Communities and Local Government - Minutes of EvidenceHC 177-ii

Back to Report

Oral Evidence

Taken before the Communities and Local Government Committee

on Monday 12 March 2012

Members present:

Mr Clive Betts (Chair)

Heidi Alexander

Bob Blackman

Simon Danczuk

Bill Esterson

Stephen Gilbert

George Hollingbery

James Morris

Mark Pawsey

Heather Wheeler

________________

Examination of Witnesses

Witnesses: Maria Battle, Senior Director, Consumer Focus Wales, Brian Doick, President, National Association of Park Home Residents, Sonia McColl, Founder, Park Home Owners Justice campaign, and Alan Savory MBE, Government Liaison Representative, Independent Park Home Advisory Service, gave evidence.

Q130 Chair: Good afternoon, and welcome to the second evidence session of our inquiry into park homes. Before I ask the first set of witnesses to introduce themselves, I emphasise that the purpose of these sessions is to probe the extent, nature and cause of the issues and problems that have been identified for us in written evidence, and possible changes to deal with them. A transcript of the evidence today will be published within a week. If during these oral sessions serious allegations are made against identifiable persons or organisations, the Committee may, in the interests of fairness, ask any of those persons to reply in writing to these allegations. These replies may be published by the Committee. The only thing I want to re-emphasise is that, if there are any matters that are currently before the courts, reference to them should not be made in these sessions. If it is, I will have to stop whoever is making them, because we cannot deal with matters that are sub judice in these sessions. Apart from that, you will have the opportunity to tell us what you think the problems are. At the beginning, may I ask each of you to say who you are and the organisations you represent?

Sonia McColl: I am Sonia McColl from the Park Home Owners Justice campaign.

Brian Doick: I am Brian Doick, President of the National Association of Park Home Residents.

Maria Battle: I am Maria Battle, senior director of Consumer Focus Wales, and I head the UK investigations team for Consumer Focus.

Alan Savory: I am Alan Savory of the Independent Park Home Advisory Service.

Q131 Chair: Thank you for the evidence you have given us so far. Concerns have been raised with us about bad practice, as it might be called, within the park homes industry. Can you give a general indication of how widespread you think that is, or is it just a handful of what might be termed rogue operators who are giving the whole industry a bad name?

Brian Doick: In our opinion, it has got larger than it has been in the past. I am afraid we have a situation where it is quite widespread. We know of 30-plus names of what we call unscrupulous park owners. Unfortunately, those persons are getting themselves into a position where they are buying into more parks. Consequently, one unscrupulous owner can be involved in 10 or 20 parks, even more. Because of that, more people have to put up with whatever behaviour these unscrupulous people wish to follow. That unscrupulousness is greater because there are more things they are being nasty about: the selling of homes; increasing pitch fees outside review dates; and stopping sales. All these things are created by these unscrupulous people on various parks throughout the country, and it is bigger than it was.

Having said that, there are some very good park owners out there. We would not condemn all of them. Unfortunately, because of the nature of these people’s business and how they work, it is our basic aim, through committees like yours, to try to change the law in such a way that it is a deterrent to these people. A large percentage of what they do comes under civil law and the Acts with which we are dealing.

Q132 Chair: We will come to some of these issues in a second. One of the things you say at the beginning-Mr Savory wants to come in as well-is that some park homes are perfectly appropriately run, and then one of the individuals about whom you have concerns buys up these properties. They are buying up more of these park home properties and, therefore, more are becoming unacceptable. Is that what you are saying is happening?

Brian Doick: Basically, yes.

Alan Savory: As to the extent of the problem, there are no reliable statistics. We contend that it is not a minority of rogue park owners, as is often published. I say there are no reliable statistics, but people refer to a report in 2002 that said that 67% of park owners were happy. That report was not about the satisfaction of residents anyway, but the economics of the mobile home industry. As part of the survey, Berkeley Hanover Consulting asked residents about their satisfaction with the commission rates, because that was what the report was about. That report dealt only with a very tiny section of the industry, and a good section at that; that is to say, questionnaires were sent out to parks and only the good park owners responded. The bad park owners obviously just threw those questionnaires straight into the bin. That report is not a reliable indicator of the extent of the problem.

As Brian said, Lord Graham of Edmonton has produced a list of 30 rogue park owners. If we say that on average each of those owners has six parks-we know that some of the real crooks have 25 to 30-and there are an average of 100 homes on each park, we are talking of 18,000 to 25,000 elderly vulnerable people who are under the thumb of rogue park owners.

Maria Battle: We are currently undertaking independent research to try to assess the extent of the problem. We have issued questionnaires to every local authority in England, Wales and Scotland. We have had a 100% response from Scotland and Wales and over 70% response from England. We have used our statutory powers to try to increase that. We are also interviewing up to 1,000 residents throughout the three nations to try to identify the extent of it. The preliminary findings of that research will be ready by the week beginning 23 April, and we would like to share that with you, if we may.1 To date, 50% of those residents who are randomly selected by the research company have described on their website problems they are encountering, but please treat that with caution because the research will not be complete until about 23 April.

Q133 Chair: If you can share that with us, we would be very grateful.

Sonia McColl: As you are probably aware, I have given you the key figures from the statistics gathered by the Park Home Justice campaign. That was done basically from a standing start. We were able to reach just over one-third of the park home owners out there, which I do not think was too bad. It totalled 803 reported parks out of the 2,000 that the DCLG say is the approximate figure. The numbers that came back were right across the board. There were good park owners. Residents on 36% of the parks responded to say they were good. However, residents on 509 parks, or 63%, responded that they were living under unacceptable conditions, and 48% reported living under the regime of an unscrupulous park operator who was aggressive, abusive, violent or dishonest. I realise that we are an outside body, not a Government body, and I hope that when Maria’s research comes back it will add credence to the one that has gone forward from the Park Home Justice campaign. Should you want to see them, I have stored on a DVD the forms from every single person. I think there are 1,800 A4 sheets on it. Everything is detailed. I can guarantee that every one of the figures across the board showing the problems is correct.

Q134 George Hollingbery: So far we have heard a lot of evidence, both written and in oral sessions, that one of the principal problems is sale blocking. I am sure all of you would agree that is the issue. We also heard some intriguing evidence from site owners, as well as one or two owners of homes, that there are some benefits in being able to filter who goes on to a park, in that there are terms and conditions and expectations about who should be able to live there and who should not. Indeed, there were complaints from certain home owners who said that particular operators no longer stuck to those, and perhaps they should have done a better job at filtering them. Is there a case for stopping the approval process by site owners, or is it perhaps a little more nuanced and there are also benefits to it?

Sonia McColl: The Park Home Justice campaign started because of sale blocking. I feel there is no benefit to the park owner in having anything to do with approval of the buyer. He does not need to do it. They are allowed to have references, which can be done in a separate office. Every other thing that can possibly be brought up that the prospective purchaser might want to do is covered in the written statement, and the park owner could refer back to that and the relevant inquiries, if it was going wrong.

While you leave that in position, you leave the door wide open to any unscrupulous person, of whom there are many, to meet up with the buyer on their own. That must be stopped. They are able to say whatever they like to put off a purchaser. They do so because they want to buy the properties cheaply or rent them out themselves, or simply to get the land back so that they can sell it on for a much larger sum. Most of them are very charming. When they meet a prospective purchaser on their own, they will be asked certain questions. All they have to do is pull a face. Basically, that is enough. Most of them do not do that.

I have had instances of blatant fraud by park owners. They have been brought up in the House by different MPs who have come forward. They have put in rules about age that do not exist. When that did not work, they came back with, "The land is not freehold; it is leasehold," which again takes time to prove. All of these things are put in place so the buyer walks away; or they will say, "Of course, this is an old home. I wouldn’t have a survey on it. I’ve got a new one at the top of the park that I can sell to you." That is the route they take. There are many of them.

There are also some large conglomerates, which I cannot name, which have "intention to sell" forms outside the written statement. They are not legal. They also put them out to people, and they have to get their permission at the beginning to sell their homes. I am sorry, but everybody has the right to sell their home.

Q135 George Hollingbery: We have four witnesses and only a certain amount of time. I apologise for interrupting.

Brian Doick: I agree entirely with what Sonia has already said, but there is no real reason why they have to sanction the sale. The fact is that the residents own these houses; they belong to them, not the park owner. He is responsible for the land on which the home sits; the home belongs to the person. I live in a mobile home that I own, and I have to maintain it, decorate it or whatever. It is my home and I own it. What right does someone else have to decide whether or not I can sell my home by interfering with it? He gets 10% of what I sell it for anyway. That is tax-free money.

He is only doing what he is doing to get something for himself cheaply. He can get you to sell it to him cheaply, and he can take off the home and put in a brand new one and make a large profit. That is basically what he is after. People are intimidated in situations where they have to sell up cheaply. He tells them all sorts of things to get out of it. He should not be in a position where he can interfere with the sale of somebody else’s house. The biggest problem in all of this is that there is no deterrent to stop these people doing it.

