What utility charges can I pass on to homeowners?
In a land lease community it is common for you to re-supply utilities to residential sites within the community. In these circumstances you may ask homeowners to pay directly for any or all of the following:
- sewerage - only if the local water supplier charges for this separately.
Home owners can be asked to pay for:
- usage charges - this varies depending on how much they use
- service availability charges – that is, as fixed amounts.
Before you can pass on utility charges two things need to happen:
- the use of the particular utility on the site must be separately measured or metered
- the home owner must have agreed to pay the particular charge under the terms of the site agreement. This now a standard term of the agreement.
If a site is not metered, and you want to charge for utilities, you must pay the cost of installing the meter.
If a home owner hasn’t been paying a utility charge and you want them to, you must give at least 14 days' written notice. There would need to be an agreed offset of the site fees. If you cannot agree, an application can be made to the NSW Civil and Administrative Tribunal.
Are there limits on the amounts charged?
Yes. You cannot charge a homeowner usage charges for utilities more than they would pay if they were a direct customer of the service provider. Check your local provider’s website to see what the standard rate for usage is.
With service availability charges, you cannot charge an individual homeowner any more than the actual amount you have been billed divided by the number of residential places, including holiday sites, in the community.
For electricity, the maximum service availability charge a homeowner can be asked to pay is the service availability charge that the homeowner would have to pay if they were a small customer on a standard retail contract of the applicable local area retailer. If electricity supplied the home owner’s site is less than 60 amps then a discount applies.
NCAT decision on charging of electricity in embedded networks at residential land lease communities
The NSW Civil and Administrative Tribunal ("the Tribunal") Appeal Panel made a decision on 3 April 2018 that will be of interest to both residents and operators of these communities.
The decision relates to the following case, "Reckless v Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park  NSWCATAP 80", which decided how residents can be charged for electricity under section 77 of the residential land lease community laws. A copy of the decision is available from: NSWCATAP 80
The Appeal Panel has also ordered that this matter be returned to the Consumer and Commercial Division of the Tribunal, to determine whether residents may be eligible for refunds on any electricity charges that they have already been paid.
Subsequently, the park owner (who is also the park operator) Silva Portfolios Pty Ltd, has appealed the Tribunal Appeal Panel decision to the NSW Supreme Court, and the matter is set to be heard on 17 August 2018. The Court has stayed both the Tribunal appeal decision and the return to the Tribunal of the issue of whether refunds may be due.
Fair Trading is currently assessing the impact of this decision in liaison with the stakeholders.
The maximum service availability charge a homeowner can be asked to pay for both water and sewerage service availability is $50 each calendar year.
What are my billing responsibilities?
You must provide an itemised account. This should set out what you are asking the homeowner to pay and how each amount has been calculated. You determine the frequency of the billing cycle.
How much time must I give to pay?
When you provide an itemised account, you must give the homeowner at least 21 days to pay the charges.
What receipts are required?
You must provide a receipt for any utility payments made in person. If payments are made by any other method, you only have to give a receipt if you are asked for one. A receipt for a utility payment must include:
- the name and address of the community
- the homeowner's name
- their site number
- the amount paid
- any amount in debit or credit as at the date of payment
- the period covered by the payment
- the date the payment was received.
What if the electricity supply is not up to standard?
If the electricity being supplied to a site by the operator is less than 60 amps, the following service availability charge discount applies:
Level of supply to site
Maximum service availability charge (SAC)
less than 20 amps
20% of relevant local area retailer’s SAC
50% of relevant local area retailer’s SAC
70% of relevant local area retailer’s SAC
Where 60 or more amps are capable of being supplied, a homeowner is required to pay the full service availability charge even if the home is not capable of receiving this amount of supply.
Can I charge late fees?
Yes. If a utility bill is not paid by the due date you can charge a late fee. Late fees cannot be more than the local utility provider would charge. Check the local supplier’s website to see what fees they charge for late payments.
What else can I do if homeowners do not pay utility bills?
In addition to, or instead of, charging late fees, you can apply to the Tribunal for an order. The Tribunal can make an order in these situations without a hearing, if both parties agree. This order can be enforced as a debt in the local court. Extra fees and charges could be added if it gets to this stage.
Can site fees be used to cover utility bills?
No. You cannot use money paid as site fees towards the payment of any other charges, including utilities.
Can I charge a fee for reading the meters?
You have the right to enter a site to inspect, read, service, repair or replace any meter but no fee can be charged.
How are disputes over utility bills settled?
If a homeowner has an issue with the amount they are being charged, they should discuss this with you in the first instance. Home owners have the right to ask you to provide them with reasonable access to bills and other documents that relate to their utility charges. If an agreement is reached you may:
- refund the overpayment directly, or
- allow the homeowner to deduct the amount from their site fees.
If you cannot agree, apply to the Tribunal for an order to resolve the dispute.