Clause 10 - Implied terms: removal of requirement for site owner consent to sale or gift

Mobile Homes Bill – in a Public Bill Committee at 2:15 pm on 27th November 2012.

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Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest 2:15 pm, 27th November 2012

I beg to move amendment 2, in clause 10, page 19, line 11, at end insert—

‘(2A) Paragraph 7A(2) shall not apply if the occupier of the mobile home is on a site where—

(a) there is a residents’ association with members drawn from a majority of the mobile homes on the site; and

(b) the residents’ association has determined that instead of the provisions of paragraph 7A(2) sub-paragraph (2B) shall apply.

(2B) Any person to whom the occupier intends to sell the mobile home or to assign the agreement shall be approved by the site owner whose approval shall not be unreasonably withheld.’.

Photo of John Robertson John Robertson Labour, Glasgow North West

With this it will be convenient to discuss amendment 1, in clause 10, page 20, line 35, at end insert—

‘(11) Paragraph 7B shall not apply if the occupier of the mobile home is on a site where—

(a) there is a residents’ association with members drawn from a majority of the mobile homes on the site; and

(b) that residents’ association has determined that instead of the provisions of paragraph 7A(2) subparagraph (2B) shall apply.

(12) Any person to whom the occupier intends to sell the mobile home or to assign the agreement shall be approved by the site owner whose approval shall not be unreasonably withheld.’.

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

I begin by giving the apologies of my hon. Friend the Member for Christchurch, who joined me in tabling these amendments and is sincerely sorry that he cannot be here in person.

The rationale behind the amendments is to enable the Committee to look at the practical effect of clause 10, with which, of course, I entirely agree. I do not challenge for one moment any of the provisions set out in the clause. The intention behind the clause and the Bill in general, and that of everyone in the Committee and the House who has supported the Bill—I have not found anyone who does not support it—must be to stop the bad behaviour of unscrupulous park home owners. We have all heard appalling stories of the bad behaviour of such people who block the sale of homes. In doing so, they often force a sale to themselves or their associates for small sums that do not reflect the home’s true value. I entirely agree that that practice has to be the main target of the Bill.

Amendments 1 and 2 would add a further layer of action by giving powers to residents’ associations—in proposed new paragraph 7A(2B) of schedule 1 to the Mobile Homes Act 1983—where they truly represent the majority of residents who live on a particular park. Where the association has determined that there should be a further condition, as set out in amendment 2 in proposed new sub-paragraph (2A)(b), then the following, which is in proposed new sub-paragraph (2B), should apply:

“Any person to whom the occupier intends to sell the mobile home or to assign the agreement shall be approved by the site owner whose approval shall not be unreasonably withheld.”

I appreciate that that provision would give some power back to the site owner, and the reason for my giving the Committee the opportunity to add a further layer to the clause is that parks are not like housing estates or roads in a residential community. They are truly community places, and there must surely be a role for the people who already live there to have a say in who might move to the park in the future. Just as there are unscrupulous people who own and run parks, so there are potentially unscrupulous or undesirable people who might wish to own and occupy park homes.

Photo of Chris Ruane Chris Ruane Opposition Whip (Commons)

Can the hon. Lady give an example of the type of person to whom she is referring?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

I hesitate to give a specific example, if the hon. Gentleman will forgive me. Having been aware of the situation in the two parks in my constituency, I realised when looking at the intricacies of the Bill that, until a few weeks ago, I had not looked more widely into what was happening in other parts of the country, except during meetings of the all-party group on mobile homes. I hear from those at the park homes in my constituency that, before the unscrupulous owner in Epping Forest took over the park, the residents’ association and the manager of the park used to have a say in who would come to the park, to ensure that they were the sort of people who would fit in and behave properly. I appreciate that such conduct cannot always be predicted, but it is the background to the Bill.

