30 January 2014
Mobile Homes Act (2013)
1.Introduction
Welcome to Westminster, thank you for all you that you are doing in promoting and playing such an important role in the UK tourism industry.
I see this at first hand in my own Waveney constituency in North Suffolk, where we have the dual attractions of a unique coastline, itself under threat in the current weather, and the Broads.
Waveney and Lowestoft are home to several holiday and indeed mobile home parks as well as a wide variety of tourism industries including Hoseasons and my own Association chairman May Reader who runs the Heathlands Beach Holiday Park in Kessingland. Her husband Bernard is a past local chairman of the BH&HPA.
The importance of the home tourism sector came home to me forcefully in the Spring of 2012 when in the Budget the Chancellor announced his proposal to introduce standard rate VAT on the sale of holiday home caravans.
Virtually as he had sat down having delivered his budget speech, my phone was red hot with calls from back home from businesses large and small pointing out how serious a threat this was to the industry. You will hear later from Graham Stuart, the leader of the successful campaign not to proceed with this proposal. I was pleased to be a foot soldier in the strong force that he assembled to oppose it.
At this stage, I shall make an apology to Ros. She arranged the business programme for this Conference many weeks ago. Normally, Thursdays in Westminster are quiet days; the business tends to be non-contentious and many MPs depart early for their constituencies.
This is not the case today. The business of the Commons suddenly changed last Thursday and we are currently debating the Immigration Bill, which is subject to a strict 3 line whip for all parties.
Votes may come at any time and it is possible that I might suddenly need to leave to vote.
The Mobile Homes Act (2013) was a Private Member’s Bill, which I took through the House of Commons.
At the beginning of each session of Parliament, backbench MPs enter a ballot for the right to promote a Private Member’s Bill.
In May 2012, I was drawn fifth out of twenty successful MPs in this ballot.
Why did I choose park homes for my Bill?
There are two reasons:-
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It was an issue on which I had some knowledge based on my own constituency experiences where there are five park home sites, and also my work as a chartered surveyor before I was elected to Parliament in May 2010.
I should emphasise that in Waveney my experiences of the sector are largely good. Four of the parks are well run and the site owners and the residents have a good working relationship.
On the other, the situation is not so good. No meaningful repairs or improvements have been carried out for 15 to 20 years and the site owner changes the lay-out of the park on his whim without any consultation with the residents and gives very little notice of any such works.
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From the moment my name came out of the ballot, I received calls from Members of both Houses of Parliament and from all parties, including the then Housing Minister Grant Shapps, urging me to sponsor a mobile homes bill. They all brought to my attention horrific experiences of the bullying, intimidation and thuggery that some residents had to endure. These concerns were re-enforced by the subsequent letters and emails that I received from all around the country and also from what I was told when I attended park homes roadshows.
I remember one of my colleagues taking me to one side just after I had announced my decision. He said – “Peter a word of warning, you need to watch your back. There are a number of very unpleasant people in this industry”. I should point out that I have not experienced such a problem, I should emphasise that none of these people are here today and it is in many ways regrettable that legislation has to come forward in response to what is the lowest common denominator; the few bad apples in the barrel.
The park homes sector which started after the last war, was perhaps seen as a temporary solution to the post-war housing crisis that would disappear once the Macmillan Government had provided homes for all it has in fact proved remarkably resilient and enduring and is still going strong.
A significant industry has grown up around it. In my own constituency, moving to a park homes site is very much an attractive option for many people; an opportunity to buy an affordable home in an attractive coastal or rural location on a well run park. It provides many with the opportunity to release capital to supplement pensions that may not be yielding the income that was once expected.
It once did strike me that in a sector where large sums of money are changing hands when park homes are sold, the lack of a proper regulatory framework did mean that not only could the sector prove attractive to those “bad apples”, the rogue site owners, it was a broke on growth and further investment.
It was against this background that I set about taking the Bill through Parliament.
I received great support from the Civil Servant team at the Department for Communities and Local Government who did the real hard work in drafting what was for a Private Member’s Bill, not a completely straight forward piece of legislation. It was a fascinating experience and there were plenty of twists and turns along the way.
I should give special thanks to Ros and the BH&HPA for the approach that you have adopted to the legislation. I recognise that for you, the responsible park home owners (the good apples), it’s not been easy and this can in many respects be seen as an unwanted piece of bureaucracy. Ros has put forward your case strongly but in a measured and well-reasoned way.
