Guide to the Mobile Homes Act 2013
On 26 March 2013 the Government passed a new law (the Mobile Homes Act 2013) which is designed to give greater protection to occupiers of residential mobile (park) homes.
Most of these new changes will come into force on 26 May 2013, with others following at a later date. All owners and residents of residential sites need to be aware of the new changes so they can make sure they comply.
Changes to Site Licensing (came into force on 1 April 2014)
Some of the most important changes in the new Act deal with the site licences issued to park owners by local authorities.
- For the first time, local authorities may charge the site owner a fee for applying for a site licence – whether a fee is payable, and if so how much, will be decided by the authority in question;
- As well as an application fee, local authorities are now allowed to charge park owners an annual fee for the site licence – the level of this fee will depend on various factors. Failure to pay the annual fee may eventually lead to the site licence being revoked;
- Local authorities in England have been given the power to refuse to grant a site licence where it considers that the applicant is unsuitable to hold a licence. There is currently no guidance on what factors a local authority can apply when making this decision, although regulations may be published in the future;
- The Act gives Parliament the ability to introduce a “fit and proper person” test for park owners and managers – this test will not apply immediately, but may be introduced in the future if it is considered appropriate.
Breach of Site Licence Conditions by Park Owner (came into force on 1 April 2014)
Local authorities have been given new powers to enforce site licence conditions against park owners. If a park owner is in breach of any of its site licence conditions the local authority may serve a “Compliance Notice” on the park owner. This Notice will:
- Set out the breaches which have been identified;
- Tell the park owner what he must do to correct the breaches;
- Tell the park owner when he must correct the breaches; and
- Explain how the park owner may appeal against the Notice.
Failure to comply with a Compliance Notice is a criminal offence, punishable by a fine of up to £5,000 in the Magistrates’ Court (level 5). A third or subsequent prosecution could lead to revocation of the site licence. If the park owner still fails to comply with the Compliance Notice after being prosecuted, the local authority may go onto the park and carry out the work needed to comply with the Notice. It may then charge the park owner for the cost of this work. The local authority may charge the park owner for the cost of preparing the Compliance Notice, including any expert or legal advice taken by the local authority. Any charges which are not paid within the required period will be attached to the park owner’s land, similar to a mortgage.
The park owner may appeal to the First Tier Tribunal (“FTT”) within 21 days against a Compliance Notice or any demand for payment by the local authority.
Changes to Sales/Gifting of Park Homes (came into force on 26 May 2013)
One of the main concerns raised by Parliament before the new Act was the issue of “sale blocking” by some park owners, where occupiers were effectively being prevented from selling their homes. The new Act has made some key changes to the procedure that must be followed whenever a park home is sold or gifted on a park on or after 26 May 2013, which are as follows:
Assignment of Existing Occupation Agreements
Where the occupation agreement being assigned commenced before 26 May 2013, and has not been assigned since 26 May 2013, the occupier must serve notice on the park owner that he/she proposes to sell or gift the mobile home, and to assign the occupation agreement, to the person(s) named in the notice.
If the park owner wishes to object to the proposed sale/gift and assignment he must (i) serve a notice (a “Refusal Notice”) on the occupier, and (ii) apply to the FFT for an Order preventing the occupier from selling the home and assigning the agreement to the prospective buyer (a “Refusal Order”). Both steps must be taken within 21 days from the date when the park owner receives notice from the occupier, otherwise the sale/gift and assignment will be deemed to be approved.
There are only very limited grounds for seeking a Refusal Order, which will be set out in Regulations which are to be published shortly.
The Refusal Notice must be served in the prescribed form and contain the information required under the Act – if it does not, it will be invalid.
The form and contents of a Refusal Notice will also be published in the Regulations.
Assignment of New Occupation Agreements
Where the occupation agreement being assigned commenced after 26 May 2013, or has been assigned since 26 May 2013, it is regarded as a “new agreement”. The occupier may sell or gift the mobile home, and assign the agreement, without the approval of the park owner. The new occupier must notify the park owner of the sale and assignment as soon as possible after completion of the sale/gift.
In either case, a gift of the home can still only be made to a member of the existing occupier’s family – the occupier must provide evidence of this to the park owner.
Payment of Commission
It is important to note that for all sales which take place after 26 May 2013 the new buyer (rather than the seller) is responsible for paying the commission on the sale to the park owner.
The Act also imposes a number of strict obligations on both the selling occupier and the new buyer, requiring them to provide certain information to each other and to the park owner. As a result, the sale/assignment procedure will become much more complex than before. We would recommend that all prospective buyers and sellers of park homes take specialist legal advice before completing, to ensure that they have complied with all these new requirements.
Changes to Park Rules
Under the new Act all existing park rules will cease to be effective from 3 February 2015.
Changes to Pitch Fees
The final major change introduced by the 2013 Act is an amendment to the implied terms relating to the annual pitch fee review procedure on parks. Previously, there was a presumption that pitch fees would change each year in line with the change in the Retail Prices Index (“RPI”) since the last review date. Although this remains the same in most cases, it is important to note the following changes:
- The annual pitch fee review notice sent to all residents on the park must be accompanied by a document in a prescribed form, setting out certain information;
- If this information is not given, the pitch fee review notice will be invalid;
- If the park owner serves an invalid notice, the FFT may order it to repay any overpaid pitch fees to the occupiers;
- On a pitch fee review the FFT may take into account (on one occasion only) any deterioration of the site, or of any adjoining land owned or controlled by the park owner, since 26 May 2013. The FFT will also be able to have regard to any decrease in the services provided to the park as a whole, not just to the occupier’s pitch, which has occurred since 26 May 2013;
- The presumption that pitch fees will increase in line with RPI will apply unless this would be considered unreasonable having regard to all the relevant factors.
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