Photo of Natascha Engel Natascha Engel Chair, Backbench Business Committee, Chair, Backbench Business Committee

The Bill was originally drafted to be a positive form of social engineering, so that park owners had the power to ensure that the right type of people lived on the sites, such as those over 50. Would the amendment transfer that power to the residents on the park home sites and away from the owner, or would it leave some power with the owner?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

Inevitably, from a contractual position, some of the power would have to be given to the owner, but the power would be administered by the residents’ association. I am putting it to the Committee as a point worthy of discussion that the residents’ association should have some say in the matter.

Photo of Natascha Engel Natascha Engel Chair, Backbench Business Committee, Chair, Backbench Business Committee

Is the hon. Lady saying that all parks should be encouraged to have residents’ associations, which I would absolutely welcome? What would happen on park sites where there was no residents’ association?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

The hon. Lady raises an aspect that also worries me. The situation throughout the country, which happens not to be reflected in the two parks that I know well in Epping Forest, is that some residents’ associations do not really represent the majority of residents but seem to be a platform for some disgruntled park home residents owners to fight the park owners. Disgruntled residents can sometimes form a residents’ association that is not truly representative of all the residents of a park in order to carry on their fight with the park owner, whether he or she is an unscrupulous park owner or simply someone getting on with his or her everyday business.

Photo of Chris Ruane Chris Ruane Opposition Whip (Commons) 2:30 pm, 27th November 2012

What happens if there are two residents’ associations?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

That is a good question. Perhaps the amendments needs a further amendment. I do not think they do, because the exact wording states that they apply when

“there is a residents’ association with members drawn from a majority of the mobile homes on the site”.

By definition, only one of those two residents’ associations could have a majority of the residents. They could not both have a majority.

I realise that the amendments opens up further complications, but I have deliberately put them to the Committee so that we can examine those further complications. This is not a one-size-fits-all situation.

Photo of David Wright David Wright Labour, Telford

The problem that my hon. Friend the Member for Vale of Clwyd has raised is that if there is a site with 100 units—100 homes—and 51 residents are in one association and 49 in another, one presumably has a majority, so there could be two residents’ associations of similar size on a park, with a difference of only two units.

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

Yes, just as there can be a parliamentary constituency with a majority of under 100. But I do not think that that is relevant to what we are discussing, which is allowing residents to have a say in who lives on their park.

Photo of Natascha Engel Natascha Engel Chair, Backbench Business Committee, Chair, Backbench Business Committee

I am struggling to see what the amendments would do that the Bill as drafted will not do. The Bill tightens up the regulations that the hon. Lady is talking about. It takes the decisions that she is talking about away from the park home owner and makes them into set regulations, which will ensure that the problems that she is talking about will not occur in the first place. I am all for giving park home residents more say in how their park is run and in its general environment, but is she proposing that they should decide who comes on to the site and who does not?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

The amendments would provide a forum for consultation on such a matter. They would involve the residents’ association in the decision and therefore provide more flexibility. I do not necessarily reflect the views of my hon. Friend the Member for Christchurch, and is a pity that he is not here to give examples of what has happened in his constituency. I reiterate his apologies. He is detained on parliamentary business—it is not that he does not care about the Bill.

I have put the amendments before the Committee to open up the discussion that we have started. If it transpires, as the hon. Lady suggests, that the purpose of my amendments is in fact achieved by the Bill as it stands, I will be happy not to press them, but it is an important matter.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

To help the Committee, will my hon. Friend confirm whether she believes that it is important that residents have an opportunity to be involved in dialogue with site owners about the rules that govern the operation of the site, and that residents are expected to abide by the rules? If those are the key objectives, we will probably be able to explain to her that the Bill already achieves them.

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

I thank the Minister for that intervention. That is the main objective, but there is probably a further objective. We must recognise that not all park owners are unscrupulous. Many run good sites, and there ought to be a way in which they can determine who comes on to a site. For example, if there is an age qualification but no way of enforcing it, a park that is  currently properly run and occupied by people over a certain age may, within the next few years, be taken over by large numbers of people who do not fit in that age group or lifestyle. That outcome would not be desirable.