Maria Battle: From the initial research and investigations we have done-we have interviewed residents, the police and trading standards and licensing officers-it is apparent that the right to withhold consent is being abused by some site owners and is attracting organised criminals to the industry. In effect it is the financial abuse of elderly residents. Massive profits can be made. You can buy a site with 30 homes on it. If you manage to block 10, you can make £1 million immediately and pay off your mortgage.

We are recommending that there be a level playing field for site operators, park home owners and local authorities, and that the process should be abolished. There is already a right of redress for the park site operator. There are park rules about age, no pets, etc. There is also a written agreement. If all else fails, they have the right to go to the county court to evict a resident if they think he might be in breach of the rules or agreement. Then the onus is on the park site operator rather than, as the law stands, particularly vulnerable adults.

Alan Savory: There is no legal requirement for a park owner to interview a prospective buyer. All the park owner is interested in is making sure that the buyer is not an unsavoury person-that he is not a crook; that he has not come straight out of jail-and of course that he is creditworthy. It could be argued that we should do away entirely with the interview process. As my colleague has said, there is protection for the park owner in paragraphs 4, 5 and 6 of the written statement, whereby they can get rid of any person who is breaching the rules, or anything like that. One suggestion we make is that we should turn around the requirement; that is to say, the selling resident should be able to sell the home, notify the park owner who the buyer is, and then give them 28 days to produce a valid objection; otherwise, the sale will proceed.

Q136 George Hollingbery: Let’s not talk too much about the process that might be put in place, because we can all think of any number of different processes that might replace this. There is a case that it might add cost to park home owners, in that if you add in another third-party process, someone somewhere will pay for that. That might end up on the shoulders of property owners; indeed, particularly in parks where there is a legitimate and sensible owner, there will be increased cost that may not be necessary. Is that a reasonable point, or not at all?

Brian Doick: I can see the reasonableness of the point, but, knowing that we have come down to a tribunal system, which is basically free like a court, we have had situations where selling a home has cost people thousands of pounds through the legal system prior to the tribunal. If there is a small charge involved, or a solicitor is organising the sale, whatever the case may be, I do not think it will be a problem when we have had to pay out thousands. The last sale I dealt with only two years ago cost the people involved £27,000.

Q137 George Hollingbery: Your basic contention is that the demonstrable harm of the current system is worth paying for; if there is an increasing cost, it should be borne.

Brian Doick: It will have to be borne, but we should not have a situation where they are interfering anyway.

Q138 George Hollingbery: The Residential Property Tribunal took over disputes arising in this area. Has it worked?

Alan Savory: It has worked very well. The cases have been fair so far, except in the cases of sale blocking. There have been about two or three cases where the tribunal has declared that the park owner was wrong to withhold approval, but meanwhile the buyer has disappeared down the road.

Q139 George Hollingbery: Perhaps Miss Battle can take up that point.

Maria Battle: Referring to the actual statistics relating to the Residential Property Tribunal, of the 21 cases eight have been about sale blocking. Of those, six sales have been lost during the process. We come back either to abolishing this, because there are already adequate safeguards in place, or reversing the standard of proof, the presumption being that an individual is a fit and proper person unless a site operator goes to court and proves otherwise.

Q140 George Hollingbery: To concentrate briefly on the Residential Property Tribunal, can you think of any measures to improve its way of working that would allow the process to take less time and for it to be more effective?

Maria Battle: Yes: withdraw the ability to block a sale.

George Hollingbery: I am going to leave it there, because there are plenty of other questions.

Q141 Heather Wheeler: My question follows on from that, because it is to do with the harassment people have been telling us about. As MPs we get to hear about it. What evidence of harassment have you identified? Is it isolated, sporadic or systemic across the whole sector?

Sonia McColl: It is right across the whole system. I have telephone calls and emails every day with regard to it. I have instances of more passive harassment, if you like, i.e. park owners sitting outside the house in cars with blacked-out windows and the engine being revved up; causing a disturbance; and sending threatening letters of eviction for no real reason whatsoever. The worst cases involve brandishing chainsaws outside the house when residents return; sending in thugs-about which I have given you information today-to throw paint over houses; breaking car windows; putting paint inside; and threatening elderly and disabled people. All of the letters I have received are in files for you. One disabled gentleman who dared to ask to see a utility bill was threatened; he was told he would be taken to the top field and done over. It goes on and on right across the board, so, yes, a lot of it is going on.

Q142 Heather Wheeler: Can you give a couple more examples?

Maria Battle: I have interviewed residents on a number of sites in England and Wales, and have heard about exactly the types of things Sonia has said. We have linked them up because people own sites across nations and police forces. They are spitting in people’s faces. They even walk into homes. My career has been in child abuse, and I can see parallels here. They will target the most vulnerable and they will have favourites. For example, last week I was told of the targeting of two 85-year-old widows who live alone. They just walked in and said, "You’re not going to join the residents’ association, are you?" They look through the window; dump stuff outside; and spit in people’s faces.

We have identified people receiving similar treatment on a number of sites owned by one particular individual. On two sites they have kept their glasses with the saliva, but the police have said there are no witnesses to that offence. The police view it as low-level intimidation, or as a civil matter, and do not see that the aim of it is to get rid of residents so they can make a massive profit on the sale of a home. In our research we ask residents a specific question-most are selected randomly and some are self-selecting-about the type of intimidation, so, hopefully, next month we will have real statistics to answer that more fully.

Q143 Heather Wheeler: I appreciate there are four of you, but basically we are getting the same picture. Do you think that the sector has been infiltrated by professional criminals?

Maria Battle: Yes, and Operation Kingpin is the evidence for that. I hope that evidence has come before the Committee, as well as the best practice guidance on addressing criminality in the park home industry, which I think was released through ACPO. That is what the police are telling us.

Q144 Heather Wheeler: That slightly begs the question. It does not sound like the police are taking this seriously, but we have had Operation Kingpin. Basically, are you saying that different police in different areas are treating it differently?

Sonia McColl: Mark Colquhoun, who wrote the good practice guide, which we have put on the website, told me to put it out to police and to people. So many of the police forces have not even seen it. He did say to me at one point that not all of them will have seen it. They call it "civil" when it is not.

Heather Wheeler: Absolutely.

Maria Battle: He says that the flaw in the investigation is that the allegations are going to ordinary front-line police officers, whose role is to screen, rather than CID, which can investigate. If there is nothing in it, it can be sent back to the front line. We know that in child protection and domestic violence there are specialist teams. We do not have that in the park home industry. In one county council I met the chief constable because we had come across three sites about which we were very concerned. He allocated me a community police officer. They are working on 20 sites in that area, but it is a very long process. It is a complex area. The police are not seeing it, or the whole picture.

Q145 Heather Wheeler: To finish off, if there are these named individuals with a history of harassing home owners, how could they be excluded from the home ownership of sites? We are getting back to licensing and stuff, aren’t we?

Alan Savory: Only by a fit and proper person test. There are some local authorities that are frustrated because they want either to withdraw or refuse a licence to these crooks, but the 1960 Act says they have to issue a licence. Some sort of test or power is needed so the local authority is able to withdraw or refuse a licence to these crooks, and to do that they would need some sort of test to determine whether a park owner was a suitable person to hold a licence.

Maria Battle: To prevent them, a self-regulation is to stop the ability to block sales, because it is the money that attracts them; it is the financial profit. That is the way to stop them. They will look for somewhere else to make money, whatever financial abuse they can go into. There are a number of examples of a fit and proper person test. We have it in multiple house occupancy; we also have it in part 2, section 66, of the Housing Act 2004. That is a safeguard but not a solution. The solution is to stop sale blocking. We know that CRB checks are a safeguard, but they are not the solution to people infiltrating the industry. Most people who abuse do not get caught anyway, but it is a safeguard. Introduce it, yes, but the way to stop infiltration is to deter them from coming into the industry and not allow them to make such huge profits.

Sonia McColl: I think that if you do find a park owner who is doing this-we know some of the names-licences should be revoked. There should be CRO checks of all park owners before they are given a licence.

Brian Doick: To finish off with one little point that I think could be useful, if the industry bodies, the BH&HPA and National Park Homes Council, who are sitting behind me and will be talking to you later, have in their membership unscrupulous owners who break the law, they do their utmost to remove them from their organisations; in other words, they reject them completely. If there is a notice around that these people have been rejected by an organisation like that, they should not be allowed to have a licence, because they have been got rid of for constantly breaking the law. They do a pretty good job with a lot of things, which I think is an important factor.

Chair: We will be asking questions of them in due course.

Q146 Heidi Alexander: I want to ask you some questions about the written statement, which I understand is the legal document that sets out the agreement between the home owner and site owner. In your experience, how frequent an occurrence is it for home owners not to take legal advice when entering into the purchase of a park home?

