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Park Home: What have I actually inherited?

Park Home: What have I actually inherited?

Park Home: What have I actually inherited?

When administering an estate which comprises of a residential park home, we are often asked whether, and to what extent, the beneficiary inherits the exact same rights and interests as the deceased had before he/she died. This article will explore this question and sets out the main points to be aware of if you own a park home and are planning to make a will, or if you are a beneficiary of an estate which includes a park home.

The principal legislation which governs the relationship between the site owner (“the Owner”) who owns the land upon which the park home is stationed, and the occupier/owner of the park home itself (“the Occupier”) is the Mobile Homes Act 1983 (as amended) (“the 1983 Act”).

The Pitch Agreement

A key feature of the 1983 Act is that there are two issues to consider, namely (i) the ownership of the park home itself (which is a chattel), and (ii) the right to station the park home and to occupy it as a residence (which is governed by the pitch agreement, a contract made between the Owner and the Occupier). It is this agreement (“the Agreement”) which confers legal rights and obligations on the Occupier, including the rights to keep the park home on the land, to live in it as their main residence and to sell or gift it, and the responsibility to pay the Owner the pitch fees and to keep the park home properly maintained.

Transferring occupation rights (by sale and by gift) during the Occupier’s lifetime

Under the 1983 Act, the Occupier has the legal right to sell their park home, and to assign the Agreement, to a prospective buyer. The Occupier may also gift the park home, and assign the Agreement, to a family member. The assignee must comply with the Occupier’s rights and responsibilities under the Agreement and must occupy the park home as their only or main residence.

The Occupier is not required to seek the Owner’s prior approval to a proposed sale or gift. The Owner is, however, entitled to object to the sale on certain limited grounds by applying to the First Tier Tribunal for a “Refusal Order” to prevent the proposed sale/gift and assignment. If such an application is made,  it will then be for the Tribunal to decide whether the objection is reasonable in all the circumstances.

In both cases, it is important to bear in mind that the sale/gift of the park home takes place at the same time as the assignment of the Agreement, so that the owner of the park home is always the same person as the lawful occupier under the Agreement.

The above options are subject to various conditions which are outside the scope of this article. This article is concerned with the position after the Occupier’s death, but for more information please contact a member of our Parks Homes Team.

The position on the Occupier’s death

Section 3 of the 1983 Act sets out what happens to the Agreement when the Occupier dies. It is important to bear in mind that the Agreement is intended to remain in place for the lifetime of the park home, and so will not end when the Occupier dies.

S3(3) Mobile Homes Act 1983 states that if the Occupier dies whilst they are still in occupation of the park home, then their rights and responsibilities under the Agreement will automatically pass to, and be binding, upon any surviving family member who was living in the park home with the Occupier at the date of their death, even if that family member was not named as a party to the Agreement..

If no qualifying family member was residing with the Occupier at the date of death, then the Occupier’s rights and responsibilities under the Agreement will pass to the person who is entitled to inherit the park home under the Occupier’s will or under the law of intestacy. However, this is subject to one key difference in that a beneficiary is not permitted either to move into the park home themselves, or to gift it to a family member. Instead, they should put the home up for sale on the open market and then assign the Agreement to the new buyer at the same time. Until the home is sold, the beneficiary will remain responsible for complying with the Agreement, including paying the pitch fees to the Owner and keeping the park home in good repair.

Problems can arise, however, where the ownership and occupation rights become separated. For example, A owns a park home and lives in it with his partner B. A is the sole named occupier under a Mobile Homes Act agreement with the park owner. A makes a Will, leaving the park home to C. A then dies, leaving B living in the park home.

Under the Act, B inherits the agreement (as a cohabiting family member), but C inherits the park home itself. This creates two problems, namely:

  1. B can continue to live in the park home (subject to paying the pitch fees, etc.) under the agreement, but cannot sell or gift the park home because B does not own it; and
  2. C legally owns the park home, but is unlikely to be able to sell it either, because C cannot lawfully remove B from occupation.

As a result, in most cases this situation will need to be resolved by an agreement between B and C under which one party will buy out the interest of the other, thus reuniting the ownership and occupation rights.

This issue was recently considered by the Upper Tribunal in the case of Barrs Residential & Leisure Limited v Pleass Thompson & Co [2020] UKUT 114 (LC). In that case, the owner of a park home died, but did not specify in his Will who was to inherit his park home – his estate was to be divided equally between all of his children, No family members were living with the deceased when he died. His son (who was one of the beneficiaries) agreed with the executors to buy the home from the estate for £30,000 and he and the executors signed a deed of variation to vary the Will to gift the home to him. The park owner challenged the validity of this. The son won at first instance, but the park owner appealed.

The Upper Tribunal held that although the son had become the lawful owner of the park home, he had no right to occupy it or to sell it on the park because the agreement had not been assigned to him and remained vested in the occupier’s estate. The Upper Tribunal ruled that the occupation rights and ownership rights were two distinct things. This is especially important because the majority of the value in a park home is the benefit of having an agreement which allows it to be kept on a pitch – without this, the home on its own has little or no real value.

As can be seen from this, it is important to seek specialist legal advice when making a Will when one of your assets is a residential park home.

Speak to our expert Park Homes experts today

For more information, or to discuss further, please contact our residential parks team today on 03456 381381 or email parks@ibblaw.co.uk.