Once the Bill received Royal Assent, she has worked with Government to ensure that it is implemented as smoothly as practically possible.
What I shall now do is outline the reasons why it was necessary to bring forward legislation, set out what the Act does and then provide some feedback as to how it is going down.
I should also emphasise that whilst I am a Conservative MP and a supporter of the Coalition, I am not a member of the Government and I do not speak for them. I can tell you what feedback I have received from them, though in many respects, what I am say is very much my own views and thoughts.
2.The Problem
It is only in recent years that problems have emerged in the park homes sector. In summary these are threefold:-
a) Sale blocking
Firstly, there has been the problem of “sale blocking” with unscrupulous site owners taking advantage of the rule that permitted them to approve a buyer. In many cases these rogue operators in effect blocked sales by making contact with purchasers to put them off from proceeding.
With home owners being unable to sell their properties, site operators then offered to purchase them at a fraction of their real value and then they sold them on either at their full market value or they replaced the home with a brand new one and sold that on at a substantial profit. I am aware of one case where a park home worth £85,000 was bought by the site owner for less than £5,000.
Allied to this practice some unscrupulous site owners were making and changing the rules to prevent home owners from selling their homes. For instance they might require buyers to attend interviews, they prevented sale boards being put up on the pitch and they insisted on structural surveys carried out before approving a sale.
b) Licensing
The second problem has been with licensing in that some operators were neither maintaining nor complying with site rules, with home owners and local authorities being powerless to do anything about it. There have been examples of some operators only maintaining that part of the site from where they marketed homes for sale or refusing to spend money to keep sites safe.
The previous licensing regime was unable to address such problems because local authorities lacked the resources to do so and could not charge fees or recover their costs.
In addition, local authorities could not require improvements to be made to sites and were only able to prosecute for breach of a licencing agreement and when they did so the maximum fine that the magistrates could impose was only £2,500.
c) Pitch Fees
The third problem was the lack of transparency with regard to pitch fees with some site operators receiving guaranteed pitch fee income regardless of the condition of the site, with homeowners being charged increases above the Retail Price Index without any explanation as to how the charges were made up.
3.What the Act Does
The 2013 Mobile Homes Act seeks to address these problems in four ways:-
a) Firstly, as from 26th May 2013 the Act gave residents greater protection by making it less onerous for them to prove a case of harassment and by creating an offence of giving false or misleading information about a park home. Both these measures are designed to combat sale blocking by either intimidating residents or lying to prospective purchasers.
b) Secondly, the Act seeks to ensure that site owners respect the rights of residents. It does this in various ways:
– It removes the requirement that the site owner must approve the purchaser when a resident wants to sell their home. Existing [but not new] residents need to notify the site owner of their intention to sell and the site owner can apply to a Residential Property Tribunal for an order blocking the sale on certain grounds.
-The Act also provides that certain site rules, not related to site management, are banned, such as those that aid sale blocking. All other rules are to be re-made in consultation with residents.
-There is also the introduction of greater transparency when pitch fees are reviewed. This includes a requirement for the site owner to use a statutory modification form so as to prevent excessive and unlawful charges being imposed.
c) Thirdly the Act gives local authorities new licencing and enforcement powers. These come in to effect from 1st April.
-They allow councils to charge for their licensing functions. This includes levying an annual fee for the administration and management of licenses. Up to now, local authorities have had no power to charge in connection with their duty to license sites.
-Local authorities are permitted to serve notices requiring site owners to carry out works to the site so as to comply with the license obligations and to carry out work in default or in an emergency. Previously the local authorities had no power to require works to be done.
-Councils are also now allowed to recover their costs in connection with enforcement action.
-The fines for licensing offences have been increased and now can be unlimited. Where offences are committed by a company or another corporate body the courts are now permitted to punish its officers as well as the company.
-Councils are now able to refuse to transfer or grant licences on change of ownership of the site unless the council is satisfied that the arrangement is bona fide and certain conditions have been met. Previously councils had to grant a new license or transfer existing ones if there was a change of ownership of the land.
d) The fourth and final thing that the Act does is that it enables even stronger powers to be introduced if necessary by enabling the local authority to decide if the site owner is a ‘fit and proper person’ to manage a site, having regard amongst other things to relevant criminal convictions. This provision will only be introduced if the other provisions of the Act do not work. There would first be a consultation and secondary legislation would be required.
