By Ibraheem Dulmeer, LEASE Legal Adviser, and John Clement, a partner and head of Turbervilles’ Litigation and Dispute Resolution team
This article was first published in Park Home & Holiday Caravan Magazine, December 2014.
On 26 May 2013 the Government introduced a new procedure that must be followed whenever a used residential park home is bought or sold on a site in England. One of the main reasons for this change was to take the process out of the control of the site owner, as there were concerns that some park owners had been unfairly trying to prevent home owners from selling their homes. The new procedure is intended to give occupiers greater protection.
One effect of this is that both buyers and sellers of park homes now have much more responsibility to ensure that the transaction is completed properly. If any mistakes are made this could lead to the assignment of the agreement being unlawful, and to costly disputes between the parties.
What is different about buying and selling a park home?
It is important to remember that whenever someone sells their park home on a residential park there are actually two transactions which happen at the same time – the sale of the park home itself, and the transfer (‘assignment’) of the seller’s Mobile Homes Act occupation agreement to the buyer.
I bought my park before 26 May 2013, and now want to sell it. Is there a procedure that I must follow?
Yes. As your agreement commenced before 26 May 2013, and if it has not been assigned or transferred since 26 May 2013, it is defined as an ‘Existing Agreement’ and the following procedure must be used:
Once a price for the home has been agreed between the seller and buyer, the seller must provide the buyer with a form called a ‘Schedule 1 – Buyer’s Information Form’, together with copies of certain key
The form and other documents must be supplied to the buyer at least 28 days before the date when completion of the sale of the home is to take place, unless the buyer has agreed to a shorter period.
The key documents that must be sent include:
- A copy of the seller’s Mobile Homes Act
- A copy of the current park rules;
- Written details of any charges payable in respect of electricity, gas, water, sewerage or other services supplied to the park home, including when these charges are payable and when they are next due for review;
- Written details of any other charges relating to the home or the park, including any charges for the use of a garage, parking space or outbuilding;
- A copy of any current warranty for the home;
- A copy of any structural survey of the home, the base or the pitch which the seller has had carried out in the previous 12 months.
If the seller is unable to provide any of the documents mentioned above, they must provide a written explanation as to why this is the case.
The buyer and the seller must both complete a ‘Schedule 2 Notice of Proposed Sale Form’, and the seller must then send this form to the site owner at least 21 days before the proposed completion date. This form tells the site owner that the seller intends to sell their home, and transfer their agreement to the buyer.
If the park owner wants to object to the proposed sale and assignment they must apply to the First-tier
Tribunal (Property Chamber) (‘Tribunal’) for an Order to prevent the sale going ahead, and must notify the seller that they have done this, within 21 days of receiving the notice. The site owner can only object to the sale if the buyer (or someone who is intending to live with the buyer) does not meet any minimum age rule on the park, wants to keep any animals of a type which are not allowed, wants to keep vehicles of a type which are not allowed on the park, or wants to park more vehicles than the maximum
number allowed under the park rules.
If the site owner has not applied to the Tribunal within the 21 day period, then the sale can go ahead on the agreed date. On the day of completion the buyer and the seller must both complete and sign a ‘Schedule 4 Assignment Form’ to transfer the occupation agreement to the buyer. The buyer and seller should both keep a completed copy of the form. On completion the buyer must then pay the seller 90 per cent of the agreed sale price, holding back the remaining 10 per cent for the commission payable to the site owner.
Within seven days of completing their purchase of the park home the buyer must complete and send to the site owner a ‘Schedule 5 Notice of Assignment’, which must tell the site owner the name of the buyer(s) and the names of anyone else who intends to live in the park home with them, the date when the agreement was assigned, the price paid for the park home, the amount of commission payable to the site owner, and the seller’s forwarding address.
After receiving the Notice of Assignment the site owner should tell the buyer the details of the bank account where they want the commission to be paid – the buyer must then pay the commission to the site owner within seven days of these details being provided.
What if my park home agreement started after 26 May 2013?
If the occupation agreement commenced after 26 May 2013, or started before that date but has been assigned since 26 May 2013, it will be a ‘New Agreement’. In that case, the buyer and seller should
follow all of the steps set out above except for steps 2 and 3, as the seller under a New Agreement does not need to give any prior notice of sale to the site owner.
What if I want to gift my park home?
Where the park home owner wants to give their park home to a member of their family they must follow the procedure set out above (depending on whether the agreement being transferred is an ‘Existing’ or a ‘New’ agreement), except that rather than using the Schedule 2 Notice of Proposed Sale form for an Existing Agreement the park home owner should instead send the site owner a ‘Schedule 3 Notice of Proposed Gift’ form.
The site owner is entitled to ask the park home owner for proof that the proposed donee is a member of the donor’s family. There is also no commission payable to the site owner on a gift of a park home.
What about sales by the site owner?
The procedures set out above do not apply where someone is buying a park home direct from the site owner.
Where can I get these forms?
All of the prescribed forms referred to in this article can be downloaded free of charge from the Forms section of this website.
What should I do next?
Although using professionals such as solicitors and surveyors is not compulsory for park home transactions, both the Government and LEASE strongly recommend that (as with any property transaction) it is always advisable for buyers and sellers to seek their own specialist independent advice before deciding whether or not to proceed. This can give both sides peace of mind, as well as highlighting any potential problems at an early stage.