Brian Doick: We see this quite a lot; it is a big number because there is no legislation to say they have to. There is not a law that says you have to go to a lawyer or solicitor, and that is the unique bit of the legal situation related to mobile homes. All they have to do is find themselves a purchaser; the park owner approves the person and they sign the agreement. If I was selling my house, as long as I had an agreement I would hand it to the incoming person. He signs it; I sign it; and the park owner signs it. The money changes hands and the job is done. But what you have said tends to suggest it is a bit wrong that people do not have sight or notice of the agreement before they buy the home. They should have, because, under the new law and the implied terms, when a park owner sells a home he has to give them 28 days to read the proposed agreement, but quite often this is not happening either. As was said earlier, there are thousands of people in this country who do not even know that written statements exist. I have been doing this for 24 years. All the new documentation we have dealt with does not get round the country.

If you look at the membership of my organisation, that of Mr Savory and the Park Home Justice campaign, we are not covering a quarter of the occupants of park homes in the country. Therefore, we do not know what a lot of them have and have not got. That is where they are getting away with it. People come to us when they are in trouble. With all due respect to you, the Government have never introduced any avenue of change to the law so these people can be got hold of. To give an example, the implied terms introduced by the Housing Act 2004, which came into force in 2006, are part of the agreement; they are a legal document, but a hell of a lot of people in the country do not even know they exist. This creates the criminality among park owners, because these implied terms have never been issued to their residents. It is part of their agreement, and it should be in there.

Q147 Heidi Alexander: I think Mr Savory’s organisation has given us a copy of a letter in which he sets out some of the proposed changes he would like to see to the implied terms.2

Alan Savory: This was a joint letter by Brian Doick and me. Even before the implied terms came out, we found some loopholes in them. We kept telling the DCLG about it. This was a letter from Brian and me to the DCLG pointing out all the problems with the new implied terms. Nothing has been done about it so far.

Q148 Heidi Alexander: Say 10 mobile homes were bought and sold. Of those 10, how many of the buyers would seek legal advice in your experience?

Alan Savory: Not enough.

Q149 Heidi Alexander: Five, six?

Brian Doick: Maybe one.

Q150 Heidi Alexander: Maybe one. So, one out of 10. Do the other three witnesses agree with that?

Sonia McColl: I would. When you are buying a mobile home, you are looking at a sum of between £70,000 and £250,000. Would anybody in this room think of spending that much money on a home without using a solicitor? That is why the tribunal, the solicitor, is so important for advice and redress.

Q151 Heidi Alexander: Why do people not seek legal advice?

Sonia McColl: Because they do not have to and they are not encouraged to. They are just told by the park owners when they go there, "Oh, that’s fine. I’ll just have a 10% deposit. You go down the road and come back. I’ll have a transfer of money, and then I’ll give you the keys." It is as easy as that. People fall for it; they do not think they have to have surveys and do not take advice. Taking advice would take time. Very often these people are hurried along with, "Well, I have got somebody else involved in this." I appreciate what Mr Shapps put in the Government fact sheet in recommending solicitors. I welcomed it when I saw it, but I think that is why the approval of the buyer should be taken away and the tribunal should do it, because then you have redress.

Maria Battle: One of the questions we are asking in the survey of residents is about the written agreement, but, like everybody else, in our investigations we have come across people who are without it. The first time and second time it shocked me, because you get more information when you buy a car. We have evidence of people turning up with a removal van behind them, and suddenly there is a £5,000 hike in the price and it is a different part of the site. We have asked residents why this is so, and they have said, "We were sold a dream." They are taken in. They are an older population who are classed as more vulnerable.

The Welsh Assembly is considering a private member’s Bill on park homes. That would make it a condition of the site licence that all site operators give a written agreement, on the basis that it would then be within the remit of the local authority to enforce. It would be in a more powerful position, but it would have to be cost effective for the local authority to do that.

Brian Doick: We think it would help if no present or future resident paid a pitch fee until they had received a written statement.

Q152 Heidi Alexander: Do you think that statement should also include a plan of the pitch?

Brian Doick: Yes.

Q153 Heidi Alexander: We have taken some evidence about boundaries changing and fences going up.

Maria Battle: As you would in conveyancing.

Brian Doick: It is in the new implied terms.

Alan Savory: When the park owner sells a new home, he is required by the Act to give a copy of the agreement 28 days in advance, but when a resident sells their home, there is no such requirement. That is a flaw. The requirement to give the agreement 28 days in advance goes on to say that the period can be reduced by the agreement of both parties. I have seen a situation where those 28 days have been reduced to one day. The park owner has persuaded the buyer to accept the agreement, sign the form and buy the home on the same day, which is utterly ridiculous.

Q154 Heidi Alexander: As to the one in 10 people who do consult a solicitor when purchasing a home, do you think the advice they get is any good? Do you think there is an issue about the quality of legal advice that exists out there?

Brian Doick: It is an issue.

Alan Savory: That is a problem, in that not all solicitors are fully familiar with mobile home legislation. There are stories of some solicitors talking about stamp duty, which does not apply to mobile homes. They have to make sure they go to the right solicitor to get legal advice.

Q155 Simon Danczuk: You are a significant group of organisations and you have done some fantastic work. I was curious to know what you have done to publicise to potential park home owners the problems, or the fact they may need to get legal advice, or alert potential park home owners to the possibility of rogue site owners. What publicity have you given to this?

Brian Doick: Our organisation has a membership of just over 13,000 in mobile home parks. That is not a lot given there are over 200,000, because they do not know about organisations. We have a website on which we put everything. When the implied terms were issued in 2006, the Government fact sheets were issued, and any other legislative stuff emerged from Parliament, we sent it directly to all our residents and members individually. The last lot cost us £8,000 to distribute. We do everything we can, and we inform local CAB offices, who speak to us quite frequently.

Q156 Simon Danczuk: But those are existing homes, are they not?

Brian Doick: We cannot see the others.

Maria Battle: We have been working in this field in the past year. That is why we want to find real in-depth research about the extent of the problem. We have produced Park Home Residents’ Rights leaflet both for England and Wales.3 It is being used round the country. I have brought some here. That summarises in plain English and Welsh what your rights are. We have been advertising in newspapers and have also commissioned a research company to go out there and find people. We have not got to the recommendations stage of our report, but we are working with trading standards, some of whom are very active and some not so; licensing authorities and all local authorities, and we are hoping from that to have some sort of campaign.

Q157 Bill Esterson: Coming to the issue of maintenance, which is one of the matters dealt with in the agreement between site owners and home owners, your submission seems to indicate significant shortcomings in the way those are phrased. Can you explain what action residents can take if a site owner fails to maintain the site to a safe or reasonable standard?

Alan Savory: The only recourse is to the local authority. We are talking about the site licence conditions. Therefore, that is the responsibility of the local authority. The resident has to complain to the local authority. In our experience local authorities vary tremendously across the country. You have good authorities, which will come out and immediately enforce conditions; others take no action whatsoever.

Sonia McColl: I agree with Mr Savory with regard to the licensing authorities. The main problem brought to me is that people pay their pre-paid maintenance in their pitch fees. They do not get maintenance done on their park, which is the roadways and common areas of the park, which they have paid for. They have nowhere to go. They pay council tax, but if they go to the council, like their counterparts in bricks and mortar homes, they are told, "Sorry; it’s on private land. We can’t do anything about it." They have a park owner who will not do anything, and they have a council that cannot do anything. Where do they go from there? This is the problem. It is the court or the RPT, which might be coming in now. Up until the RPT it was purely the court. These people have already paid twice for a service they are not getting.

Q158 Bill Esterson: How common is it for agreements to be out of date, or people not having them at all?

Brian Doick: Agreements do not get out of date because an agreement goes with a home. When you purchase a new home from the park owner, he should give you an agreement. If that house is sold six times, that agreement should be passed on to each person who moves in. The only way it can be made out of date is if the implied terms are changed and they are not put with the agreement. The express terms are changeable only by agreement between the park owner and resident. Therefore, it should not be out of date. Something might not be entered, but there are many occasions on which it is said to be out of date and has been altered outside the agreement to suit the park owner. That happens quite frequently. It is one of the issues that comes to bear on quite a number of occasions. Somebody has bought a home and the park owner has altered the agreement made with the previous resident. He does it by changing the pitch fees, etc.

Q159 Bill Esterson: Maria, while you are answering that, can you talk about how common it is for people not to be able to take legal action?

Maria Battle: If I may pick up your question on the licensing regime, we put questionnaires to all local authorities, so we hope to get intelligence back from them as to how they find the regime. Our initial findings are that it is not really fit for purpose. It comes back to fairness to local authorities as well. They have a lot of priorities. They are not able to charge sufficient fees. When it comes to enforcement, the fines are derisory and antiquated. If you compare them with multiple house occupancy, the fines are much more effective in that sector. There is also the ability for local authorities to take over the management of an MHO for a maximum of 12 months, and then longer term management can be put in place. You have to revisit the licence over a number of years. It needs to be more cost effective with more financial incentives for local authorities to be more involved in the enforcement regime. I am not asking for more regulation but for financial incentive to enforce what is there at the moment. What was your second question?

Q160 Bill Esterson: Is one of the problems that people are not in a position to take legal action?

