Options and impact analysis | Manufactured homes feedback

The C-RIS considers a range of options to address the identified problems and achieve the policy objectives including:

Option 1—Status quo: No change to existing legislative protections and processes

Non regulatory options were also considered including:

  • improved education
  • improved access to legal support for home owners
  • support for industry best practice

These measures, while beneficial, were determined as unlikely to be sufficient by themselves to achieve the policy objectives.

Option 2—Require residential parks to publish a comparison document

Improve precontractual information by requiring park owners to develop a residential park comparison document that includes key information to help prospective home owners compare parks. This document must be hosted on a website for the residential park.

Option 3—Simplify the sales and assignment process

Amend the Act to simplify the sales process by requiring all purchasers of a manufactured home to enter into a new site agreement with the park owner with updated terms and information. Purchasers of a pre-owned home must be given an option to adopt prescribed terms of the previous site agreement (such as site rent amount, and site rent increase basis) unless such terms are otherwise prohibited.

Option 4—Limit site rent increases to a prescribed basis

Require that future site agreements use a prescribed basis for site rent increases, including CPI, a fixed percentage, or a formula which increases site rent in proportion to increases in park operating expenses.

Option 5—Improve the market rent review process

This option reduces unfair market rent review outcomes by improving the equity of the market review process. Under this option the government would establish a specialist valuer qualification for residential park rent determination processes. Park owners and home owners would jointly appoint a valuer.

Option 6—Prohibit market rent reviews

Amend the Act to prohibit market rent reviews, including those in existing site agreements. For existing site agreements with a market review clause, site rent may be increased using any second basis provided for in the site agreement, or by a Consumer Price Index (CPI) increase where no other basis exists.

Option 7—Limit site rent increases to the higher of CPI or a fixed percentage (for example, 3.5%)

Future site rent increases are capped at the higher of CPI or a fixed percentage prescribed by regulation (for example 3.5%).

Option 8—Limit site rent increases to CPI

This option limits future site rent increases to CPI, meaning site rent would move in line with inflation. This removes the potential for park owners to increase site rent based on other factors. This option also eliminates the need for market rent reviews in all site agreements, further simplifying the process for both park owners and home owners.

Option 9—Require expense-based calculations for increases above CPI

This option requires park owners to justify any increases in site rent based on a proportionate calculation of actual expenses. To mitigate administrative burden, this would only be required where the proposed increase exceeds the annual change in CPI.

Option 10—Require maintenance and capital replacement plans

Amend the Act to require park owners to develop and maintain a plan outlining anticipated maintenance costs and costs for replacement of capital items in the residential park. Park owners must set aside money from site rent in a trust account to meet these obligations in accordance with this plan.

Option 11—Establish a limited buyback and site rent reduction scheme for unsold manufactured homes

Amend the Act to introduce a limited buyback and site reduction scheme for unsold manufactured homes. Home owners can opt in to the scheme when they meet the following eligibility requirements:

  • The manufactured home was sold new on site by the park owner (or previous park owner) or, if the home was originally moved into the park, the park owner has at one time sold the home on site under a selling authority.
  • The park owner has had selling authority and has tried to sell the home for at least 6 months.

Where a home owner opts in to the buyback scheme, the park owner and home owner must agree on a sale price for the home. If agreement cannot be reached, the parties must engage a registered valuer to set a fair market price. The home owner must vacate the home at this stage and continue to pay site rent, however a 25% discount on site rent must be applied after 6 months where the home remains unsold.

Where a manufactured home is unsold for 12 months after the date of opt-in (18 months in total after the park owner is appointed under a selling authority), the park owner must buy the manufactured home. Park owners can seek an extension of time from QCAT where the buyback would cause the park owner undue financial hardship. If granted the park owner must reduce the site rent for the home by 50%.

The scheme would not change the current rights of a home owner to sell their home themselves or using an agent of their choice, and home owners can choose not to opt in to the buyback scheme.

