Selling caravans and RVs

If you are a business selling caravans or recreational vehicles (RVs) in Queensland, you must abide by the Australian Consumer Law (ACL), which exists to create a fair and safe marketplace. You must also abide by any statutory warranties, manufacturer warranties, or other warranties you may make.

If you sell RVs, you may have several different warranties that apply to one vehicle, or only part of a vehicle under warranty. It is your responsibility to be clear about your obligations and ensure you honour any warranties that apply.

If you sell used caravans or RVs, you must be licensed as a motor dealer and abide by the relevant Queensland motor dealing laws.

ACL obligations

Several sections of the ACL apply to caravan and RV businesses, and it is important you and your staff understand your obligations.

Some key rules you must be aware of include:

• consumer guarantees
• false and misleading representations
• lay-by agreements (you may be entering into one without realising it).

For more information about your ACL obligations, you can access our ACL guides for businesses and legal practitioners or order copies.

Selling used caravans or RVs

If you buy or sell used caravans or RVs in Queensland, you must be licensed as a motor dealer under the Motor Dealers and Chattel Auctioneers Act 2014 (MDCAA) and comply with the Motor Dealers and Chattel Auctioneers Regulation (MDCAR).

In certain circumstances, you must also comply with the Agents Financial Administrations Act 2014 (AFAA) and Agents Financial Administration Regulation 2014 (AFAR).

These laws specify:

• the rules you must follow when trading second-hand caravans and RVs
• the approved forms that must be used for all sales and transactions
• how to handle any money you receive for consignment sales.

Dealers selling trade-ins and other second-hand caravans and RVs without the correct licence and without using the correct forms can be prosecuted.

If you sell on consignment

If you sell caravans or RVs on consignment, there are some extra rules you need to consider.

Before you provide consignment services to a customer, they must appoint you using an appointment of a motor dealer or chattel auctioneer form (form 9).

If you are not appointed correctly, you will not be entitled to commission or fees for the sale, and you may face legal penalties.

Trust accounts

If you sell caravans or RVs on consignment, any money you receive for them must be placed in a trust account that you hold, or in your solicitor’s trust account (if previously arranged).

If you choose to have your own trust account, you must deposit all payments from consignment sales directly into that account and provide a trust account receipt to the buyer.

Once the sale is finalised, you must withdraw the funds and pay the client and any other relevant party their share of the proceeds. You can only withdraw your commission after making these payments.

You must never withdraw money from your trust account before the relevant transaction has been finalised.

Misuse of trust money and other breaches of the AFAA are severe and can attract significant fines and prison time. You may also be prosecuted under the Criminal Code Act 1899.

For help complying with the law around handling trust money, you can download the trust accounts guide or order a copy.

To reduce the risk of your business breaching the law, you should ensure your staff know the legal obligations around selling used caravans and managing trust accounts.

Types of warranties and what they cover

A warranty is a voluntary promise you offer to your customer. Once the caravan or RV is purchased, the warranty becomes a right that can be enforced under the ACL.

Warranties are separate from the ACL’s automatic consumer guarantees. These apply regardless of any warranties you offer customers, and they apply for a reasonable time. This means consumer guarantees may continue to apply after the warranty has expired.

Depending on the type and value of caravan or RV you are selling, your warranty obligations will vary.

Following are details on types of warranties and what must be provided for the customer.

Statutory warranty

Statutory warranties are compulsory for all second-hand vehicles sold in Queensland.

How long the statutory warranty must be will depend on the age of the vehicle and/or the number of kilometres it has travelled.

Common warranty

Businesses sometimes make extra promises or representations (verbally or in writing) about the quality or standard of a good. For example, they may refer to:

• the quality, state, condition, performance or characteristics of the caravan or RV
• what the caravan or RV can do and for how long
• the availability of servicing, supply of parts or identical goods.

If you provide a common warranty, under the ACL consumer guarantees you must comply with the details of the warranty. If you do not, your customer will have rights under the consumer guarantees.

Manufacturer’s warranty (or warranty against defects)

A manufacturer’s warranty is a further promise to the customer that if the caravan or RV (or part of it) fails or becomes defective within a certain period, it will be repaired, replaced, resupplied, or the business will provide compensation to the consumer.

If your business does not comply with the offers in the warranty against defects, the customer may take legal action against you under the ACL or for breaching the contract.

Between the ACL and warranties, Australian consumers are well protected against defective products.

Remember, you don’t have to provide a formal warranty document. Any material with writing on it could be evidence of a warranty against defects. For example, the wording on packaging becomes a warranty if it contains promises about the product.

Just like a common warranty, a manufacturer’s warranty does not limit or replace the ACL consumer guarantees.

If you offer a warranty against defects, you must ensure it is easy to read and includes:

• name, business address, phone number and email address of the person or business giving the warranty
• what the customer must do to make a claim under the warranty
• what your business must do to honour a claim from the customer
• a statement that the warranty is given in addition to consumer guarantees and cannot exclude them.

Extended warranties or care packages

Some retailers offer extended warranties or care packages to extend the length of the manufacturer’s warranty.

Remember that this type of warranty is optional and you should take care when promoting to customers, because you risk breaching the ACL if:

• unfair tactics or undue pressure are put on the customer to encourage them make a to purchase
• you mislead the customer by stating they receive additional guarantees under this type of warranty. Remember consumer guarantees automatically apply, regardless of what you say the warranty offers.

Mixed warranties

While you don’t need to provide a statutory warranty for used caravans and the body and contents of motorhomes, the ‘car’ portion is classed as a motor vehicle. This may mean you need to provide a statutory warranty for the car component as per the used car rules specified in MDCAA.

If a manufacturer’s warranty for the body has not yet expired, it may still apply separately to the car portion’s statutory warranty.

Resolving consumer complaints

The most common complaints the Office of Fair Trading receives against caravan sellers relate to:

• caravans not being acceptable quality
• warranty conditions
• misrepresentations made to buyers about caravans, caravan products and related services
• non-supply or delayed supply.

To help resolve consumer complaints, you should develop and implement an effective consumer complaint handling policy if you haven’t already.

Quickly and effectively responding to complaints and showing a willingness to fix issues will help you resolve most complaints.