Buying Into A Village - Information Sheet B3
Prohibited Terms
There are several things that are not allowed, under the law, to be included in a site agreement.
Renters of land in a land-lease village cannot be asked to:
- take out any form of insurance
- pay additional rent or penalties if they break the rules in the agreement
- pay for the rental provider or agent to prepare the agreement
- pay rent in advance in a way that requires additional costs (other than bank fees or account fees payable on the renter’s bank account)
- use the services of a third-party service provider nominated by the rental provider (other than an embedded network)
- pay for or organise maintenance of safety equipment that is the rental provider’s responsibility
- indemnify the rental provider
In addition, the agreement cannot say:
- rent will be reduced if the renter does not break the rules in their agreement
- the renter will be paid rebates or other payments if they do not break the rules in the agreement
- the renter will be bound by a site agreement that they did not agree to in writing, after having an opportunity to review it before entering into the rental agreement
- the renter must pay the rental provider’s costs of filing an application to VCAT
- the renter must pay an insurance excess for a rental provider’s policy
- the renter is liable by default, for an insurance excess to be paid under an insurance policy of the rental provider (each situation must be considered)
- the renter must pay a fixed fee for terminating an agreement early (unless the basis for calculating the fixed fee has been set out in the agreement
You can find these prohibited terms on the Consumer Affairs Victoria website - www.consumer.vic.gov.au - Look for the section titled Residential rental agreements.
If you find that the rental provider has included any of these prohibited terms in the Site Agreement that you are being asked to sign, it would be a good idea to delay signing and seek legal advice.
A site renter can apply to the Victorian Civil and Administrative Tribunal (VCAT) for an order declaring a term used in a site agreement as invalid or if they wish to vary a term used in a site agreement.