Photo of Robert Buckland Robert Buckland Conservative, South Swindon

My hon. Friend is right to emphasise good park home owners. However, being the pessimistic criminal lawyer that I am, I am worried that bad park home owners could use the provisions as a mechanism to avoid the main thrust of the Bill, which is to prevent obstructions to sale. I am concerned that there is no provision for, for example, annual resolution in residents’ associations. I am worried that park home owners could make it a precondition for new people coming on to the site to sign up to the residents association and thereby avoid some of the important provisions in the Bill. Am I being too pessimistic?

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

No, my hon. Friend is not being too pessimistic. I share his pessimism and the natural cynicism of a lawyer. However, I am anxious for the Committee to have a chance to consider what will happen as well as putting in the protections, which is the main thing that we all want to do, against unscrupulous park owners. I am also anxious for there to be sufficient flexibility in the Bill to ensure that parks continue to have the personality that they are intended to have and that residents can be consulted and involved in the decisions. I do not want to see more power given back to unscrupulous park owners.

Having heard what the Minister said in an intervention a few moments ago, and after hearing what the Minister and the Bill’s promoter have to say in a moment or two, it is likely that I will find comfort in what they say and be in a position to ask leave to withdraw the amendment.

Photo of Steve Brine Steve Brine Conservative, Winchester

I am grateful to my hon. Friend for giving us a chance to debate the points. However, I say with the greatest respect that I reject her amendments utterly. I have a huge pile of correspondence from people in my constituency and many other parts of the country who know about our work in the area and who have written to us. I will read some of the comments from some of the letters:

“If possible, please try to close every loophole”;

“We are writing to you now to ask that you close every loophole as it passes through the Committee stage”;

“We would like the Committee to make absolutely sure that for residents who wish to sell their home and have an existing contract, no loopholes are left in place” whereby unscrupulous site owners can interfere. They all say the same thing: do the job, close the loophole, and get the Bill on to the statute book. That is our job today.

The amendment is dangerous. It would water down the whole essence of the Bill and be a disincentive for residents to form a residents association. Through the all-party group, we have heard many examples over the years of unscrupulous site owners who interfere, influence and unfairly coerce residents’ associations to do things that they want them to do, often in a climate of fear. A contract between people who live in park homes is between two parties, and it must absolutely remain so. As I said on Second Reading, setting up a contract  between the buyer and seller of a park home should involve a solicitor, as is the case with the purchase and sale of every other home.

There is a good residents association in the community where I live. I would not, for one minute—love them all as I do—expect them to be involved in the sale of my property. If the amendment is a probing one, it has given us a chance to debate the points. If it were to be part of the Bill it would be deeply regrettable and—I do not think this is an exaggeration—dangerous.

Photo of David Wright David Wright Labour, Telford

I wholeheartedly support the hon. Gentleman’s remarks. I am a former housing professional myself and if we look at the debate on improvements it moves us in the direction of standardising the law in relation to normal practice. What he is talking about starts to standardise the law in relation to normal practice and begins to apply it to park homes. That has to be a very good thing.

Photo of Steve Brine Steve Brine Conservative, Winchester

Absolutely. We have always tried to stress, through the work on this Bill and through the all-party group, that park home owners are not these strange individuals who live in this vacuum and are different from the rest of us. They are constituents like everyone else and they deserve exactly the same treatment when it comes to buying their LPG gas or buying or selling their home. The Bill introduces the parity in that. These amendments to bring the residents’ associations into it would go completely against what the Bill is trying to achieve. I urge hon. Members not to support them.

Photo of Annette Brooke Annette Brooke Liberal Democrat, Mid Dorset and North Poole

I agree that this has been a useful discussion. I am sure that we all want to place on record that a residents association brought into being through the correct practices can be helpful on occasions. My hon. Friend the Member for Winchester has raised most of the points that have been raised with me. At an individual level if we have been involved in a site where the site owner is a bully, we get the same sort of thing as in a classroom with some of the residents trying to do everything they can to please him. That is what worries me. We cannot go down that line. It is really important to reject that.

