All Topics / Creative Investing / permament site in caravan park

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  • Profile photo of sundirtwatersundirtwater
    Participant
    @sundirtwater
    Join Date: 2008
    Post Count: 25

    Hi guys,
    My first post.
    I'm investigating buying a caravan that has a permament "lease" in a caravan park (great location) for $20k, removing it and getting Council approval to build a new small cabin, live in for a few months (no CGT) and then sell. The park is near some high rise unit blocks and is in a prime location. The owners of the park only have a verbal agreement with the permaments ie. nothing in writing, so there is no security that the permanent lease is actually permanent and therefore whoever buys my cabin may have to move on without any notice if the owners sell out to a developer (making it insecure and not an attractive buy for someone). A couple of questions:
    i) Are park owners meant to have formalised lease agreements with permaments?
    ii) What are the limits upon a verbal agreement? ie is there an implied minimum time period they would have to give notice of?

    I called the Residential Tenancies Agency (in QLD) and they advised I seek a legal opinion because the arrangements are not the same as residential property owners & tenants.

    Profile photo of DaedalusDaedalus
    Member
    @daedalus
    Join Date: 2007
    Post Count: 140

    Hi,

    The only lease agreements I've seen in this area are for 'annual' use i.e. holiday usage. However, with those there is little security. You can be evicted pretty easily. With some they'll remove your van and charge you the removal cost.

    I don't know if this is different for permanents, but I suspect that you don't get much security for your site fees.

    My other comment is that a verbal agreement generally isn't worth the paper it's printed on

    I'd be interested in what you find out though…

    Daedalus.

    Profile photo of sundirtwatersundirtwater
    Participant
    @sundirtwater
    Join Date: 2008
    Post Count: 25
    Daedalus wrote:
    Hi,

    I'd be interested in what you find out though…

    Daedalus.

    Legal advice I received was that, unlike other areas of society, land arrangements MUST be in writing and therefore a verbal agreement to have a permament site means nothing….

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    SDW, think of caravan parks as a ground lease without a lease. What have you got? Nothing, should the caravan park operator sell subject to vacant possession. Many caravan parks are a mix of freehold and leasehold land sitting on either crown, council or railways land with clauses allowing various forms of usage eg camping but not structures, removable structures etc.

    There is generally no protection for permanent site holders, they own their cabin/improvements however it may not be practical to remove them (demolition is often the only option).

    If you are that keen, it has great views, improve it, use it, lease it out, claim your deductions and generally enjoy it (maybe sell it at the end of the day) but you will always be under the cloud of an off market transaction giving you 24 hours notice to vacate.

    When it comes to selling, you will need to check whether this can be done independently of the site managers – some parks require you to sell back to the site managers (who then keep all profits).

    SNM

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