Maria Battle: Yes. From the evidence given to us by the police, they are neither financially nor emotionally able to take legal action. I totally agree that there are some marvellous park owners and parks, but the real criminals will target the most vulnerable and the least able to take proceedings. I go back to sale blocking. Take their profit away and, hopefully, they will start leaving the industry.

Brian Doick: As to maintenance, I have here the dealings of a park that has just had a pitch fee review. They queried the maintenance. We have heard from Sonia-it is quite true-that the pitch fee covers maintenance charges for parts of the park that are not affected by the residents themselves; in other words, it is not their pitch. I refer to the roads, etc. It is up to the park owner; it is in the pitch fee. This park is charging £1,871 a year for maintenance charges. He wants more. Because changes have been inserted into the terminology of the legislation of implied terms that say that park owners can make other charges, this park owner is charging management charges together with maintenance of £18,000 a year. With another charge on top, each home on this park is paying £600 a year in addition to the £175 a month pitch fee that is already being paid for maintenance. These are the not so nice people we have to deal with; in other words, unscrupulous park owners. They end up paying £232 a month because of bent figures through extra charges and maintenance that they should not have to pay. That is the sort of thing we are fighting at the moment.

Alan Savory: Although good park owners will maintain their parks, when the park is taken over by a rogue park owner, maintenance is minimal-just firefighting.

Q161 Bill Esterson: Do site owners discourage home owners from taking legal action or going to the council on these maintenance issues?

Alan Savory: Some of them do, yes.

Maria Battle: The evidence that came out of Operation Kingpin was that it was not until these people were in custody that every single park home owner came forward.

Brian Doick: Because of fear.

Maria Battle: Yes. Five of those had sold their park home for £1 and one for £4,000, and the average price was £80,000. We have been going on to the sites as an independent agency. A police officer on a site can also be intimidated. If they see one person being shouted at, it is aggravated common assault because it intimidates the rest. They are living there and can see that person every single day. It is a very complex industry.

Brian Doick: That is absolutely right. We know these people are running a business to make money. We do not object to that. I do not care if they make themselves £1,000 a day; that is the profit of a business, but they are ripping people to shreds, and that is the big danger. This industry will collapse in a few years’ time because of the increase in pitch fees. No one will pay money to live in their own house on somebody else’s land and also pay council tax-they have to pay it and do not object to it-which comes to almost £400 a month. Their old age pensions do not arise to that degree.

Some people will say that the park owners need all this money to run the parks. It is a major profiteering operation, whichever way you look at it. They are paying £1 million, £2 million, or whatever to buy a park. Nobody will spend that money on anything if it will not make a profit, and they see the profits before they get in there and rip people to shreds. We are glad to be here to talk to you about it. I hope that what we have said today can help with what you are trying to achieve, because we need your help.

Q162 James Morris: To clarify one point you made, Mr Savory, about the role of the local authority and the licensing regime, are you saying that local authorities across the country are applying it inconsistently, or that the rules themselves are fundamentally wrong and need to be changed?

Alan Savory: A little of both. The local authorities are inconsistent. Some local authorities are very good; some are not. They work to the site licence conditions. For some local authorities, the site licence conditions are way out of date, whereas others have taken into account the latest version of the model standards of 2008.

Q163 James Morris: What do you think is the underlying driver for the inconsistency? One is that they are not applying the standards correctly. Are there any other drivers for the inconsistency do you think?

Alan Savory: Only the interest and the competence of the local authority. I am not being rude to local authorities. I am just saying that, whereas in some local authorities they would have a dedicated person to deal with mobile home parks, for others it might just be a secondary task of another official.

Maria Battle: It is prioritisation and finance. If you compare it with the MHOs, they charge a reasonable fee. If they are to do work, they charge the site operator without having to go through a legislative procedure, perhaps having an appeals procedure within the local authority. If you renew the licences, you charge again. If you take over a site because it is a rogue operator, the local authority has the pitch fees, etc. It is not a cost-effective scheme, and it is way down their priorities.

Q164 Mark Pawsey: Mr Savory, is the variability of local authorities to do with the number of sites within each area, because if you have an authority with several sites, you would expect there to be an officer with lots of expertise to deal with that? In other authorities that have only one, it may be the part-time responsibility of an officer who may not be up to speed in the same way. Is that a problem?

Alan Savory: It is a matter of how much resource they devote to that particular job of mobile home parks.

Maria Battle: It can be even worse in a county with a lot of sites, because one person might cover it. I know that in one county we dealt with last week there are over 100 sites, of which about 22 are park home sites. As to the response we have had from local authorities across England, Wales and Scotland, we were hoping for the first time ever to get a complete picture of park home sites from the licensing authorities. It is incomplete; the evidence is not full. Some of the records are not up to scratch. I think it is an issue of resources.

Q165 Chair: To come back to sales, you talked earlier about ending the blocking of sales, and all the harassment that goes with it. Wouldn’t it be better if we got the park site owners completely out of the sales process and took away the 10% commission? That might involve higher site charges. How do you feel about that?

Alan Savory: Firstly, in the implied terms pitch fees would not automatically go up if you take away the commission. If you look at the implied terms, paragraph 18 says that when reviewing the pitch fee regard should be had to the effects of any enactment. It goes on to talk about the effect "of any enactment other than in paragraph 8(2) above", which refers to the commission rate and how it can be changed by order of the Secretary of State. What I am saying is that, if the commission is taken away, the pitch fee does not automatically go up.

Q166 Chair: That is a legal interpretation, but in reality no park owner will waive his 10% commission and not put up the site pitch fee, so the two are linked in terms of financial returns.

Brian Doick: I think it would be a major issue. We have been told in the past that, if the commission was taken away, the pitch fees would rise by up to 25%. No person living in a home will thank us for increasing their pitch fee when they already paying large figures, as I read out to you earlier, and 25% on top of that is another big figure, whereas the commission is payable only when they sell their home. It is normally sold when an older person goes into care and it is sold by the beneficiaries. It could be a major problem.

As you have rightly said, we need to take away the process. I think the sales system is a very serious thing, and if you can do something to stop these sales it will be an important factor. It has to be dealt with somewhere along the line. These people have to be stopped, because it is very crooked.

Maria Battle: In the 2006-07 consultation, 76% of residents favoured a decrease in commission to 7.5%, and 95% of site owners wanted to maintain the 10%. The research is not complete, but I am listening to the residents we meet. Many are cash poor, and that is their capital. They have downsized and invested in this ideal home. I hear all the time that they wanted peace and a lovely site and to live in a community. They are very frightened of the pitch fees going up. As you have probably heard in evidence, they wish the RPI to be abolished and for it to be linked to the CPI as their pensions are.

Q167 Chair: Another point is that there is often a wide disparity among pitch fees on exactly the same site. People pay different amounts. Does that need to be addressed? Presumably, it happens when some homes come back to the park owner, who then does a new agreement at probably a higher pitch fee. Would it be better if the pitch fee was related to the services provided so it is something like a service charge? Is that something you favour?

Sonia McColl: On that particular issue, I think it should be across the board. It causes a lot of pain to people in the park when they know that one person is paying £170 per month and someone else is paying £102 as the pitch fee, which varies so much. On the subject you are talking about, they also feel very much that the increase by RPI is wrong. It is mostly the retired element in these homes. Their pensions go up by CPI, not RPI. If you could take a static month of the year, say 1 April when CPI comes into play, everyone’s monthly pitch fee would be the same. At the moment, park owners do it every month of the year at different RPI rates. This causes a lot of discord among the people in the parks.

Brian Doick: Earlier a colleague spoke about the licensing system and said that payment might be wanted for the licence to be produced, whether annually or whenever it is to be. You have to remember that, if there is a payment system for licensing, it will not be the park owner but the residents who pay it. He will use that as a change of legislation, which is mentioned in the agreement, and he can therefore increase the pitch fees. They will be covering their costs in those pitch fees, claiming it is for the residents’ benefit. We have to accept that in business you have expenditure, and that is where maintenance of these parks comes in. It should be for them, not residents, to pay that. The resident pays for everything.

As I said to a park owner only the other day, if I hire or rent a car, which is the same as renting a piece of land on which to put my home, I do not buy new tyres for the car, because I am paying a rental fee for that purpose. I am paying a rental for the park. You should not have to pay all the extra charges that I read out to you earlier. I know we have to pay, but the important factor is that these things are fair and reasonable.

Q168 Stephen Gilbert: I think you have done a fantastic job in outlining some of the very serious problems that individuals and communities are experiencing across the country. We have touched on some of the solutions, but I want to nail them down. How would you reform the site licensing system?

Alan Savory: We want to give the local authorities the power to refuse to issue a licence to-or withdraw a licence already issued-a park owner who is not a suitable person, or who has done something wrong, or has failed to comply with site licence conditions. The only way you can do that is by some sort of test of park owners. I suggest the test should be national; it should not be left to local authorities. Obviously, the licensing should be done by them, but the fit and proper person test, or whatever you like to call it, should be a national scheme, because some of the rogue park owners own parks in a number of counties. If you are to withdraw a licence in one county, the other counties should know about it. Therefore, it should be a national test operated by a national organisation, such as the Residential Property
Tribunal Service.