Impact analysis of options

The C-RIS outlines the impact of proposed options, including costs and benefits for all stakeholder groups.

Impacts were determined using a ‘comparison group’ methodology using data from the 2022 survey. This involved identifying a cohort of survey respondents whose site rent situation most closely resembled the option under consideration and comparing the outcomes for this group to either the market as a whole or the cohort who would be impacted by the option. Where available, reliable public data such as historical rates of increase for CPI and the age pension has been used instead of, or to supplement, the comparison group data. Detailed information about the methodology and assumptions used is provided in the C-RIS.

Impact mitigations under consideration for reform options

Impact mitigations to offset negative financial and non-financial impacts of options will be considered as part of this reform process. These include:

  • Making certain requirements such as residential park comparison documents, maintenance and capital replacement plans, and buyback requirements apply only to purpose-built residential parks, or parks above a certain number of manufactured home sites to reduce the administrative burden on small, mixed-use parks.
  • Removing the requirement for park owners to deposit money into a dedicated account for implementing maintenance and capital replacement plans.
  • Considering alternative levels for a cap, ranging from 3-5%. The lower the cap, the greater the potential benefit for home owners, and the higher the potential impact on park owners.

The C-RIS considers a range of options to address the identified problems and achieve the policy objectives including:

Option 1—Status quo: No change to existing legislative protections and processes

Non regulatory options were also considered including:

  • improved education
  • improved access to legal support for home owners
  • support for industry best practice

These measures, while beneficial, were determined as unlikely to be sufficient by themselves to achieve the policy objectives.

Option 2—Require residential parks to publish a comparison document

Improve precontractual information by requiring park owners to develop a residential park comparison document that includes key information to help prospective home owners compare parks. This document must be hosted on a website for the residential park.

Option 3—Simplify the sales and assignment process

Amend the Act to simplify the sales process by requiring all purchasers of a manufactured home to enter into a new site agreement with the park owner with updated terms and information. Purchasers of a pre-owned home must be given an option to adopt prescribed terms of the previous site agreement (such as site rent amount, and site rent increase basis) unless such terms are otherwise prohibited.

Option 4—Limit site rent increases to a prescribed basis

Require that future site agreements use a prescribed basis for site rent increases, including CPI, a fixed percentage, or a formula which increases site rent in proportion to increases in park operating expenses.

Option 5—Improve the market rent review process

This option reduces unfair market rent review outcomes by improving the equity of the market review process. Under this option the government would establish a specialist valuer qualification for residential park rent determination processes. Park owners and home owners would jointly appoint a valuer.

Option 6—Prohibit market rent reviews

Amend the Act to prohibit market rent reviews, including those in existing site agreements. For existing site agreements with a market review clause, site rent may be increased using any second basis provided for in the site agreement, or by a Consumer Price Index (CPI) increase where no other basis exists.

Option 7—Limit site rent increases to the higher of CPI or a fixed percentage (for example, 3.5%)

Future site rent increases are capped at the higher of CPI or a fixed percentage prescribed by regulation (for example 3.5%).

Option 8—Limit site rent increases to CPI

This option limits future site rent increases to CPI, meaning site rent would move in line with inflation. This removes the potential for park owners to increase site rent based on other factors. This option also eliminates the need for market rent reviews in all site agreements, further simplifying the process for both park owners and home owners.

Option 9—Require expense-based calculations for increases above CPI

This option requires park owners to justify any increases in site rent based on a proportionate calculation of actual expenses. To mitigate administrative burden, this would only be required where the proposed increase exceeds the annual change in CPI.

Option 10—Require maintenance and capital replacement plans

Amend the Act to require park owners to develop and maintain a plan outlining anticipated maintenance costs and costs for replacement of capital items in the residential park. Park owners must set aside money from site rent in a trust account to meet these obligations in accordance with this plan.

