Park Homes - Communities and Local Government Committee Contents


Conclusions and recommendations


Scale of the problem of sale blocking

1.  We are clear that sale blocking is a serious problem in the park homes sector and that it needs to be prevented. (Paragraph 17)

Prevention of sale blocking

2.  While we welcome any change that reduces sale blocking, we are not convinced that the transfer of jurisdiction of complaints under the 1983 Mobile Homes Act to the Residential Property Tribunal (RPT) will make a significant impact on the problem. (Paragraph 20)

3.  We conclude that, removing a site owner's right to approve prospective buyers provides the only effective way to eliminate sale blocking. The existing approval process is unnecessary and it is rarely used legitimately. Given current experience there is a significant risk that any mechanism to provide site owners with the power to approve, or review, a sale through the RPT would be exploited to block sales, either by slowing the sale process down or by threatening its use. We recommend that the Government remove the site owner's power to approve buyers of park homes on his or her site. (Paragraph 24)

Immediate measures for the Residential Property Tribunal

4.  Sale blocking is an ongoing problem that blights the sector. Immediate action is required to deter site owners from exploiting residents and blocking sales. We recommend that Government bring forward a statutory instrument this session to enable the Residential Property Tribunal to award compensation and damages in cases where sales have illegitimately been blocked. If the Government is unable to do this, in responding to our report, it must set out why it feels unable to do so. (Paragraph 28)

5.  We conclude that the right of site owners to receive up to 10% commission from the sale of park homes on their sites should remain in place. Without this revenue pitch fees would have to rise. Furthermore, the commission provides site owners with an incentive to allow home owners to sell their homes on the open market. Without it, and in the absence of legislation to abolish the site owner's approval of buyers, incidents of sale blocking may increase. (Paragraph 31)

Fines

6.  We welcome the Government's proposal to increase the fines for breaching site licence conditions. To ensure that fines are an effective deterrent and can be proportionate in even the most extreme cases, we recommend that there be no upper limit on the fines that can be imposed. To ensure that these increases are an effective deterrent and are applied consistently the Government must ensure that the Sentencing Council's guidance for Magistrates is updated to reflect these changes and guide magistrates to impose fines in proportion to the scale of the offence that has been committed. (Paragraph 38)

Licence Fees

7.  It is clear that local authorities do not have the resources to monitor park homes effectively. The existing regime should be changed to provide local authorities with a funding source to resource adequately their park home licensing activities. (Paragraph 41)

8.  We conclude that the Government should allow local authorities to charge for their costs of issuing licences for park home sites. The legislation to enable them to charge should make a clear link between fees received and resourcing activity to license and monitor park home sites, to encourage more monitoring action across all authorities and encourage consistent performance. The legislation should also ensure that each licence is reviewed annually, so that the existing licence is updated, and it should introduce a fee for this so that authorities are resourced to carry out this function. We consider that site owners should be able to pass licence fees on to home owners but that this could only be done fairly if:

  • licence fees are linked to the number of pitches on a site. If they are not, residents on smaller sites would risk facing disproportionate pitch fee increases.
  • licence fees are not used to resource local authorities' enforcement action but only to cover the cost of administration, review and monitoring. Authorities should be able to resource their enforcement operations through a cost recovery model instead. (Paragraph 44)

Enforcement action and recovery of costs

9.  We recommend that the Government give local authorities a power to undertake works to ensure sites are safe and conform to licence conditions. This should reflect the existing Houses in Multiple Occupation licensing regime by providing authorities with a power to issue a notice to a site owner to require that works are undertaken and that, if such works are not undertaken, provide an authority with a power to undertake the works themselves. It should also ensure that authorities are able to recover costs from site owners for any work that is undertaken, including visits (both investigatory and confirmatory), investigative work and improvement works, when a site owner is found to be in breach of licence conditions. We further recommend that the legislation ensure that any of these charges or costs cannot be passed on to park home owners by site owners through pitch fees or by any other charge. (Paragraph 49)

A fit and proper person scheme

10.  We conclude that a fit and proper person test could be a useful addition to local authorities' armoury to exclude the worst offenders from owning and managing park home sites. (Paragraph 58)

11.  It is, however, clear to us that the introduction of such a test would require a significant increase in the regulation of the sector. The Government is confident that the reforms it proposes are sufficient to drive the unscrupulous out of the sector. We do, of course, hope that this would be the outcome from the Government's proposals but we must nevertheless conclude that, if the measures prove insufficient, the sector should not have to wait for further consultation and then an opportunity to legislate. On current projections that could be after 2020. This would not be satisfactory. We therefore recommend that the Government bring forward as part of the proposed legislation an enabling power to establish a fit and proper person test, which could be activated through secondary legislation, if required. (Paragraph 59)