Maria Battle: In respect of the fit and proper person test, I refer the Committee to the one in Scotland, where the local authority has to consider offences involving fraud or dishonesty; drugs or violence; unlawful discrimination; breaches of law relating to housing and letting; and failure to act in relation to antisocial behaviour. They have to consider the totality of the information available, and they have the power to require a CRB check. There is already a process in place that perhaps we could look at to see how effective it is.

I would repeat what I said before. That is a safeguard, not a solution. Local authorities need incentives in order to do their job. They need to charge for licences and have power to refuse them. I cannot take over a pub or a club if I have a drink driving conviction. If I want to buy a park site and I have a serious criminal conviction, I can do it. One of the licensing conditions should be that written agreements are given to residents, because it is critical that they have a contract. They should be able to charge for work that local authorities do in a fair way but also in a bureaucratically easier way than going through tribunals; and they should have the ability, as they do in MHOs, to take over the management, and also have a set period of time in which to renew the licence.

Q169 Stephen Gilbert: In the Scottish example, you talk about local authorities being the appropriate level for the fit and proper person test, or a test of that nature. That is different from Alan’s point. Have you considered whether it is better at national or local level?

Maria Battle: We have not considered that. I think the standard should be national-we have not got to that stage in our research-but we should look for the most effective method of enforcement. The people who should be enforcing on a day-to-day basis are the licensing authority. I think they should have the tools so they are able to do their job. I will draw another parallel. At the moment a Food Hygiene Bill is going through the Welsh Assembly. That introduces on-the-spot fines for those businesses that do not display their food hygiene ratings. We could look also at on-the-spot fines.

Brian Doick: I would like to quote you something we prepared in response to the park home licensing that took place a few years ago, which we believe should be dealt with. "The experience we have gained over some years as a residents association has shown that unscrupulous park owners will use any trick they can to avoid abiding by the law, i.e. complying with the time factor to complete the laid down conditions and use methods that will divert authorities to think they have sold the park when they have passed it to a family member, i.e. wife, son, brother, cousin, etc, and nullify the council’s directive, which therefore means there are a lot of people involved who need to be criminally checked upon. We support proposals that will assist the creation of fit and proper persons who shall be licensed to own and manage residential parks, but we cannot see any local authority being able to conduct an essential search for information when park owners can have a number of parks spread over many areas. It is therefore essential that a national body should be set up to organise a responsible team that can conduct a procedure to obtain all relevant information appertaining to those persons who are to be responsible for the management or ownership of parks," because we have the criminal element working against local authorities. They use these tricks; we have experienced it. The council will say, "You have a year to do this work, Mr Park Owner," but when it gets to 11 months he has done nothing. They go round and check on him, and he says, "I don’t own it anymore; it’s owned by someone down the road," who is his brother. The council then give him another year. This is a major problem in everything that happens.

Sonia McColl: Most of the other people on the panel have said everything that goes along with it. The people who run a care home have to be checked; the people who run mobile home sites should have the same sort of check. You are dealing with elderly vulnerable people. The youngest are just retired and they will become steadily older and more vulnerable. There should be a full investigation of anyone by a CRO check. If someone is found to have a criminal record or a blemish on their character that could be detrimental to elderly people or residents of a park home site, they should not be given a site licence. It is as simple as that. I would not give them one.

Q170 Stephen Gilbert: Perhaps I could have a very quick yes or no answer from everyone. Maria, I think you said earlier that the local authority’s system of fines for licence breaches is very low. Would everybody support an increase in the fines that can be imposed on park site owners?

Alan Savory: Yes.

Sonia McColl: Fine them excessively.

Q171 Stephen Gilbert: I put a slightly more complicated question, but I am conscious of the time. A fit and proper person test would have associated costs. Do you think home owners would be willing to pay a levy or support those extra costs to set up that regime, or do you think the funding should come from somewhere else?

Sonia McColl: What is the cost of someone’s life? I would leave it at that. If you put that to any home owner, they would be prepared for something to be set up, if it came to it, because it is so important and has to happen.

Brian Doick: I think it is important and it has to happen, but I do not think it is right even to consider that residents should pay for this. This is someone who is being checked out to run a business legally. We are looking at the illegal side. I do not think that we as residents should say we will pay to sort out whether a site owner is fit and proper. It is the responsibility of the authorities that issue a licence to that man to run a business, which, if we are not careful, will go against people. Vulnerable elderly people should not be in the position they are in now, and I could not support, and I do not think my organisation would, our having to pay for sorting out the criminal.

Maria Battle: It would be worth looking at other licensing regimes to see who bears the cost, for example the licensing trade, pubs, taxis, MHOs, and just draw on best practice.

Alan Savory: I agree it should be done, but it seems unfair that residents should have to pay because the existing regulations and authorities cannot handle these crooked park owners.

Chair: Thank you all very much indeed for coming to give evidence this afternoon.

Examination of Witnesses

Witnesses: Katy Buswell, Director, Buswell Parks, Alicia Dunne, Deputy Director General, National Caravan Council, Ros Pritchard OBE, Director General, British Holiday & Home Parks Association, and Malcolm Kent, Managing Director, Keat Farm Park Homes, gave evidence.

Q172 Chair: Good afternoon and welcome to you all. You were probably all in the room when I gave a warning about any matter that might be sub judice not being given in evidence. I just remind you of that. To begin with, for the sake of our records could you say who you are and the organisations you represent?

Alicia Dunne: I am Alicia Dunne, National Caravan Council.

Ros Pritchard: I am Ros Pritchard, British Holiday & Home Parks Association.

Katy Buswell: I am Katy Buswell of Buswell Parks, and I am also chairman of the residential executive committee of the British Holiday & Home Parks Association.

Malcolm Kent: My name is Malcolm Kent. I operate parks in the south-east, and I have chaired both trade organisations in the past.

Q173 Chair: One issue raised with us as a matter of contention, which may encourage bad practice among some people, is the 10% commission. You probably heard me raise it with the previous witnesses. Do you think that in general it would be a good idea to reduce or even remove the 10% commission and have higher pitch fees instead?

Malcolm Kent: Our income stream comes from three different legs of the industry. If you remove or reduce one, it will put pressure on the other income streams. While it would be possible to do it eventually, it would possibly help the resident who is staying there rather than the one who is leaving the park. I can speak only from my experience. If the 10% was reduced, we would have to find other ways to be a viable business.

Ros Pritchard: I think the payment of commission is actually one of the attractions of park home living, because so many of our customers are releasing equity, and commission is really a pay later scheme. It subsidises the pitch fee and may even subsidise the purchase price. There is obviously an issue of transparency, but if you remove the commission and put the price on earlier, it would be less attractive to customers who are cash poor but want the peace and quiet of a rural community that they would find on a park.

Q174 Chair: So, generally, there is not much support for doing it.

Katy Buswell: No.

Q175 Chair: Are you generally content with the current arrangement of having a 10% commission and, as a result, lower pitch fees than would otherwise be the case?

Ros Pritchard: It is the way this industry has always worked from day one. The change would affect our customers and would therefore have an impact on the business.

Katy Buswell: I would concur.

Q176 Chair: Can you give an idea how much a site owner would pay when a new park home goes up? How much it would cost to erect, and what would be the selling price? Can we have some idea of the net profit made on those transactions?

Ros Pritchard: If you are looking at a new park home on a new park home development, you have purchased the land; you have got planning permission on it; you have developed the roads, street lighting, electricity, water, sewerage and probably gas. The cost of pitch development would be between £20,000 and £40,000 on top of the land. You have purchased a home to sell. A small single would cost from £35,000 up to a luxury twin for £150,000. You have transported it, sited it and commissioned it. You are selling it according to the market price. You will be selling it for a lot more in the south-east of England than, say, the north-west of England. It is straight housing economics. Therefore, sales prices are in a range-I called round the members-between £65,000 and £200,000 depending on where you are and what it is you are buying.

Q177 Chair: It is £200,000 at the top end. How much will it cost to buy a home?

Ros Pritchard: A top-end luxury twin would cost £150,000-it would be slightly lower for a less luxury twin-plus siting and commission.

Q178 Chair: You are saying there is very little profit in selling a new home at the top end.

Ros Pritchard: We are talking about pitch development. That would be a new pitch. If it is on an existing pitch, you still have maintenance of that infrastructure, which has to be completely renewed.

Katy Buswell: Yes. For instance, if I sell a new home on an existing pitch, I would start by taking up the old base, because older bases were not built to the current standard. There is a significant investment in the pitch in the first place. It usually means relaying water and drainage, and there are siting, transport and commissioning costs on top of the purchase of the home. In addition, in all cases we have paid the outgoing home owner something for his old home.

Q179 Chair: In previous evidence it was suggested to us that maybe not all park owners behaved as you say you do. Perhaps they buy the existing home for a relatively small amount and do not do all the work of redeveloping the site and putting in new services; a new home is simply put on the existing site and a rather large profit is made by the owner. Are you aware of that practice?