I hope that the Minister and the hon. Member for Waveney when commenting on clause 10 in general can touch on the fact that we have a two-tier system. Is that absolutely inevitable? There are concerns with the existing contracts. If people are asked for their date of birth, for example, it could lead to some bullying and demands to see a birth certificate. Just stating the age, rather than the precise date of birth, might be sufficient.

Photo of Heather Wheeler Heather Wheeler Conservative, South Derbyshire

I thank the hon. Lady and I congratulate her and my hon. Friend the Member for Waveney on bringing the Bill to its current state. I am delighted about that. The people of South Derbyshire want the Bill go ahead today. She talks about the date of birth. Later on there is a Government amendment to withdraw that. So with a bit of luck we are there. She wishes it and it will happen.

Photo of Annette Brooke Annette Brooke Liberal Democrat, Mid Dorset and North Poole

I thank the hon. Lady. I wanted to put that clearly on the record. We have had a representation from the National Park Home Congress which quotes  several of us who spoke on Second Reading. It suggests that we have misunderstood clause 10. Again, it would be helpful if the hon. Member for Waveney could be crystal clear on what the clause involves and in what ways he will make it even better.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

I thank my hon. Friend the Member for Epping Forest for tabling these amendments to elicit debate on an important issue. She will be well aware that one of the reasons why the Bill is being introduced is because of the concern that has been expressed by many people that the relatively small number of unscrupulous site owners are blocking the sale of properties on sites. It is therefore important that we have measures in the Bill to try to reduce that. Indeed, it is reflective of the fact that nearly 300 respondents, including many responsible site owners, said that they wanted action to be taken and only five respondents said that they were against action in this particular area. Clearly, there is a real desire to take action.

One of the steps that my hon. Friend the Member for Waveney has taken in his Bill is to limit the interaction of a site owner in the process of sale. My hon. Friend the Member for Epping Forest is absolutely right to say that where there is a residents association, we would all wish it to be actively engaged in the development of the rules of the site. We are also absolutely with her in our belief that a new owner moving on to the site will be expected to abide by those rules.

The intention of the Bill is that, through regulation, there will be a requirement on the current owner, the vendor of a property, to make available a range of information to the prospective purchaser, which includes the details of the site rules. Subsequently, we will then expect the purchaser to sign up to those rules and to lodge a document to that effect, agreeing that they will meet and abide by the site rules. As my hon. Friend said, that will then become a legal document.

We recommend that all people engaging in that prospective purchase and sale to take legal advice because of the significance that is attached to those particular documents. That will give protection to the existing residents that a new resident coming on board will abide by the site rules. I hope that that will give her sufficient comfort, and that our genuine wish to ensure that existing residents engage in detailed dialogue with site owners about those rules will persuade her that there is no need for her two amendments.

Photo of Peter Aldous Peter Aldous Conservative, Waveney 2:45 pm, 27th November 2012

I will first address the issues raised by my hon. Friend the Member for Epping Forest. I pay tribute to her for her sterling contribution on Second Reading. She is right to raise the issue in her amendment, because clause 10, the sale blocking, goes right to the heart of the problems that park home owners face. She is also right to raise the issue of the sterling work that residents’ associations undertake. However, the clause as drafted addresses her concerns, and there is no need for her additional amendments.

From my own knowledge of residents’ associations, they do sterling work, but the members are getting on in years and want to enjoy their retirement. I am not sure that they are geared up for this role or would want to be  involved in this whole process. As my hon. Friend the Member for Winchester said, we are looking for a contract between two parties—between a buyer and seller—and for the appropriate legal advice. I question whether it is appropriate for residents’ associations to take on such a role, and I am not sure whether they would actually wish to do so. None the less, I am grateful to my hon. Friend the Member for Epping Forest for her intervention because it gives us an opportunity to scrutinise in detail the essence of the Bill.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

As my hon. Friend concludes, will he also point out to my hon. Friend the Member for Epping Forest that her own amendments were deficient in that they did not refer to the gifting of properties where no specific sale takes place? Will he assure our hon. Friend that the Bill covers exactly the same arrangements in relation to gifting as I have described for the issue of sale?

