Beginners guide to aged care – Part 3: Manufactured home estates

In the third instalment of the beginners guide to aged care, we look at the concept of manufactured home estates, often marketed as “Lifestyle communities” or “Over 55s communities”, which are becoming an increasingly popular option for retirees.

What is a manufactured home estate?

A manufactured home estate is a housing estate where residents purchase a stand-alone home, but not the land on which the home sits.  The park owner retains ownership of the land and the resident pays rent for the land.  Similar to a retirement village, residents share community facilities such as pools, gyms and parks.

These estates are regulated by the Manufactured Homes (Residential Parks) Act 2003 (Qld) which is the same legislation that governs residential parks and caravan parks.   Manufactured homes are not provided the same protections as those residential facilities governed by the Retirement Villages Act 1999 (Qld).

What are the costs involved?

Generally speaking, manufactured homes are less expensive than retirement villages.

Residents are required to pay:

Purchase price

Residents can either purchase an existing home or a new home to be constructed.  The transaction is generally exempt from stamp duty.

Ongoing rental fees for the land on which the home sits

The rental fees cover the residents’ entitlement to use the common areas and facilities in the estate which are maintained by the park owner.  Utilities (gas, electricity, water etc) are either incorporated into the rental fees or are metered and billed separately.

Rent can be increased annually (either a CPI increase or on the basis of a market review), or from time to time to cover special costs such as significant and unforeseen repairs to the common areas and facilities.

As with Retirement Villages, when making the decision to move into a manufactured home estate both the lifestyle and financial considerations must be weighed up.

When working through the financial implications of moving into a manufactured home estate compare expenses such as the rent to be paid for the land on which your house will sit with your current expenses such as rates or body corporate fees.

Exiting a manufactured home estate

A considerable advantage of a manufactured home estate when compared to a retirement village is that when a resident exits the estate, they are not hit with exiting fees.

As residents do not own the land on which their home sits, they will need to obtain the park owner’s consent if they wish to sell their home.  A resident may appoint the park owner to act as their agent to sell their home, in which case the park owner can charge a selling fee (but this cannot exceed what a real estate agent would charge as a commission).

When looking to purchase a home in a manufactured home estate consider if there are plans for further development within the manufactured home estate. If there is significant development still to happen it may impact any future resale value of your home when you wish to exit if you’re competing with brand-new homes in the same estate.

Key documents and things to consider before entering a manufactured home estate

A park owner must provide to any prospective resident:

  • a Homeowner’s Information Document
  • the Park Rules
  • two copies of the proposed Site Agreement

The Site Agreement relates to the rent of the site upon which the home is situated and sets out the specific terms and conditions upon which the resident occupies the site, including the amount of rent charged.  Residents can either enter into a new Site Agreement with the park owner or be assigned an existing Site Agreement by the outgoing resident, i.e. the seller of the home.

Once a prospective resident decides to purchase a home in the estate, there are two legally binding documents they will enter into:

  • a Contract for sale (between the resident and the seller of the home)
  • the Site Agreement (between the resident and with park owner)

As with any property purchase, we recommend that you obtain legal advice before signing a Contract for sale and Site Agreement.

For more information please contact our property team at Fox and Thomas.