Malcolm Kent: Yes. We know it happens; we know the people who do it; we know the names, as I am sure you do. Quite honestly, at times it is embarrassing to be a park owner given these people who have come into the industry over the last few years. We as an industry would like to see them not with us anymore.

Q180 Chair: This is a practice of which you are aware and for which you have no time. You are saying that these people should be out of the industry.

Malcolm Kent: Yes. I have to say that, as far as I know, they are not members of either of the trade associations. They operate outside the law. Unfortunately, while the law is there, it is not enforced in the way it should be. That might be a deterrent to keep them out of our industry. I do not know.

Q181 Heidi Alexander: Ros, we heard Malcolm just talking about some of the less upstanding site owners. Do you believe that your membership is 100% ethical? Do you have concerns about any of your members in terms of the sorts of practices about which we have just heard?

Ros Pritchard: I could not vouch for all the members 100% of the time. What I can say is that, when issues are reported to us, we investigate them and do something about it. I know the Committee is interested in "fit and proper". The test of any fit and proper case that would mean depriving somebody of their livelihood would be a far bigger test than it would be for trade association membership. I thought it would be helpful if you learnt of the steps we had taken over the years to try to ensure that people who are not fit and proper stay out of membership. For example, as we went through the process of investigating and drumming out of membership anybody we thought should not be there, or refusing membership to any applicant the members did not want in membership, we had to change our articles of association. The test of membership is to refrain from conduct that is unworthy of a member, but we changed our articles of association to take into consideration the conduct of a colleague of the member, who could be a spouse, family member, partner or fellow director.

We also had to introduce the ability to suspend that member while we were undertaking our inquiries, because inquiries could go on for a very long time. We wanted to be able to suspend pending the outcome of that so we could reach the right decision. We also introduced quite a high fee for anybody who wanted to appeal against the decision of our membership committee to prevent vexatious applicants spinning out the legal process. We have also now prevented our membership processes from being stopped by a member resigning their membership. Our membership processes will continue so they reach a conclusion. We have introduced an act of insolvency against a member as a reason for termination, because that was not working.

These are the sorts of steps we are taking to keep the right people in membership and the wrong people out of membership, but we have to do an awful lot of legal work to keep it going. The big thing in any discussion of "fit and proper" is that, in the test of association membership, we do not deprive anybody of their livelihood by removing them from membership. They can still trade. Therefore, although we follow the principles of natural justice, the legal tests will not be the same as for any local authority trying to remove a licence.

Q182 Heidi Alexander: How many people have you removed from membership because of concerns about their practices, say, in the last couple of years?

Ros Pritchard: It is about one or two a year.

Q183 Chair: Once you have removed them does it make any difference?

Ros Pritchard: Some are very unhappy about being removed from membership, which possibly does make a difference. For others, we look at cases where an error has been made and the business person attends our membership committee explaining that it was an error born of ignorance. We have had cases where the membership committee has suspended that member so they can no longer hold themselves out to be a member, but they continue to receive our advice services because they need a source of information to stay within the law. If there appears to be genuine contrition and they want that advice, that is another route open-that has happened on one occasion-to ensure the best possible outcome for the customers on that park and for the industry.

Q184 Chair: But, presumably, in some of the worst excesses we have heard about, the people involved are not particularly bothered whether or not they are members.

Katy Buswell: It is almost as if there are two different industries with two different business models. There are people like me and other good park owners-I hope I am a good park owner-and there are those who use unscrupulous practices. On the whole, what they are doing is illegal and should be enforced against, whether it is by the local authority, trading standards or the police. There is legislation to deal with it if it is enforced.

Q185 Mark Pawsey: I want to ask some questions about a power that park site owners have that does not seem to exist in many other areas of commerce and trade and relationships between individuals. Park owners have power over the ability of park home owners to sell their homes to whomsoever they wish. Would somebody care to justify why site owners should have that power?

Ros Pritchard: I am happy to do it, but it is better coming from somebody who uses it.

Katy Buswell: I feel that, in the interests of the incoming resident and the community of the park as a whole, it is helpful if I am involved in the process. I do not have a right to say that somebody cannot sell their home. All I have is a right to approve the incoming person, which must not be unreasonably withheld. As far as I am concerned, they have to meet the park criteria. On my parks we do not have an age rule, so it does not apply to me, and we do allow pets. I have been involved since 1983, and I have never refused a purchaser.

Q186 Mark Pawsey: Does the same apply to the other site owners giving evidence today?

Malcolm Kent: We have refused people based on age-that is all-but only in very few cases. All our advertising is for 50-plus, and they are usually the type of people who come to us. We also think we have a duty to protect the residents who live on the park. If you buy a park home for a quiet retreat, you do not expect someone to move in next door with three children, two dogs and everything else that goes with it. Anybody who spends these considerable amounts of money should want to meet the park owner.

Q187 Mark Pawsey: Would you accept that is a power that can be used inappropriately? Annette Brooke, a Member of Parliament who has taken a lot of interest in this sector, says she has evidence that site owners have interviews with prospective buyers and have used them to give false and misleading information, thereby putting off those buyers. The motivation for the park site owner in doing that is to drive down the price at which the existing owner may sell. Often the park home owner must then sell it to the park site owner, and he can take away the old mobile home, replace it with a new one and make a substantial profit. Do you accept there is a possibility that might happen, or do you accept that it does happen?

Malcolm Kent: It does happen.

Ros Pritchard: We acknowledge there is an abuse. In 2011 RPT decisions, four park owners were found outright to be abusing their role. We have argued in our evidence to the Committee that any changes must take account not only of the interests of the seller but also of the interests of the purchaser and the community on the park.4 The earlier suggestion was that the park owner could always evict somebody who had bought a park home and then did not meet the rules. That puts the park owner in an absolutely ghastly position vis-à-vis the purchaser, because the seller has long gone. He should not be there but has invested all his money. You are just moving the problem from the seller to the purchaser. What we have suggested is that there needs to be a mechanism to make sure the purchaser has all the information they need. From evidence today and last week, buyer beware is perhaps not the approach that is most appropriate, so how do you ensure that the buyer has a copy of that written statement before they purchase and understands what they are getting into?

Q130 Mark Pawsey: I would like to stick to the interview or privilege that the park owner has.

Ros Pritchard: There is no right to an interview.

Q131 Mark Pawsey: I understand that the interview is a pretty standard practice. What are your thoughts on having a third party present at the time the interview takes place?

Katy Buswell: I would be very happy to have a third party present. As a matter of course, I always invite the vendor to any meeting I have with the purchaser so everybody can discuss things openly and debate them.

Q132 Mark Pawsey: But clearly there are lot of instances where that is not happening. Would you like that to be made mandatory?

Katy Buswell: I would not have a problem with it.

Q133 Mark Pawsey: Do you think the industry would be better off if it were a requirement that an independent person sat in on the interview, if and when it took place?

Malcolm Kent: If it helped to rid the industry of the small minority who have come into it for money, we would definitely support it.

Q134 Mark Pawsey: Do you see any role here for the Residential Property Tribunal?

Katy Buswell: I am not sure how many of them there are and whether there are enough to spread around the country to deal with every assignment. As a park owner, I have to be pretty flexible on times, dates and everything else in order to deal with a transaction. If there was someone there, I would be very happy to do it.

Q135 Mark Pawsey: In your view are there too many transactions taking place and it would put a blockage in the system?

Katy Buswell: I think the RPTS might struggle to be flexible enough to meet that, but I would be very happy to have a third party.

Ros Pritchard: There is a role for them to play, in that they have identified four park owners who were abusing their role. They should be keeping a register so that we know which park owners are abusing that situation, and any other common abuses. As they learn from their work, they should also be applying a deterrent. It is one thing to say you should have approved that purchase, but if the purchaser is long gone, there is no deterrent for the park owner not to do it again. I understand that the RPT has powers to award damages. I think those damages should be sufficient to provide a deterrent against such bad practice. That is a very important role for the RPT in the sales process.

Q136 George Hollingbery: One thing that has bamboozled the Committee is the number of people entering into very substantial capital transactions who do not appear to take any legal advice. Is that your experience? Can you try to indicate to us, roughly, the sorts of numbers of people you believe do not take legal advice when they go through these transaction processes?

Malcolm Kent: In our case, the vast majority. We suggest that they use a solicitor if they are selling a house. Usually, that solicitor does not have the information about park home law, and often it is just a case of transferring over the money. The buyer is usually very happy not to pay increased fees to his solicitor, but if I was spending that sort of money, I would want to be certain I was on a sound footing legally.

Alicia Dunne: We receive a number of consumer queries by email and telephone from people who are doing research. Some enlightened people do so; it is a big transaction. We discuss the options open to them. We refer them to our website, theparkhome.net, which has on it pages that recommend specifically that consumers and purchasers seek professional advice at the outset and speak to solicitors and estate agents in the buying process.