4. The Way Forward
It should be emphasised that the implementation of the licensing provisions of the Act this April is not the end game. It is one step in raising standards in the sector. This is work that will not be completed overnight.
Alot remains to be done and the Government assure me that they are continuing to liaise and work with all interested parties so as to ensure that the Act is fully understood and properly applied.
A review of the effectiveness of the legislation will be carried out in 2017/18 to see if it has fulfilled its objectives.
At that time, Ministers will decide whether further measures are needed, such as the “fit and proper person” test to which I have just referred.
If it is necessary to go down that route, then as I mentioned a full consultation would be carried out.
I should emphasise that at this time the feedback which I’m receiving from the Government is that they do not anticipate that such an expensive and bureaucratic system will be needed and they are hopeful that the Act as it stands will achieve its objectives.
There has been some feedback as to how the Act is going down. Concern has been expressed that people are selling their homes without consulting the site owner at all. I am also aware that the BH&HPA have passed on concerns about people moving in and not complying with the site rules. The information which I have received from the DCLG is that this has only happened twice since last May. They do not see it as a significant problem as the site owners do have the option of taking the home owners to court.
There have also been concerns with regards to pitch fee reviews as to whether it is really necessary to fill in an 8 page form. The recording of such information is important so as to increase transparency and fairness in the sector but if the form is complicated and you think that there are ways in which it can be improved then let the Government know.
Some of you may have a worry that the legislation could be extended to holiday sites. I am aware that the Law Commission have stated that they would like to carry out a review of legislation in this area and that there have been Written Parliamentary Questions regarding regulation of the holiday sector and a call for an investigation into its practices.
I understand that the Government’s response, with which I agree with, is that on holiday parks residents already have the benefit of consumer contract regulations which set out their rights and thus there are no current plans to introduce such regulation.
Going back to Park Homes it is appropriate to consider whether the legislation has been effective in eliminating rogue operators.
It is probably too early to reach a conclusion on this and it will be necessary to have the whole package in place as from 1st April and operating for some time before a proper assessment can be made as to how effective it is being.
As already mentioned the DCLG will carry out a comprehensive review of the sector in two years time and they will assess whether further regulation is required, as to whether a “fit and proper person” test should be introduced. They will take stock of all the evidence.
I understand that the current view is that the Mobile Homes Act (2013) on its own should be sufficient to achieve its objectives.
Other feedback that I have received is that the introduction of Tribunals has been successful in that it has introduced more professionalism into the sector.
Likewise the work done by the Leasehold Advisory Service (LEASE) in providing information and advice about the Act appears to have been well received by site owners and residents.
The DCLG have set up a site licensing working group that will liaise with local authorities. It has the objective of introducing good practice for their new work in licensing and setting fees on which they start on 1st April.
It is acknowledged that more work needs to be done with the legal sector and there is a need for solicitors and estate agents to work more closely together. It is the Government’s intention to work with the Law Society to make sure that solicitors have a better understanding of the respective rights of site and home owners.
The Mobile Homes Act (2013) is the biggest shake up in the sector for 30 years. It will take several years for it to settle down; to be implemented fully and properly. Work remains to be done to ensure that all parties are fully aware of their rights and obligations.
It is important that local authorities should only pursue a policy of enforcement if one of co-operation has not worked and they should understand that they have a role to play in tackling harassment as provided for in the Caravan Sites Act [1968].
There is the challenge of engaging with site owners and residents and whilst leaflets have been distributed on a wide basis, many residents still claim they have not heard of the Act.Some still complain about pitch fees and the 10% commission, though overall feedback from residents has been positive and they welcome the Act.
5. Conclusion
In conclusion, thank you for all you are doing generally in working in a great British Industry.
For those of you operating park homes, thank you for your understanding and cooperation. I am acutely aware that whilst legislation is often needed to tackle a particular problem, it can be a blunt instrument that effects others who are running their businesses responsibly and fairly.
This is the beginning, we need to work together – you elected representatives such as myself and Government to get the legislative framework right and working properly. If we do so, this realatively small but important sector of the housing market can expand and bring further benefits to all; home owners, site owners and manufacturers and all those working in the industry’s supply chain.
