Land lease communities (LLCs)

Land lease communities (LLCs), also known as ‘manufactured home estates’ and ‘resort communities’, are a relatively new concept. They are set up to offer affordable seniors housing.

The concept has grown out of the caravan park industry which has always had a mix of temporary and permanent residents.

Utilising the same legal structures, land lease communities offer a gated estate where you buy the physical structure of the home but rent the land that the home sits on. 

In most states, because of the caravan park heritage, your home is required to be manufactured off site, usually in a factory, and then trucked to its final location. They are still extremely high quality.

This arrangement has five significant benefits;

All operators of LLCs are private companies. In the last few years several have grown in size to allow them to list on the Australian Stock Exchange.

LLCs are increasingly popular because the newer communities provide high levels of resort style amenities, from swimming pools and tennis courts to parking for recreational vehicles, gymnasiums, hairdressers, cafes and club like facilities.

There are approaching 200 LLCs across Australia, which is a relatively small number but their popularity is growing rapidly. Unlike other retirement living options like retirement villages where it is hard to find approved land, there are over 2,000 caravan parks which can be converted to LLCs. 

LLCs  do not have the requirement to be age friendly. It is up to the individual operator and you the customer on how much age supportive design you build into your home.

While residents are typically younger, a number of LLC operators are introducing aged care facilities on adjacent land to support their ageing residents. But this is the exception rather than the rule.

You are free to have home care services delivered into your home subject to Federal Government ACAT assessments.

However the gated estate and supportive community found in an LLC, together with the operator’s management that keeps a friendly eye on your welfare is supportive of you ageing.

Because you rent the land you can obtain Centrelink financial support if you are a pensioner. The land rent also covers your contribution to the cost of operating the community; for instance the cost of lighting the streets and mowing the lawns.

You own your own house and therefore you are responsible for the cost of its maintenance – for example painting.

Most LLC homes are ‘affordable’. For instance a new two-bedroom home can be priced at $300,000. Some in Queensland however can be as high as $1 million.

In nearly all cases you will buy a new home from the operator of the LLC. They will have the best prices but they also want the village to have a common style and standard of build.

Also, in nearly all cases, you will buy a second hand home through the operator because they are on site and understand the real values. 

The weekly fees are controlled by the operator and they can vary the fees as they wish – there are minimal controls.

A few LLC operators also charge a departure fee, similar to retirement villages where it is called a Deferred Management Fee (DMF). This can be as high as 30% of the value of your home paid when you sell and move on.

Each operator is free to develop their own contract for the rent and rental agreement contract covering the land.

We strongly advise you to get legal advice as you will be placing your valuable home on their land with few options if you wish to depart.