We acknowledge that experts who know about park home legislation out there are probably few and far between, but, having done some research in the last 12 months, one firm has quoted 10 instructions from people who are looking to buy and have used a solicitor to advise them on that. As my colleagues here suggest, it is still very much the minority. It is a question of education and awareness. I think it is the role of all stakeholders in this industry to make them aware of what is involved. The law lays down that purchasers of new homes must receive a written statement. We have got copies here; I am sure you have seen them.

Equally, on assignments, people may not know they exist and may not see them until the day of the transaction itself. We have already heard this afternoon about the importance of making sure all those involved have a period of time to understand what the transaction is about. The minimum is 28 days for those buying a new home, but not if you are buying a preowned home. Perhaps all the agencies-national residents’ associations, local authorities and solicitors-could work together on a guidance pack to get more of this information out there where it belongs.

Q137 George Hollingbery: I remain absolutely fascinated by this. No one here is going to buy a regular bricks and mortar home without entering into extensive research. Do you have any ideas how this can be tightened up? It occurs to me that you could force all park owners to have a fully registered copy of the agreement reached with signatures available for inspection at any time. That would hardly be onerous. Are there any ideas of that sort that have occurred to you as the industry?

Alicia Dunne: Do you mean to make people seek legal advice?

Q138 George Hollingbery: Is that an option? Should it be mandatory that people must have had legal advice? My idea is that the owners should have a copy of the full signed agreement certified by the person’s signature, and they have to keep it on file for inspection at any time.

Ros Pritchard: For any good park owner, that would also be in their business interest. I do not think anybody would argue with that as a legal requirement.

Q139 George Hollingbery: But should it be?

Malcolm Kent: Yes, it could be.

Q140 George Hollingbery: Would that help? Would it make a real difference?

Katy Buswell: I do not know whether it would make a real difference. The problem is that the bad park owners, the UPOs, are breaking the law as it is, so I am not sure that introducing further legislation and regulation makes a difference. They do not care, because they are already breaking the law.

Q141 George Hollingbery: In that case, let me take it further. Even where a legal agreement is signed, which is what you imply, is it the case that a poor site owner ignores it anyway?

Malcolm Kent: In some instances he does.

Q142 George Hollingbery: In many or in some?

Malcolm Kent: I can talk only about my business. All our owners have that agreement, but in quite a few cases the UPOs we know of ignore the agreements and the paper on which they are written.

Q143 George Hollingbery: Would you be in general agreement that, if there was a full copy of a legal agreement signed between the two parties and it was mandatory for the site owner to keep it as a record and make it available at any time, it would be a step in the right direction?

Ros Pritchard: It is more law that, if it is not enforced, achieves absolutely nothing. Every good park owner should be doing it anyway.

Chair: Unfortunately, I must now suspend the Committee. We have a Division in the House. We will be back in about 20 minutes if we have two votes.

Sitting suspended for a Division in the House.

On resuming-

Q144 George Hollingbery: One of our previous witnesses said there was no requirement to have a legal agreement. Am I wrong in thinking that there is no legal requirement to have any kind of legal agreement for buying a house? You have to convey it, but there is absolutely no requirement to have legal advice to buy or sell a house.

Ros Pritchard: I do not believe so.

Q145 George Hollingbery: We are all fairly clear about that. That leads to a further question. It has been asserted again and again that this law is so obscure that no one really understands it and there are no experts on it, but it does not seem to me to be that obscure that a standard set of conditions applies to all transactions with a few variations on one side or the other. Essentially, what we are trying to achieve here is a piece of paper that everyone understands and both sides have signed, and that does not seem to me to be beyond the wit of man. Is it that complicated?

Malcolm Kent: It is not complicated, but, for the sake of repeating it, for people who are acting outside the law it does not matter what the piece of paper says. We have to get them to sign that piece of paper; we must put more teeth into whatever it is to stop these people taking advantage of often elderly people.

Q146 George Hollingbery: If, say, as part of the licensing process one of the conditions was that one had to keep a full record of all transactions and sale agreements on file so it could be inspected at any time, might that be useful?

Ros Pritchard: Just because an unscrupulous park owner has agreements on file does not mean he respects the content of them. In that 70% or 80% of all agreements are in implied terms set out by statute, they are the same on every park. The differences at the end are the park rules and pitch boundaries. Those are the sorts of things that differ, but I think that the issues being highlighted in the industry relate to those who breach the implied terms that are the law as it applies to every agreement between park owners and residents.

Q147 George Hollingbery: At the very least, one thing that has absolutely astonished us from the beginning is that people do not even begin to look at these agreements. They do not work out where their pitch is; they have not worked out what their rights are; they do not enforce them because they do not know about them. This at least might make people more aware of what is going on and what they are entering into.

Alicia Dunne: It is very much about awareness. We try to encourage everyone to seek advice and information at the outset. It also amazes us that many people will be sold that lifestyle and that dream without checking first and foremost what it is they are getting themselves into. I think there is a perception that it an expensive, lengthy process. It is a matter of finding someone who does understand park home legislation. If you went to a high street solicitor-not to denigrate average high street solicitors-many will confuse it with the conveyancing process. It is not, because there is no land transaction. It is about making sure that agreement is in place, and that people understand it and have the ability to deal with it.

It is staggering. There is a suggestion about having the document registered by a central body. There is a lot of talk at the moment about another element of our industry, which is type approval for motor homes, as it happens to be, as vehicles under the European directive. There will be a requirement for records to be held centrally of sales of vehicles after 29 October of this year. Maybe if the document that is signed is held centrally by another depositary, such as the conveyancer, that is a possibility. Therefore, it has to be recorded and filled in. If not, that is an issue that could go to the RPT, which could check to see why it has not been deposited with it and perhaps take further steps after that.

Q148 George Hollingbery: I think I am beginning to understand that you think there are two parts to this process: getting people to be aware of what they are signing and entering into is one part.

Alicia Dunne: Yes.

Q149 George Hollingbery: That is an essential step towards being able to enforce those terms and conditions against landlords as and when they transgress either through a licensing process or the courts, if necessary. There are two parts to this process. Is that a reasonable supposition?

Malcolm Kent: I think the difficulty lies in getting prospective buyers sometimes to understand the agreements, which are pretty straightforward, and to ask them to take legal advice. They do not want to pay the money. If they have done their homework correctly, they will have walked round the park several times, spoken to many residents and got a feel for the park, and therefore maybe a feel for the park owner, but I am afraid that will not stop the UPOs. We have to get hard with them, whether it be through statute. We have to increase fines, give the RPTs teeth and move enforcement on, because it is almost nonexistent at the present time. When you hear that enforcement has taken place and fines and damages are awarded, they remain unpaid, and the courts do not seem able to collect some of these fines.

Q150 Heidi Alexander: Exactly. If people evade paying fines, should there be a further step that results in some form of criminal proceedings being taken against them?

Malcolm Kent: Yes.

Q151 Heidi Alexander: Would you all support that?

Malcolm Kent: Definitely.

Q152 Heidi Alexander: Do you think the level of fines that can be levied on site owners by local authorities is sufficient? We heard evidence last week in Bournemouth from one site owner that, if one wanted to get people to comply with their licence and adopt appropriate practices on sites, one should have fines of £250,000.
Would you support that level of fine being introduced?

Malcolm Kent: I would not have a problem with that at all.

Katy Buswell: I would support a higher maximum fine, as long as it is applied proportionately.

Ros Pritchard: It is a question of what you are fining people for. At the moment, the maximum fine for a breach of site licence is £5,000, which for a major breach is not sufficient. If you are talking about fraud, misrepresentation, or that sort of thing, it should be much higher. It should be a sufficient deterrent not to do it.

Alicia Dunne: Yes, absolutely.

Q153 Heidi Alexander: We heard evidence from the earlier witnesses that some licensing frameworks already exist, perhaps for homes in multiple occupation, and where substandard conditions exist in that sector, action can be taken against landlords, if you like. Do you see that sort of licensing regime as being able to be transferred to the park homes sector, and what do you think of that type of licensing regime in its transferability?

Ros Pritchard: There are two sorts of things you need to license. You already have the system of site licensing, which is about the infrastructure on the park-the roads, sewerage, fire distances and that sort of thing-but you also have the behaviour of the park owner, whether he is a suitable person to be running that park. We had a consultation under the last Government on a fit and proper regime. It failed to identify a practical way forward. BH&HPA and the NCC have always supported the principle of a fit and proper person test because the industry’s reputation is tarred with the same brush as these rogues.

Rather than create an enormous bureaucracy for tests for the good guys to jump over, would it be better to create a test whereby the bad guys who fail get drummed out? Very often somebody will apply for membership and, if there is no evidence of any bad doings, we have no reason to exclude that individual from membership. It is only when there is evidence that we can act. We probably spend more time on discipline because we have evidence. You could apply a test to all good park owners, and Malcolm and Katy could jump through the hoop and there would be expense across the piece. What have we achieved? Today they are fine; we have just incurred cost. What we need is a system whereby when somebody steps out of line they are barred from managing the park. That could be a greater deterrent, a cheaper way of achieving it and perhaps more effective.

