Park Homes Advice

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Upper Tribunal decision re administration charges on utilities

Date added: 15/4/14

By Chris Humphreys & Ibraheem Dulmeer

On 29th October 2013 the Upper Tribunal (Land Chamber) determined a mobile/park homes case for the first time in the case of Britaniacrest Limited.

This determination is particularly important as it deals with whether, in addition to a pitch fee, occupiers of mobile/park home pitches are liable to pay the site owner (Britaniacrest Limited) separate charges to cover the cost of meter reading and/or other administrative tasks in connection with the supply of utilities to pitches.

Background

Britaniacrest appealed a 4 December 2012 decision by the Residential Property Tribunal (“RPT”). The issue was whether, in addition to a pitch fee, the occupiers of mobile home pitches at Broadfields Park (the Park) are liable for separate administration charges relating to the provision of (a) gas, (b) electricity and (c) water.

The Upper Tribunal case considered whether the RPT was correct to decide:

“That administration charges in respect of the provision of utilities were not payable by the occupiers and that sums previously demanded and paid should be credited by the appellant to the occupiers’ accounts.”

The brief facts

The Park receives metered supplies of gas and electricity which are distributed to the individual pitches, each of which had its own separate sub-meter (although some occupiers had not connected their homes to the gas supply). The Park also receives its own metered supply of water; however this was not separately metered to individual pitches.

The decision

The Upper Tribunal found that the administration charge for electricity had been levied “arbitrarily” and “totally without justification or validation”. Similarly, there was no justification for the administrative charges for gas.
In the case of water, because the parties has agreed to such a payment, the Upper Tribunal found it was wrong for the RPT to rule on this. Such reasonable supplement or surcharge to cover the cost of administration for the supply of water was restricted following the introduction of the Water Resale Order 2006.

The written statement for this particular park home at Morecambe in Lancashire included a paragraph where the occupier agreed:

“To pay and discharge all general and/or water rates which may from time to time be assessed charged or payable in respect of the mobile home or the pitch…in respect of electricity, gas, water, telephone and other services.”

The Upper Tribunal looked at the express terms of the written statement. The written statement terms in this case do not entitle the Park owner to require payment of administration charges in respect of any of the utilities which are in dispute. Therefore it was found that the RPT was correct in determining that the cost to the Park owner of administering the utilities was included in the pitch fee.

With regard to the terms implied into the agreement by the Mobile Homes Act 1983, (Amendment of Schedule 1) (England) Order 2006), paragraphs 21 and 22, these terms did not provide for the payment of such administration charge. Although it stated that the occupier shall pay to the owner all sums due under the agreement in respect of gas, electricity, water, sewage or other services supplied by the owner. The owner at the occupiers request should provide documentary evidence to support any charge.

It was made clear in this determination that a “court has no power to improve upon the instrument which is called upon the construe…”, instead “it is concerned only to discover what the instrument means”. Therefore it was found that it is impossible to accept that the written statement has the effect of requiring occupiers to make further payment to the Park owner to reimburse costs incurred in relation to the provision of utilities.

However, in this case by way of compromise, the parties agreed that a charge can be collected for administering the arrangement of the supply of water, which is to be the maximum sum that the Water Resale Order 2006 permits. It is clear from this determination by Martin Rodger QC that in the absence of such compromise in relation to water administrative costs; there would be no additional administrative charge payable by the occupier of the park home.

Future implications

The implied terms will not be interpreted to allow for the recovery of administration charges for the provision of utilities. It is therefore implied that these should be included in your pitch fee if there are no express provisions to this effect.

It is important to note whether the express terms of the written statement include the mention of an administrative charge for utilities. There would need to be an express term that is sufficiently clear on this in order to be successful.

Potentially, park home owners may agree to pay administrative charges for the provision of other utilities, if and only if these charges are:

  1. justified and supported by documentary evidence,
  2. agreed by the parties, and
  3. compliant with the legislation such as the Water Resale Order 2006 and limitations imposed by OFGEM under s.44 of the Electricity Act 1989.

Before entering into a written agreement, it is advisable to seek independent legal advice to ensure that the ramifications and implications are absolutely clear.

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