By Richard Hand and Ibraheem Dulmeer
Since 1st April 2014, local authorities have been able to charge a site owner an annual fixed site licence fee (ALF). This applies to ‘protected sites’ i.e. ones that do not have any restrictions on the times of year when the site can be occupied or that are exclusively for holiday use only.
The local authority must prepare and publish a fees policy before imposing an ALF. Site owners can recover the ALF by adding it onto the pitch fee so that it is paid, pro-rata by park home owners. It then becomes an integral part of the pitch fee which is usually increased by the RPI each year.
It had been understood that under the implied terms to the Mobile Homes Act 2013, site owners could only take into account an ALF at the time of the first pitch fee review after the law had changed, in this case a period between 2 April 2014 and 1 April 2015.
Unfortunately, some local authorities were unable to publish their fees policy in good time, so could not impose the ALF in the first year but did so in later years. This meant that some pitch fee reviews to recover these licence fees fell after 1st April 2015.
This begs the question: is a review after 1st April 2015 invalid for the purposes of recovering the ALF as part of the pitch fee?
Clarification of the legal position
The Upper Tribunal (Lands Chamber) have now clarified the issue, by issuing two related decisions in the cases of Vyse v Wyldecrest Parks (Management) Ltd  UKUT 24 (LC) and Wyldecrest Parks (Management) Ltd v Kenyon and Others  UKUT 28 (LC).
In the Kenyon case, the local authority was slow in issuing the fee charging policy and in invoicing the site owner for the ALF. The site owner wanted to add it to the pitch fee anyway. The residents applied to the First-tier Tribunal (Property Chamber) (FTT) who ruled that the fee contribution could not be added to the pitch fee because it was after 1 April 2015. The park owner appealed to the Upper Tribunal (Lands Chamber) (UT).
The UT determined that the ALF could be included in the pitch fee because the delay in invoicing the site owner was the fault of the local authority.
In Vyse, the local authority increased the ALF from £200 to £300 in the second year because the site was reclassified as of a higher risk. The park owner wanted to add this increase to the pitch fee. The residents disputed this for two reasons:
- they relied on the implied term in the Mobile Homes Act 2013 that the ALF contribution could only be added to the pitch fee in the first year; and
- the increase was for problems with compliance with licence conditions and therefore a problem with site management and not the fault of the residents.
The site owner applied to the FTT who did not allow the increase but said that the licence fee contribution could be considered separately from the pitch fee. The site owner and the residents both appealed to the UT.
The UT decided that: the starting point for a pitch fee review is the RPI but also allows other ‘weighty’ factors to be considered unless it would be unreasonable to do so; The pitch fee is a composite fee and the components should not be treated separately; The UT felt that it would be unreasonable to say that any changes in the site licence fee could never be passed on to the residents.
In Vyse, however, the increase in ALF was not allowed as it was considered the increase was related to the management of the site.
Important points to take away
- Kenyon illustrated the situation where the local authority did not publish a fees policy before 01 April 2015 thus denying the site owner the chance to add the ALF to the pitch fee. It was held it was not the site owner’s fault that the local authority had delayed proper implementation of the site licence legislation. Therefore the site owner could incorporate the fee in a subsequent pitch fee review.
- Vyse, confirms that:
- the starting point for a pitch fee review is the presumption that it will only rise/fall by RPI, unless rebutted by other weighty factors
- The components of the pitch fee should be considered as a whole and not separate items so RPI will also apply to any ALF component and
- that where the ALF was already incorporated in the pitch fee but was then increased in subsequent years, the increase can only be added to the pitch fee if it is reasonable in the circumstances to include it.