Q154 Heidi Alexander: How do you see that operating in practice? How do you get from a point where the site owner is not conducting himself in an appropriate manner to one where he is not able to run the park? What in your mind would be the process?

Ros Pritchard: There would have to be a conviction, would there not, for abusing the rights of home owners on the park? That should be reason for the site licence to be revoked. The issue then is to protect the interests of all those residing on the park who have an investment in their home on that park. I think that is why we have seen so few revocations of site licences, because the local authority would need to step in and provide management of that park. Pitch fees would not be sufficient to finance the running of that park, so you would need the criminal law to assist you in order to get proceeds of crime, or something, to manage the park and take it forward.

Q155 Heidi Alexander: Has that ever happened? Has any local authority stepped in and taken on the management of a park as a result of licence revocation?

Alicia Dunne: Not to my knowledge.

Ros Pritchard: It is very complicated. Perhaps you need something like the way a receiver works so that you can receive the park. In this country it is quite right that everybody is innocent until proven guilty and we all have our human rights, but to deprive somebody of their land and livelihood would require a very high test, but that is what we need. Certainly, in the Kingpin case mentioned earlier, proceeds of crime legislation was used to sell the park and compensate the victims. That would be the closest we have to a completely unscrupulous criminal park owner losing his park in order to protect the interests of home owners on that park.

Q156 Heidi Alexander: To go back to some of the questions I asked earlier, I asked you, Ros, about the actions taken by your organisation to feel more confident about the suitability of your members, if you like. Alicia, forgive me but I am not completely clear about the difference between your two organisations. Do you have similar procedures in place to deal with your members?

Alicia Dunne: Yes, we do.

Q157 Heidi Alexander: Have you forced members to give up membership of your organisation given concerns about their behaviour and suitability to be site operators?

Alicia Dunne: Yes, we have.

Q158 Heidi Alexander: How many?

Alicia Dunne: Two in the last 12 years.

Q159 Heidi Alexander: Alicia and Ros, do either of you publish information on your website where you name and shame some of the rogue operators? Is that something you would be prepared to do, or have done? All of you have expressed concerns about the bad practice within the industry, and obviously you have an interest in cleaning up the perception of that industry. As trade bodies, I am just wondering what you are doing to raise the bar in terms of the expected standards.

Ros Pritchard: When we have a membership termination it is published in our trade journal, which means that the industry is aware of that membership termination if it reads the magazine. We both have websites on which we list only parks that are in membership, so in terms of communication most of the magazines advise purchasers to check whether a park is in membership of either organisation. If there is no evidence that somebody is unscrupulous they will be in membership, because there is no reason they should not be. That does not mean they will always be good people, so you cannot provide a guarantee. It gives greater confidence and reassurance, but there are no guarantees.

Alicia Dunne: We have certainly published names, and also involved the Office of Fair Trading in one matter, and the individual eventually took notice of our action. They followed it up with their own investigations, which supported our action.

Q160 Simon Danczuk: We have heard, among other things, of scrapping the 10% sales commission; reducing pitch fees from RPI to CPI; charging a hefty licensing fee; and running the risk of increased fines. In terms of profitability, are you worried about what this Select Committee might recommend?

Malcolm Kent: If you recommended all those and they went through, we would probably have to look to sell our business because it would not be viable. Then you would have to ask yourselves: who would be the people looking to buy our business? They would probably be the people we are trying to get rid of.

Ros Pritchard: I would have to endorse everything Malcolm said. You must have an attractive business prospect to invite the right people in who want to run their business. The increased fines is about a deterrent. I do not think Malcolm or Katy would ever be facing the fines you are talking about, which is why it is so important that we get a sufficient level to provide a deterrent against this malpractice.

Q161 Simon Danczuk: But you also accept that it is not for the council taxpayer or the Government to fund the process of licensing of park owners. Is that right?

Ros Pritchard: Sonia mentioned earlier that home owners are paying twice. I pay council tax if I live in a park home. If I live in bricks and mortar, the council has provided the road outside my house and the public realm around my house. If I live in a park home they have not; I have paid the park owner for that. Therefore, I am paying the local authority for site licensing. We agree that the enforcement of site licensing varies very much according to the local authority-the number of parks in the area and also the personality and competence of the officers in the area. Frankly, some are frightened to go on the bad parks and so enforce against the good ones.

If you look at the consultation undertaken last year by the HSE-you do not pay for health and safety inspection-they looked at charging businesses in breach for interventions. So, rather than every good park owner who gets an inspection once every five years paying for it, why not have the deterrent that, where an inspector finds a breach and intervention is required by the local authority, the local authority should charge for it? That would make more sense than the council taxpayers, the home owners on the parks, paying the local authority and not getting site licensing in return.

Q162 Simon Danczuk: Your preference is that, instead of having a licence fee paid by park owners, they would pay if they contravened the licence fee agreements.

Ros Pritchard: Cost recovery from at-fault businesses makes sense. Make the people who are causing the problems pay for them rather than the good people running good parks and good residents. That makes sense to me.

Q163 Simon Danczuk: Do you think a local authority should be given the power to undertake emergency works if something is unsafe and then charge it back to the site owner? Are you comfortable with that?

Ros Pritchard: Yes.

Alicia Dunne: Yes, but also an order enforcing anything that they do, because it is about getting that point across, because so many things are not taken that far forward.

Q164 Heather Wheeler: Just for clarification, and without criticism-because it has been said quite a few times this afternoon-people who live in bricks and mortar on unadopted roads pay council tax and they do not get it either, so please do not use that as an excuse. Further, for people who live in park homes, council tax rating takes into account the value of the property. It will be at the lower end, won’t it?

Ros Pritchard: It tends to be A or B.

Heather Wheeler: Exactly.

Q165 Stephen Gilbert: And they also use other public services, such as roads, rubbish collection, and schools.

Ros Pritchard: It is more than just the road outside your house.

Q166 Stephen Gilbert: You guys have nothing to fear from the introduction of a fit and proper person test, have you?

Malcolm Kent: Nothing at all.

Q167 Stephen Gilbert: There is an absolute consensus.

Ros Pritchard: I think there is a cost to fear, and it has to be a reasonable cost. For example, we have argued strongly that you should separate the personal licence from the premises licence because you can have one person running several parks. It would be crazy to license him several times. Price comes into it to start off with. How is that price going to go up in the future? I think there are concerns. Mark Colquhoun, the detective inspector who worked on the Kingpin inquiry, said it would not work. So, we have nothing to fear, but if something has a cost it would be nice if it actually worked.

Q168 Stephen Gilbert: It has to be effective, so how would you make it effective? In your view, what would be the criteria against which a fit and proper person was assessed?

Malcolm Kent: I do not know how it would work. I would like to see the structure and talk through the practicalities of it, but I am sorry to repeat that if you have "fit and proper" are you going to enforce it against the bad park owners who are operating at the moment? If you are, we are 100% for it, but if you are to penalise the good park owner into becoming a fit and proper person with a large fee, it must be right across the whole ownership.

Katy Buswell: I endorse what Malcolm said. If there was a simple, straightforward answer to it, I am sure someone would have come up with it by now.

Ros Pritchard: I endorse what you have just said. Not only do you need an effective fit and proper person system, if that can be achieved, but also a practical safety net, because, whether it is asking everybody to jump the hoop to be fit and proper, or banning those who do not meet the standard of park operation, you do need the ability to ensure that the interests of those who reside on the park are protected thereafter, and that is a big hurdle.

Alicia Dunne: Absolutely. I do not think we can get away from the fact that there is a problem out there and we have to address it. As an industry we have supported it as a possible solution. It presents challenges. A fit and proper person test in other industries has run into difficulties. We cannot take action against parks in membership if there is an issue, but we do need to look at the practical difficulties. We have no legal enforcing powers, but perhaps there could be a centralised database or registration scheme for "fit and proper". We heard evidence earlier from Consumer Focus about a national scheme that provided transparency, monitoring of effectiveness and a remedy open to all. That is possibly a first step, but it is about proportionality and trying to catch the perpetrators.

Q169 Stephen Gilbert: All of you have talked a lot in different ways about the duties you have to your residents, lots of whom are over 50. Do you accept there is an added duty of care in those cases when you have very vulnerable and slightly older people on your sites?

Malcolm Kent: Definitely; that is the business we are in. We want to have a viable business. I have looked after older people for many years, and I am getting there fairly quickly. I would like to think that the staff on our parks do that. We employ people who have compassion. Inevitably, there are a few problems, but there is always someone our residents can call on.

Katy Buswell: Similarly, most of my residents know my personal home phone number. If there is a problem, I visit them in hospital; I help them to fill out their attendance allowance forms. We do whatever we can.

Stephen Gilbert: This is the problem of having the good guys with us in this session.

Chair: I cannot comment on future witnesses. Thank you all very much for coming this afternoon and waiting patiently while we had to go away and do other things. Your evidence is very worth while.