Photo of Peter Aldous Peter Aldous Conservative, Waveney

I thank my right hon. Friend for reminding me of those provisions. I can confirm those two issues, and that gifting is an issue that we have taken fully into account.

I would like to address the issues raised by my hon. Friend the Member for Mid Dorset and North Poole. First, as my other hon. Friend the Member for South Derbyshire said, and she is right, the date of birth issue will be addressed in later amendments. She is quite right to raise those concerns and I am grateful to her. The issue of a two-tier system is very important, because the clause contains provisions to remove entirely a site owner’s right to approve a purchaser in sales under new agreements made after the legislation comes into force. However, as she knows, where an existing agreement is in place, the Bill contains provisions replacing the site owner’s right to approve a purchaser with a right to apply to a residential property tribunal, although on limited grounds only.

In drafting the Bill, we received the highest level of legal advice that it would not be in the interests of fairness to amend the implied terms of existing agreements between a site owner and a mobile home owner, thereby removing entirely the site owner’s role in approving the purchase of a mobile home on their site. There is an exception for ongoing contractual arrangements between existing residents and site owners, which means that site owners are to be involved in the sale process. There is also a general assumption against, including retrospective provisions in legislation, for which the rationale is that legislation that affects past events or transactions may give rise to unfairness or impropriety. Provisions that take effect from a date earlier than that on which the legislation comes into force give rise to a significant risk of unfairness.

In light of such factors, a decision had to be taken balancing the existing contractual rights of site owners with the rights of residents, alongside the general public interest in avoiding a retrospective change in the law. It must also be recognised that the measures in the Bill considerably improve the position of residents with existing agreements under the Mobile Homes Act 1983. The provisions in proposed new paragraphs 7A and 7B aim to respect the reasonable expectations of a site  owner, by giving them the opportunity to object to a sale or gift while ensuring that they will only be able to do so where they have valid grounds. The Bill therefore shifts the burden of proof from the resident to the site owner by requiring site owners to have reasonable grounds for considering that a person should not be approved.

In that context, I hope that my hon. Friend the Member for Epping Forest will be assured that we have gone as far as we can, and that we are working within the parameters of the legal advice that we have been provided.

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

I am grateful to the Committee for taking the time to scrutinise this part of the Bill. As I have said in so many different contexts in Parliament, scrutiny of legislation is vital. There is no point in people coming to us afterwards and saying, “Why didn’t you look at this?” It is our job to look at it now, and our duty to consider all aspects of the Bill. I am therefore grateful to the Committee for having carefully scrutinised clause 10, its intentions, and the practical likelihood of those intentions becoming reality.

I am grateful to the Minister and my hon. Friend the Member for Waveney for explaining why, looking at the Bill as a whole, they do not consider amendments 1 and 2 necessary. In particular, the Minister made the point about the purchaser being obliged to sign up to the site rules, and I am satisfied that that gives the protection that I intended to emphasise with amendments 1 and 2.

I also strongly feel, as do all hon. Members who have spoken this afternoon, that the Bill’s main purpose must be to stop unscrupulous park owners unreasonably blocking sales and in other ways bullying the people who live in park homes. Having properly scrutinised the clause, I am satisfied that the amendments are not needed. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

I beg to move amendment 11, in clause 10, page 19, line 34, leave out ‘only’ and insert

‘without the approval of the owner’.

Photo of John Robertson John Robertson Labour, Glasgow North West

With this it will be convenient to discuss amendment 13, in clause 10, page 22, line 44, leave out ‘only’ and insert

‘without the approval of the owner’.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

Again, we are addressing the involvement or otherwise of site owners in the sale or gifting of properties. The role of the site owner, and the approval of a proposed occupier when an existing resident wants to sell or gift their home, is to be limited to the question of whether the occupier and the other persons who live in the home comply, as we have been discussing, with certain site rules—that is, those rules that form the basis of the grounds of appeal prescribed in regulations under proposed new paragraphs 7B(7) and 8B(7), as mentioned by my hon. Friend the Member for Waveney a few moments ago, of chapter 2 of part 1 of schedule 1 of the Mobile Homes Act 1983. There will be no other role for the site’s owner in the process.

