By Ibraheem Dulmeer, LEASE Legal Adviser, and Cassandra Zanelli, partner at Taylor and Emmet
This article will be published in Park Home & Holiday Caravan Magazine, February 2015.
A pitch agreement is essentially a contract which sets out a number of obligations and responsibilities between a site owner and a park home resident. The terms of this agreement state the amount of the pitch fee and when it is to be paid to the site owner. In some instances the pitch fee includes utilities but where this is the case, it should be outlined clearly in the pitch agreement.
Is there a certain way a pitch fee review has to be undertaken?
On 26th July 2013, the government introduced a prescribed procedure a site owner must follow in order to increase a pitch fee. The pitch fee has to be changed by:
- The site owner serving a notice to inform the park home resident of the change/increase; and,
- The notice outlined in “1” must be accompanied by a pitch fee review form (or a form substantially to this like effect).
How often does a pitch fee review happen?
The pitch fee can be reviewed or changed annually on or after the review date stated in the contract. Therefore it is important to note that a review cannot happen more than once a year.
What happens if the pitch fee review form is not served?
If the pitch fee review form is not served, it will not be possible for the site owner to increase the pitch fee.
Can the pitch fee be reduced in any one year?
It is possible for a reduction in the pitch fee to take place. In these circumstances there is no obligation for the site owner to use the pitch fee review form, but it may be best practice for them to do so.
What happens if the pitch fee review form is not served?
It is a prescribed form to use when reviewing pitch fees. The form is eight pages long and it includes a formula which is used to calculate the fee. The explanatory notes provide guidance on how it should be calculated.
When must the pitch fee review notice and pitch fee review form be served?
Both the pitch fee review notice and the pitch fee review form must be served at least 28 days before the review. For example, if the review date is 1st April 2015, the documents should be served by 4th March 2015.
Can the review notice be sent late?
A late review may take place at any time after the review date. But, it is still necessary to give 28 days’ notice before the review. For example if the review date is 1st April 2014, the review could instead occur on 1st July 2014, provided notice is served by 2nd June 2014.
Does a late review change the review date for next year?
The date of the review the following year will not be changed. In the example above, if the review is on 1st July 2014 due to late service of the pitch fee review form, the next review will remain as being on 1st April 2015.
How is the pitch fee review calculated?
As described above, the pitch fee review form outlines a formula by which the pitch fee can be calculated. The calculation of the fee takes into account the following: current pitch fee adjusted by the Retail Prices Index (“RPI”), any recoverable costs and any relevant deductions.
What else can be included in the pitch fee review?
From 1st April 2014, it is possible for local authorities to charge for a site licensce annually. The annual license fee may be recovered through the pitch fee, divided pro-rata. This is a one-time, permanent addition to the pitch fee. Any subsequent licence fees paid by the site owner cannot be passed onto the residents.
How is the RPI figure calculated?
It is calculated by using the last figure that was published, 28 days before the review date. For example if the review date is 1st April 2014, the latest RPI figure prior to 4th March 2014 will be used. The official RPI figure can be found on the Office of National Statistics website.
What recoverable costs can be recovered by the site owner?
It may be possible that the costs of improvements are included in the pitch fee review. However, before the site owner can pass on these costs, certain conditions must have been satisfied. . There will need to be consultation on the improvements which should be for the benefit of the residents, and costs can only be passed on if the majority of residents do not disagree in writing.
What deductions can be taken into account in the calculation?
A deduction may be taken into account only if the deterioration or reduction has occurred since 26th May 2013 and has not been taken into account in a previous pitch fee review.
What happens if resident disagrees with the pitch fee increase?
Either party may wish to make an application to the First-tier Tribunal (Property Chamber) (“Tribunal”). If the Pitch Fee Review Form was served at least 28 days before the review date, an application may be made by either party no later than three months after the review date.
If there is a late review, an application to the Tribunal will need to be made no later than four months after the date that the site owner serves the notice.
Does the park home resident have to pay the proposed increase?
The park home resident is not obliged to accept the proposed increase outlined in the notice. Therefore failure to pay the new pitch fee will not result in the park home resident being in arrears. It is important to pay the current pitch fee however, so that there are no “arrears”.
Can the Tribunal be involved and in what circumstances?
If the resident does not accept the increase, there is no obligation to notify the site owner.
If no agreement has been reached on the new pitch fee then the site owner or the park home resident may make an application to a Tribunal for a determination. This is done by using Form PH13 or PH9. Please read the notes contained in these forms carefully if you are completing these yourself.
Where are the forms mentioned in this article found?
The forms referred to in this article are available on the LEASE park homes website.