Living In A Village - Information Sheet L4
Rental Fees and Annual Increases
The main on-going fee to be considered in a land-lease village is the site rental and the applicable annual increases.
Under current Victorian law, rental increases can only occur once every 12 months. The Site Agreement between the home owner and village owner must state what mechanism(s) will be used to increase the rent.
Rent increases can be either by a fixed amount e.g., a percentage; or a non-fixed amount e.g., an amount decided by the village owner, the Consumer Price Index (CPI) or by a Market Rent Review. A Market Rent Review is carried out by a property valuer, hired by the village owner to compare the characteristics of that village to similar ones in the area, and recommend the rental that should be applied. In some cases, the village owner may use all mechanisms or a combination of 2 or all 3 mechanisms. It may be that not all homeowners in the same village have the same mechanisms for rent increases stated in their Site Agreements. IT IS ADVISED THAT PROSPECTIVE LAND-LEASE TENANTS CAREFULLY CHECK THE RENTAL INCREASE MECHANISMS USED BEFORE SIGNING A SITE AGREEMENT.
For a fixed amount increase, the village owner must give 28 days’ notice to home owners and use the official notification form as can be seen on the link Notice of fixed rent increase to site tenant (Word, 70KB) (Note: to use this link, press Control and click on the link at the same time.)
For a non-fixed amount increase, the village owner must give 60 days’ notice to home owners and use the official notification form as can be seen on the link Notice of non-fixed rent increase to site tenant (Word, 82KB) (Note: to use this link, press Control and click on the link at the same time.)
Only home owners whose Agreements allow rent increases by a non-fixed amount, may challenge the increase through the Consumer Affairs Victoria (CAV). Fixed rent increases must be challenged at the Victorian Civil and Administrative Tribunal (VCAT). Any challenge must be lodged within 30 days of receipt of the notice of rent increase.
You can see further information about rent increases in these sections of the Residential Tenancies Act 1997
- Section 206SA – Rent increases in site agreements
- Section 206V – How much notice is required of non-fixed rent increase?
- Section 206W – Site tenant may complain to Director about excessive rent
For information on applications, fees, and preparation for a VCAT hearing, visit the Victorian Civil and Administrative Tribunal website, vcat.vic.gov.au
MHOA is currently advocating to the Victorian Government for an Ombudsman to act in dispute resolution, specifically for homeowners in land-lease situations that come under the Residential Tenancies Act 1997 (Part 4A).