12.  To ensure that the improvements it expects happen and are effective, we recommend that the Government undertake a comprehensive survey of the sector in three years' time. If the situation has not improved, we recommend that the Government use the power to introduce a fit and proper person scheme through secondary legislation. Under such a scheme it should be a requirement of the site licence to have a fit and proper person as site manager. Failure to meet this term would be grounds to revoke a site licence. We consider that a fit and proper person licensing scheme would work most effectively if it was coordinated at a national level so that information about owners could be shared between authorities. The Government should therefore be able to put in place arrangements for a body to carry out the function and it should be financed by a levy included in all licensing fees. The scheme could operate using similar criteria to those used to determine applications for consumer credit act licences, so that authorities would be able to consider the associations of a licence holder or applicant, in addition to those set out in the Government's 2009 consultation on park homes. The scheme could also include provisions for local authorities to take over the management of sites when licences were revoked and to compulsorily purchase sites, in extreme cases, when returning management of a site to the owner would not be possible. (Paragraph 60)

Defining Site Owners' Obligations

13.  We welcome the Government's proposals to clarify the obligations on site owners for maintaining their sites. This includes in particular the proposals in the consultation that define the maintenance works which must be undertaken by site owners as a statutory duty and cannot be included in pitch fee increases. We also welcome the Government's proposals to ensure that improvement works undertaken, to comply with licence conditions or enforcement action from the local authority, cannot be charged through pitch fee increases. (Paragraph 68)

14.  Because the problems associated with agreements between site owners and home owners are so widespread, and as primary legislation may be years off, we recommend that the Government enact changes, to clarify the obligations on site owners to maintain sites, through secondary legislation this session. (Paragraph 69)

15.  We welcome the Government's proposal that site owners should be required to deposit site rules with a licensing authority as this would ensure that residents on a park have access to an authoritative version of the rules governing their site, which both they and the site owner had to follow. We recommend that only those rules in the deposited set with the local authority will be capable of enforcement against a home owner. We also recommend that abiding by the site rules deposited with the authority become a requirement for every site owner under the site licence conditions. This would provide the local authority with an enforcement power to intervene when a site owner breaks site rules (for example, if they rented out properties to tenants under the age stipulated in the rules), and that this would provide stronger sanctions to deter such actions. (Paragraph 72)

16.  We recommend that the legislation allow site owners to change the authoritative version of the site rules providing:

a) site owners give park home owners on the site notice in writing at least 28 days before the changes are due to take effect;

b) if at least a third of the park home owners request a meeting, the site owner arrange a meeting which all occupiers are invited to attend to consider the proposals; and

c) at the meeting a majority of park home owners have to endorse the proposed rule changes.

We further recommend that purported changes to site rules that fail to follow the process required by statute have no force and that any attempt by a site owner to enforce such a rule be treated as a breach of the site licence. (Paragraph 73)

17.  We recommend that the 'implied terms' are amended so that home owners are required to provide prospective buyers with a copy of the site rules. (Paragraph 74)

Pitch Fee increases

18.  We recommend that the maximum annual increase in pitch fee increases be calculated in accordance with the rate of increase in the Consumer Price Index, to create a fairer link between home owner incomes and pitch fees. (Paragraph 77)

Publicity and awareness of obligations

19.  We recommend that the Government promote an awareness campaign to make residents, local authorities, site owners and other parties aware of the regulatory regime and changes to be made to it. This campaign must encompass the park home trade bodies, estate agents, local authorities, the Local Government Association, police authorities and the legal profession. Park home residents as a group appear particularly unaware of the regulatory regime and are more than usually susceptible to mis-selling or being taken advantage of by unscrupulous owners. (Paragraph 81)

20.  In addition, we recommend that the Government amend the 'implied terms' in the park home owner's agreement to provide that before selling his or her park home the seller must advise a prospective buyer to seek qualified legal assistance to help with transferring and explaining an assignment of the park home. In addition, all purchasers must confirm in writing to the seller and the site owner that they have received and read the written statement and site rules. (Paragraph 82)

Conclusions

21.  Legislation is urgently needed and while some useful improvements can be achieved through secondary legislation this session—and we set these out in our report—primary legislation is urgently required to overhaul the park home sector, especially to stop sales blocking and to put licensing on a firm footing. We therefore recommend that a comprehensive package consisting of the measures we have set out is brought forward by the Government. We further recommend that a bill reforming the park home sector be given a slot as soon as possible in the Government's legislative timetable and that priority is given to assist the department in drafting this legislation. (Paragraph 86)



 
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Prepared 20 June 2012