouse commenced in October 2019. The work was delayed for some time as the original plans were altered so that the works became a significant upgrade.
  2. [22]
    On 11 July 2019 the respondent requested an independent review by Site Safety Audit in response to concerns raised by Mr Pereira about the gym. The two items that required immediate attention were attended to. In any event, a new gym was constructed as part of the refurbishment/upgrade, and is now in use.
  3. [23]
    The MSRA has been undertaken in an independent and professional manner, the basis and methodology of the valuation is clear, and the outcome is clearly in line with market rent. There is no evidence that the MSRA does not meet professional standards, and Mr Pereira has not provided any independent alternative valuation evidence. The Tribunal should have regard to previous decision of the tribunal which raised these issues as critical to consideration of such applications.[3]
  4. [24]
    There is no justification for a reduction in rent. The assessment was considered without the additional clubhouse extension provided. Mr Pereira’s claims of services not provided are without evidence or merit.

FINDINGS OF THE TRIBUNAL

  1. [25]
    Mr Pereira asserts that he does not accept the valuer’s assessment that the community facilities are fairly well maintained. The Tribunal does not make findings based on assertions, but rather on evidence. Mr Pereira has not provided any expert or independent evidence to support his claims. I note that the assessment documentation states “… we have only undertaken an inspection of the communal facility improvements. As such, we have critically assumed that the improvements are reasonably structurally sound, considering their approximate age and that an ongoing maintenance program is undertaken.” There is no evidence to satisfy me that the communal facilities were not reasonably structurally sound, or that there was not an ongoing maintenance program in place. I am unable to make a finding, on the evidence available to me, that the valuer’s view that the community facilities were fairly well maintained was incorrect.
  2. [26]
    I have considered the factors set out in s 70(5) as follows:
    1. (a)
      The valuer’s assessment contains information regarding rents charged in other parks. I accept the sites chosen are comparable residential parks in the locality of the park.
    2. (b)
      The increase in site rent is from $302.03 per fortnight to $350.00 per fortnight.
    3. (c)
      The frequency and amount of previous increases has been pursuant to the site agreement signed by Mr Pereira, including CPI increases.
    4. (d)
      As noted above, Mr Pereira has raised concerns about the amenity or standard of the common areas and communal facilities. In the absence of independent expert evidence about the standard, I accept the valuer’s opinion that it was reasonable. I would expect that the respondent did not invest significant funds into improvement of areas that were to be replaced with the refurbishment. That does not mean that they were not of a reasonable standard. I do note that, with the construction of the new facility, the common areas and communal facilities have been significantly improved.
    5. (e)
      The rent assessment was conducted on the basis that the new facilities would be available from 1 January 2020. They were not. I consider that the increase in the rent on account of the expectation of improved facilities available from 1 January 2020 was unreasonable when they were not available for another approximately 6 months.
    6. (f)
      I accept that the operating costs of the park owner will increase over time, but have no particular evidence as to the amount of any such increase.
    7. (g)
      The assessor’s report does not detail what (if any) concerns were raised by the home owners committee or indeed comments made. A more complete report would have included this information. I accept, however, that the assessor did meet with the HOC, and so satisfied their statutory obligations to consult.
  3. [27]
    Overall, I consider the increase in rent in line with rents paid in similar parks in the local vicinity. There is no evidence to the contrary. I find that the increase is fair and equitable from the time that the refurbishment was complete. That appears to be around 1 July 2020. The increase in rent to $175 per week is confirmed on the condition that it takes effect from 1 July 2020.[4]
  4. [28]
    There will be no order as to costs, as is the usual practice in the Tribunal.[5]

Footnotes

[1] Leonel Da Silva Pereira v Palm Lake Resort Pty Ltd [2022] QCAT.

[2]  ss 68-71 Manufactured Homes (Residential Parks) Act 2003 (Qld).

[3]  The respondent refers to Wain & Anor v Palm Lake Resort Pty Ltd [2020] QCAT 175, and Lewis & Anor v Palm Lake Resort [2021] QCAT 259.

[4]  s 70(4)(c).

[5]  s 100 Queensland Civil and Administrative Tribunal Act 2009 (Qld).

Close

Editorial Notes

  • Published Case Name:

    Pereira v Palm Lake Resort Pty Ltd

  • Shortened Case Name:

    Pereira v Palm Lake Resort Pty Ltd

  • MNC:

    [2023] QCAT 104

  • Court:

    QCAT

  • Judge(s):

    Member Goodman

  • Date:

    20 Mar 2023

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Lewis v Palm Lake Resort [2021] QCAT 259
1 citation
Jump To
Cite 1 - [2021] QCAT 259
Wain v Walter Elliott Holdings Pty Ltd [2020] QCAT 175
1 citation
Jump To
Cite 1 - [2020] QCAT 175

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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