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Clearing up the confusion

Clearing up the confusionAlan Savory (pictured) of the Independent Park Home Advisory Service has been receiving a number of questions from residents who have found the amended Implied Term 18 (1A) in the forthcoming Mobile Homes Act 2013 confusing.  

That Implied Term states that ‘no regard shall be had, when determining the amount of the new pitch fee, to any costs incurred by the owner since the last review date for the purpose of compliance with the amendments made to this Act by the Mobile Homes Act 2013.’ Confusion also surrounds existing Implied Term 18 (1) (c) which states that when determining the amount of the new pitch fee, particular regard shall be had to the effect of any enactment which has come into force since the last review date.

He says that the confusion may be caused by the legal terminology. In the amended term, it is ‘costs’ which are expressly excluded from the pitch fee review and this means the costs incurred by the park owner in complying with any changes to the site licence. The Act gives the local authority new powers to enforce the site licence conditions and to use the courts to reclaim costs from the park owner. If necessary, the local authority can issue compliance notices or even enter the park and carry out works. The local authority can recover the costs of all this from the park owner. It is these ‘costs’ that cannot be passed on to the residents in the pitch fee.

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The fee accompanying a site licence application is not considered as a ‘cost’ in the legal terminology for the purposes of this Act. It is just a licence fee. Therefore, because the Bill will give the local authority the power to charge a fee for the site licence, it can be considered at the next pitch fee review under Implied Term 18(1)(c). Although the site licence fee will be an annual fee, it can only be recovered once when the fee is first charged or on the initial application for a site licence. The sum will become an integral part of the pitch fee which will increase each year with inflation. The park owner can’t add it on each year as it will already be in the pitch fee.

The Bill also expressly excludes the cost of transferring or altering a site licence to the pitch fee by an amendment to Implied Term 19. Ref: clause 1(8) of the Bill. The Bill is carefully worded to clarify what costs  cannot be passed onto the residents, namely the costs incurred by failure to comply with the site licence conditions or costs of complying with any changes to the conditions or costs of meeting any other requirements from the local authority. The Bill deliberately does not mention the site licence fee because that is covered by the existing term which states that the effect of any enactment can be considered at the pitch fee review. This is explained in paragraph 13 of the notes to the Bill.

All parks and caravan sites have to be licensed by a local authority in accordance with the Caravan Sites and Control of Development Act 1960. They do not pay for this but from 1 April 2014, the local authority will have the power to charge a fee for the licence. The amount will be decided by each authority. It will be an annual fee.

So at the pitch fee review following the introduction of the licence fee, the park owner may add the amount of the fee to the pitch fee increase. It will become an integral part of the pitch fee - as with all overheads of running the park - and therefore will be affected by RPI.

However, in the following year, when the park owner has paid his second year’s licence fee, he will not be able to add it to the pitch fee review because it will already be in the pitch fee. Even if the amount of the fee has increased, it will not affect the pitch fee because the pitch fee will also be increased by the RPI.

The local authority will also have the power to charge for transfer of the site licence to a new owner if the park is sold and to charge for any requested variation in the site licence conditions. These charges cannot be passed onto the residents.
Before charging the fee, the local authority must prepare and publish a fees policy. This policy will take into account the different parks in their area and the size and type of park. The licence fee may vary with the size of the park and on certain parks the fee may be only a small sum or no fee at all. The policy will also include the time when the fee is payable.

This new law allowing the cost of the licence fee to be passed on to residents may be considered very unfair by many of them. We in IPHAS and NAPHR protested about this repeatedly at meetings of the DCLG when the legislation was being drafted and we objected to the idea at the Select Committee meeting. We stated that the residents were being penalised in having to pay for the new legislation which was only introduced because the previous legislation and authorities were incapable of dealing with rogue park owners.

To counter our arguments, the Government has pointed out that it now gives residents some leverage to use on the local authority. Whereas previously, when residents asked the local authority for action on the site licence conditions, they would use the excuse of lack of resources. In future we can point out that the residents are paying for the licence fee so we are entitled to some return for our money.

The Mobile Homes Bill has passed through all the readings in both Houses and is currently awaiting Royal Assent. The parts relating to the site licence fee will come into force on 1 April 2014. So there will be no effect on the pitch fee until the next pitch fee review after April 2014.

The Independent Park Home Advisory Service is a voluntary organisation offering advice and information to anyone contemplating park home living, or who is already living on a residential mobile home park in England, Scotland, Wales or Northern Ireland. Membership is currently £5 per year and information can be obtained from: Mrs S Tweddle, 24 Jensen Drive, Carr Bridge Park, Preston New Road, Blackpool, Lancs FY4 5RL, or email membership@iphas.co.uk. The IPHAS website address is: iphas.co.uk