Andrew Arden QC and Andrew Dymond review recent English and Welsh consultations on various aspects of park homes legislation.
The Department for Communities and Local Government (DCLG) and the Welsh government are both currently consulting on the legislation governing mobile homes.1Review of park homes legislation – part 1 (DCLG, April 2017) and The park homes commission rate (Welsh government, May 2017).
Each consultation document uses the term ‘park homes’. This is not a statutory term but is used to describe mobile homes owned by the residents (rather than the site owner) stationed on sites licensed by local authorities under either the Caravan Sites and Control of Development Act (CSCDA) 1960 (in England) or Mobile Homes (Wales) Act (MH(W)A) 2013 Pt 2. Accordingly, neither consultation paper considers the position of Gypsies and Travellers on local authority or privately-owned sites.
At a time of acute housing shortage, park homes are a significant source of permanent accommodation.
At a time of acute housing shortage, park homes are a significant source of permanent accommodation. According to the consultation papers, there are around 85,000 homes in England on 2,000 sites; in Wales, some 3,400 households are accommodated on 100 sites. Many sites are located in attractive areas and provide good amenities for residents (commonly shared with homes on the site used by holiday-makers), but this remains a part of the housing sector in which many occupiers feel exploited. Having spent a considerable sum on the mobile home, they often find themselves faced with large service charge bills and discover that, when they come to sell, they do not obtain its full value.
Regrettably, the consultation in England does not consider simplification of the existing law. In contrast with Wales, where the relevant law is all to be found in the MH(W)A 2013, in England, licensing of sites by local authorities, which is the principal means of controlling conditions on sites, is under the CSCDA 1960; protection from harassment and eviction are governed by Caravan Sites Act (CSA) 1968 Pt 1; and the terms of agreement between a site owner and an occupier are controlled by the Mobile Homes Act (MHA) 1983. The English consultation is instead confined to three issues: (i) fairness of charges; (ii) transparency of ownership; and (iii) harassment. The Welsh consultation is only concerned with commissions paid by purchasers.
In relation to the first issue, the consultation paper invites views regarding both pitch fees and service charges. A ‘pitch fee’ is the amount which the occupier is required to pay ‘for the right to station the mobile home on the pitch and for use of the common areas of the protected site2In England, a protected site is one for which a site licence is required under CSCDA 1960 (or which would be required if not a local authority site): MHA 1983 s5(1) incorporating CSA 1968 s1(2); in Wales, MH(W)A 2013 s2(1), referring to a site licence required under its s5.
and their maintenance, but does not include amounts due in respect of gas, electricity, water and sewerage or other services, unless the agreement expressly provides that the pitch fee includes such amounts’.3MHA 1983 Sch 1 Pt 1 Ch 2 para 29; MH(W)A 2013 s62.
In general terms, the amount of the pitch fee may be reviewed annually4MHA 1983 Sch 1 Pt 1 Ch 2 para 17; MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 17.
and, if no agreement is reached between the parties, the amount of any increase can be determined by the First-tier Tribunal (in England) or the leasehold valuation tribunal (in Wales). In England, there is a presumption that any increase will be in line with the retail price index (RPI) and one of the issues on which the DCLG is consulting is whether this should be changed to the consumer price index (CPI) (as is currently the case in Wales), which would be more favourable to the occupier.5MHA 1983 Sch 1 Pt 1 Ch 2 para 20(A1); MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 20.
The tribunal has a broad discretion, however, to override this presumption of an increase in line with RPI or CPI, if the increase would be unreasonable having ‘particular regard’ to:
(a) the site owner’s expenditure since the last review date on improvements which –
(i) are for the benefit of the occupiers;
(ii) were the subject of consultation;6Before carrying out improvements to a site, the site owner must consult the owner-occupiers and in doing so must describe the improvements, explaining their benefit and how they may affect pitch fees on the next review: MHA 1983 Sch 1 Pt 1 Ch 2 para 22(e); MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 22(1)(e).
(iii) to which a majority of the occupiers did not object in writing or which, in the case of such objection, are improvements that the tribunal orders should nevertheless be taken into account;
(b) any deterioration in the condition, and any decrease in the amenity, of the site or adjoining land occupied or controlled by the owner;
(c) any reduction or deterioration in the services provided by the site owner; and
(d) any decrease in the amenity of the protected site since the last review date.7MHA 1983 Sch 1 Pt 1 Ch 2 para 18; MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 18.
The DCLG seeks views as to whether the First-tier Tribunal’s broad discretion to override the presumption should be retained or whether it should be limited to specific factors listed above.