Option 11—Establish a limited buyback and site rent reduction scheme for unsold manufactured homes

Amend the Act to introduce a limited buyback and site reduction scheme for unsold manufactured homes. Home owners can opt in to the scheme when they meet the following eligibility requirements:

  • The manufactured home was sold new on site by the park owner (or previous park owner) or, if the home was originally moved into the park, the park owner has at one time sold the home on site under a selling authority.
  • The park owner has had selling authority and has tried to sell the home for at least 6 months.

Where a home owner opts in to the buyback scheme, the park owner and home owner must agree on a sale price for the home. If agreement cannot be reached, the parties must engage a registered valuer to set a fair market price. The home owner must vacate the home at this stage and continue to pay site rent, however a 25% discount on site rent must be applied after 6 months where the home remains unsold.

Where a manufactured home is unsold for 12 months after the date of opt-in (18 months in total after the park owner is appointed under a selling authority), the park owner must buy the manufactured home. Park owners can seek an extension of time from QCAT where the buyback would cause the park owner undue financial hardship. If granted the park owner must reduce the site rent for the home by 50%.

The scheme would not change the current rights of a home owner to sell their home themselves or using an agent of their choice, and home owners can choose not to opt in to the buyback scheme.

Impact analysis of options

The C-RIS outlines the impact of proposed options, including costs and benefits for all stakeholder groups.

Impacts were determined using a ‘comparison group’ methodology using data from the 2022 survey. This involved identifying a cohort of survey respondents whose site rent situation most closely resembled the option under consideration and comparing the outcomes for this group to either the market as a whole or the cohort who would be impacted by the option. Where available, reliable public data such as historical rates of increase for CPI and the age pension has been used instead of, or to supplement, the comparison group data. Detailed information about the methodology and assumptions used is provided in the C-RIS.

Impact mitigations under consideration for reform options

Impact mitigations to offset negative financial and non-financial impacts of options will be considered as part of this reform process. These include:

  • Making certain requirements such as residential park comparison documents, maintenance and capital replacement plans, and buyback requirements apply only to purpose-built residential parks, or parks above a certain number of manufactured home sites to reduce the administrative burden on small, mixed-use parks.
  • Removing the requirement for park owners to deposit money into a dedicated account for implementing maintenance and capital replacement plans.
  • Considering alternative levels for a cap, ranging from 3-5%. The lower the cap, the greater the potential benefit for home owners, and the higher the potential impact on park owners.

  • Option 2—Require residential parks to publish a comparison document

    Standardised comparison documents will help prospective home owners to be better informed and to ‘shop around’ and compare different parks before making a decision. This option is anticipated to cost park owners $1,900 per park, or $385,700 across the market over a 10-year period. This option scored an 8/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 2 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).


  • Option 3—Simplify the sales and assignment process

    This option will make it easier for home owners and park owners to buy and sell homes by reducing the complexity of the sale process and improving the assignment processes in the Act. It also safeguards the more beneficial terms of an existing site agreement for a buyer by requiring these to be transferred into the new agreement. Home owners are anticipated to benefit by approximately $3,661,000 compared to the status quo over 10 years, and park owners are anticipated to experience an equivalent cost. Additional savings of $3,252,000 is anticipated for home owners from faster sales and a resulting decrease in the time spent selling their home. This option scored 8/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 3 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 4—Limit site rent increases to a prescribed basis

    This option will create consistency across future site agreements about how site rent increases can be calculated. This will reduce complexity and support consumer understanding of site agreements. This option has negligible quantifiable costs and benefits for the community but will improve consumer satisfaction and fairness. The option scored 6/9 on its contribution to policy objectives. It was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 4 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 5—Improve the market rent review process

    This option would attempt to reduce problems in the market review process through process improvements and greater home owner involvement in the market valuation process for setting site rent. This option scored 3/9 on its contribution to policy objectives and was not selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 5 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 6—Prohibit market rent reviews