However, it is clear that many agreements contain express terms requiring assignment of the agreement to be done in the presence or with the approval of the site  owner. That obviously affords an unscrupulous site owner—I stress that it is only the unscrupulous ones—the opportunity again to block a sale or to put unlawful conditions on the approval of an assignment, such as requiring the buyer to pay a deposit or to agree a higher pitch fee.

The Bill removes the legal requirement for an assignment to be approved by the site owner, so there is no need for the purchaser to meet the owner to complete the assignment. The amendments are introduced to make that explicitly clear and to provide consistency in the drafting between the provisions dealing with new agreements and those dealing with existing agreements.

Amendment 11 inserts into proposed new paragraph 7B(1) wording that explicitly provides that, under an existing contract, the resident selling the home is entitled to assign the agreement without the approval of the site owner, provided that the conditions set out in sub-paragraph (1) are met. Amendment 13 inserts the same wording into proposed new paragraph 8B(1) in connection with an assignment when, under an existing contract, the resident gifts the home. Under section 2(1) of the 1983 Act, terms implied in the agreement by the Act override any express terms in that contract. The amendments make it clear that any express terms that require assignments to be approved by the site owner will be unenforceable.

Amendment 11 agreed to.

Amendment made: 13, in clause 10, page 22, line 44, leave out ‘only’ and insert

‘without the approval of the owner’.—(Mr Foster.)

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government

I beg to move amendment 12, in clause 10, page 20, leave out from beginning of line 12 to ‘information’ in line 13 and insert ‘such’.

Photo of John Robertson John Robertson Labour, Glasgow North West

With this it will be convenient to discuss amendment 14, in clause 10, page 23, leave out line 20.

Photo of Don Foster Don Foster The Parliamentary Under-Secretary of State for Communities and Local Government 3:00 pm, 27th November 2012

As the Committee has already learned, clause 10 is a hugely important part of the Bill because it eradicates the unlawful practice of sale blocking by site owners. It does that by removing altogether the site owner’s role in approving a new buyer or a person to whom the home is to be gifted under new and assigned contracts.

For existing contracts, the Government recognise that there is a legitimate expectation that site owners should have some continuing role in the approval process, and that is achieved through new implied terms in chapter 2 of part 1 of schedule 1 of the Mobile Homes Act 1983—namely, a new implied term 7B in relation to sales and 8B in relation to gifting a home. Under clause 10, a site owner will have to apply to a residential property tribunal for an order prohibiting the sale, but only on specified grounds that will be set out in secondary legislation, and are likely to include such matters as the age of the buyer, keeping pets and other matters that might contravene the site rules.

When an existing resident proposes to sell his or her home, a notice of proposed sale must be served on the site owner under proposed new paragraph 7B(1)(a). Such a notice will need to contain certain information so that the site owner can make an informed judgment about whether the proposed buyer would meet the  relevant site rules and, therefore, about whether to apply for a refusal order. That information would be specified in regulations under proposed new paragraph 7B(5)(b). Where a site has rules about the age of residents—a point already raised—a vital piece of information that needs to be given to the site owner is the age of the buyer and the ages of any other persons who will reside in the home. However, there are sites that have no rules about the minimum age of residents, and in such cases information about the age of proposed occupiers would be irrelevant.

As the regulations will require ages to be provided where the site has rules in relation to age, it is unnecessary to have a provision in the Bill that would explicitly require sellers to provide that same information in each and every case, even when it is irrelevant. Amendment 12, therefore, would remove that requirement by deleting sub-paragraph (5)(a) of proposed new paragraph 7B. Amendment 14, for exactly the same reasons, would remove the requirement to give the date of birth of a person to whom it is proposed to gift the home, by deleting sub-paragraph (5)(a) of proposed new paragraph 8B.

Amendment 12 agreed to.

Amendment made: 14, in clause 10, page 23, leave out line 20.—(Mr Foster.)

Clause 10, as amended, ordered to stand part of the Bill.