As noted above, the pitch fee includes the site owner’s cost of maintenance of ‘common areas’ (a term not defined in the legislation) and can, but need not, include utility costs. Many occupiers face significant bills and the DCLG is seeking evidence on costs and services for which occupiers are being charged. One of the issues not specifically raised is what ‘common areas’ means; it is hoped that responses to the consultation will prompt the government towards greater clarity as to what may and may not be included in a pitch fee and what may form part of a service charge to provide a uniform approach across the sector.
Transparency of ownership
The second issue on which the DCLG is consulting is particularly troubling. It has received reports of some sites having complex ownership and management structures, commonly involving parts of the site being transferred to third parties, making it difficult for local authorities to enforce licence conditions. It is hoped that such artificial arrangements will be addressed by legislation so that site owners cannot avoid their responsibilities to occupiers.
The final issue in the DCLG’s consultation is harassment. The paper states that local authorities have found it difficult to prosecute. CSA 1968 s3 creates offences of unlawful eviction and harassment, which are closely modelled on the offences against residential occupiers in Protection from Eviction Act 1977 ss1 and 3. It appears, however, that the complaints to the DCLG have not concerned unlawful eviction or threats of violence but more subtle forms of harassment, eg, repeated inspections of pitches.
This raises a difficult issue. The occupier is entitled to quiet enjoyment of both mobile home and pitch.8MHA 1983 Sch 1 Pt 1 Ch 2 para 11; MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 15.
The right of quiet enjoyment is, however, subject to the site owner’s rights of entry for: (i) delivery of post and notices (between 9 am and 6 pm); (ii) reading utility meters (between 9 am and 6 pm); (iii) carrying out essential repairs or emergency works (on reasonable notice); and (iv) any other reason for which the contract between the parties allows the site owner to enter, provided that the occupier is given at least 14 days’ written notice.9MHA 1983 Sch 1 Pt 1 Ch 2 paras 12–15; MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 16.
This should provide residents with sufficient protection but if site owners are using their rights as an opportunity to intimidate occupiers, local authorities could consider prosecuting under Protection from Harassment Act 1997 ss1 and 2 rather than the CSA 1968. It may be, however, that further restriction of rights of entry is desirable.
The Welsh government’s consultation solely concerns the commission paid to site owners on the sale of a mobile home. Throughout the UK, the amount of commission that may be charged by site owners is limited to 10 per cent of the purchase price.10Mobile Homes (Commissions) Order 1983 SI No 748.
What this means in practice is that the amount that the seller receives from the purchase is reduced to take account of the commission. It is difficult to understand the justification for commission. Under the terms implied into any park home agreement, the mobile home owner is obliged to repair the mobile home and keep his/her pitch in a clean and tidy condition.11MHA 1983 Sch 1 Pt 1 Ch 2 para 21; MH(W)A 2013 Sch 2 Pt 1 Ch 2 para 21.
The site owner charges pitch fees to the occupier and can charge for utilities and services. The Welsh government is plainly right to be seeking views on these payments; it is unfortunate that the issue is not part of the consultation in England.
The fact that both the DCLG and the Welsh government are looking at the law governing park homes is to be welcomed but the limited ambit of both consultations is disappointing.
The fact that both the DCLG and the Welsh government are looking at the law governing park homes is to be welcomed but the limited ambit of both consultations is disappointing. In particular, it is surprising that no attention has been paid to security of tenure. The site owner can apply to the county court for an order terminating the occupier’s agreement but such an application can also be made to the First-tier Tribunal (England) or the leasehold valuation tribunal (Wales). In practice, the site owner will usually apply to the tribunal where legal aid will not be available to the occupier. Although the order terminating the agreement will still have to be enforced through the county court,12CSA 1968 s3(1)(b); MH(W)A 2013 s42(1) and (3).
by this stage the tribunal will already have decided whether one of the grounds for termination13The three grounds are that: (i) the occupier has breached the residential contract; (ii) the occupier is not living in the mobile home as his/her only or main residence; and (iii) the mobile home is having a detrimental effect on the amenity of the site (MHA 1983 Sch 1 Pt 1 Ch 2 paras 4–5A; MH(W)A 2013 Sch 2 Pt 1 Ch 2 paras 4–7).
is made out and, if so, whether it is reasonable for the agreement to be terminated.
In addition, surely it is time for the 12-month limit on suspension of a possession order14CSA 1968 s4; MH(W)A 2013 s44.
to be revisited. Given that the mobile home is a significant investment for an occupier and the difficulty that s/he will inevitably find in locating an alternative pitch, surely there are cases in which lengthier periods of suspension will be appropriate.