Mobile Homes (Requirement for Manager of Site to be Fit and Proper Person) (England) Regulations 2020
(Limited Text - Ministerial Extracts only)
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Lord Greenhalgh
That the draft Regulations laid before the House on 8 July be approved.
Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
The regulations were laid before this House on 8 July 2020. Their purpose is to prohibit the use of land as a residential mobile home site unless the local authority is satisfied that the owner, or manager, of the site is a fit and proper person to do so.
I begin with the background to these important regulations. The Government are committed to ensuring that everyone, including park home residents, has a safe, secure and affordable place to live. Park home sites make a valuable contribution to the housing sector. The majority of site owners in England provide a professional service to their residents, most of whom are elderly and many are among the most vulnerable people in our society. Sadly, their good work can be overshadowed by the minority of unscrupulous operators within the sector.
To address ongoing problems caused by such unscrupulous operators, the Government introduced the Mobile Homes Act 2013, which implemented a new local authority site licensing regime in England. In 2017, the Government carried out a review of the park homes legislation. The evidence indicated that the measures introduced under the 2013 Act had brought significant improvements to the sector. For example, site owners blocking residents from selling their homes had been eliminated and the pitch fee review process had become more open and transparent. However, the review demonstrated that some site owners continued to exploit financially and harass vulnerable residents. In some cases, residents were asked to pay £40,000 for a new long-term agreement to stay on a site, something that should have been given to them for free in the first place. In others, the use of variable service charges led to increases in pitch fees of about £1,000 a year. These practices are unacceptable. Unscrupulous site owners must not be allowed to extract ever more cash from those who may already be on fixed or low incomes, or to harass or intimidate them without any fear of being sanctioned. The case for change is compelling.
These regulations will level the playing field for the majority of good site owners and help drive up standards of management and conduct across the park homes sector. Site owners who manage their sites professionally need not be concerned about meeting the required standards, but the minority who continue to abuse and exploit residents will have to improve or make way for more professional people to manage the site.
The regulations will prohibit the use of land as a residential mobile home site unless the local authority is satisfied that the owner or manager of the site is a fit and proper person to do so. The site owner will be required to provide mandatory information, such as whether they have committed certain offences or breached certain legislation, to enable the local authority to assess the applicant’s suitability to manage the site.
A range of other factors, such as the conduct of the applicant, may also affect an applicant’s suitability. That is why these regulations give local authorities the discretion that they need to make informed and holistic decisions. The regulations will also require local authorities to establish and maintain an online register of people who they are satisfied are fit and proper to manage a site in their area. This will mean that existing residents, prospective purchasers and other local authorities will know who is managing each site and whether any conditions are attached to their entry on the register. Should any site owner fail to maintain high standards of conduct and management after they have been placed on the register, a local authority will be able to review their entry and either remove them, attach new conditions or vary an existing condition attached to that entry. If the local authority rejects an application or removes a person from the register, and the site owner is unable to find an alternative fit and proper manager, the local authority will be able to appoint a new manager, with consent from the site owner.
In recognition of the severity of abuses within the sector which these regulations will tackle, there will be serious penalties for site owners who do not comply. Conviction under any offences under these regulations could result in an unlimited fine. The regulations will also enable a local authority to revoke a site licence in certain circumstances.
Our local authorities are working hard to enforce standards in the park homes sector, so we are mindful of the risks of putting new burdens on them; that is why we have given them the power to charge application and annual fees to cover the cost of their work. The test will also be implemented in two stages. The first stage will run from when the regulations are made until 1 July 2021 to allow local authorities to prepare to receive and assess applications. The second stage will run from 1 July 2021 until 1 October 2021, by which time all existing site operators must have submitted an application to the local authority. In addition, we will publish detailed guidance to assist local authorities and site operators to understand their responsibilities under the new legislation.
These vital regulations form part of the comprehensive programme of work that we announced in 2018 to improve the sector and the lives of park home residents. They are necessary to drive up standards of management and conduct across the park homes sector and to ensure residents’ rights are respected. I commend them to the House.
Lord Greenhalgh (Con)
My Lords, we have had a fascinating and wide-ranging debate on the regulations before us today, and I thank noble Lords on all sides of the House for their contributions. I take this opportunity to provide responses to the questions asked of me and the points raised.
The noble Lords, Lord Kennedy, Lord Berkeley and Lord Campbell-Savours, and the noble Baroness, Lady Bennett, raised the issue of local authority resources. We are mindful of the risks of putting new burdens on local authorities—we have the new burdens doctrine—and that is why we have given them the power to charge application and annual fees to cover the cost of the work needed to drive up standards. As required by the Provision of Services Regulations 2009, fees charged by local authorities must be reasonable and cover their costs only. The noble Lord, