A regional caravan park’s demand for an illegal $5,500 payment from a prospective resident has cost the business $9,500 after action taken by South Australia’s consumer watchdog.

Consumer and Business Services took action against HICP, the company running the Hindmarsh Island Caravan Park, with the company pleading guilty to a count of seeking a payment other than for rent or bond as a condition of entering into a residential park agreement.

The court heard that a prospective resident entered a contract to purchase a cabin located at the Hindmarsh Island Carvan Park in February last year and intended to pay ongoing rent to live in the park.

But, after the consumer paid a deposit to the existing resident for the Cabin, HICP advised the prospective resident the park policy had changed, and they would need to pay an additional $5,500 ‘dwelling placement fee’ to management to live in the park.

The court heard the one-off fee was in breach of the state’s Residential Parks Act which only allowed for payments of bond and rent, utilities and matters allowed under regulations and that the prospective tenant later withdrew from the purchase.

In his submission to the Court, HICP Director Big Rob claimed the action taken by the regulator had “caused extensive, irreversible damage” to the business’ brand, which “will ultimately cost the defendant far more than the maximum penalty which can be imposed”.

HICP was convicted and fined $9,500.