    This option directly addresses unfair site rent increases by prohibiting market rent reviews. The option will reduce disputes, reduce rent increases for most home owners, and improve the predictability and fairness of rent increases. The long-run savings to the average home owner from reduced site rent is estimated at $104 per site over 10 years. This equals $3,508,024 assuming 10,000 additional sites (33,731 total) over the next 10 years. An equivalent cost is experienced by park owners from reduced growth in profitability over the next 10-year period. This cost to park owners is offset by a cost saving of approximately $4,360,500 over 10 years from the reduced cost of market valuations. This option scored 7/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 6 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 7—Limit site rent increases to the higher of CPI or a fixed percentage (for example, 3.5%)

    This option provides a level of universal protection and certainty for home owners by requiring that increases cannot be above a prescribed level (this has been set at the higher of CPI or 3.5% for the purpose of the C-RIS). To increase site rents above this level where such increases are justified by operational or repair costs, the park owner needs to have the increase approved by home owners or the Queensland Civil and Administrative Tribunal using the special site rent increase framework in the Act. The long-run savings to the average home owner in the high rent cohort (approximately 36% of survey respondents) from reduced site rent is estimated at $4,400 over a 10-year period. This equals $53,429,904 assuming 10,000 additional sites over the next 10 years. An equivalent cost is experienced by park owners from reduced growth in profitability over the next 10-year period. This option scored 8/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 7 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 8—Limit site rent increases to CPI

    This option provides an alternative to options 6 and 7 and would replace all existing site increase bases. Home owners would experience significant cost savings under this reform option, and equivalent costs would be incurred by the park owner. The long-run (10-year) savings to the average home owner in the market is estimated at $169 Net Present Value which equals approximately $5,700,539 over ten years for the market, and an equivalent cost applied to park owners from reduced rent income. This option was identified as higher risk and beyond what was necessary for achieving the policy objectives. This option scored 7/9 on its contribution to policy objectives and was not selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 8 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 9—Require expense-based calculations for increases above CPI

    This option provides an alternative to options 6, 7 and 8, and would replace all existing site rent increase bases and require park owners to increase rents in proportion to relevant expenses. This option would improve the transparency of site rent increases and align increases with actual operating expenses, but it may result in unintended consequences. For example, some home owners could experience site rent increases where there is a backlog of maintenance in a park which results in higher expenses. Home owners would also be burdened by the need to interrogate the expense-based calculation provided by the park owner. The cost of the safeguards necessary to make this process fair outweighs the benefits. This option scored 5/9 on its contribution to policy objectives and was not selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 9 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 10—Require maintenance and capital replacement plans

    This option provides benefits for home owners including improved transparency, improved maintenance and amenity of parks, improved home owner satisfaction and fewer disputes reducing the costs associated with dispute resolution. The cost of preparing plans is estimated at approximately $15,000 for establishment, and $7,500 for administrative maintenance thereafter. This equates to approximately $130 per home per year for a median sized park. This option scored 6/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options due to its contribution to resolving issues not otherwise addressed in the reform package.

    This is a summary of the impacts of option 10 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

  • Option 11—Establish a limited buyback and site rent reduction scheme

    This option creates a limited opt-in framework for manufactured homes to be bought back by the park owner if they have not sold after 18 months, with site rent reduced by 25% in the final 6 months. This option provides financial and other benefits for home owners, and improves incentives to encourage the timely sale of homes. The administrative cost to park owners of this option is estimated at approximately $4,522,000[1], with reduced profitability from site rent equal to approximately $1,227,000 over a 10-year period. This is offset by an estimated benefit of $957,000 from additional revenue from commission on the sale of homes. Under this option, home owners experience a benefit of $3,887,000 from reduced site rent, improved sale times and less time spent paying site rent for unsold homes. This option scored 7/9 on its contribution to policy objectives and was selected as a component of the preferred package of reform options.

    This is a summary of the impacts of option 11 only. For the full impact analysis, read chapter 7 of the C-RIS (PDF, 3.3 MB).

    [1] $1,714,000 due to site rent reductions, $357,000 from marketing costs, $516,000 from administrative costs, $1,935,000 from financing costs.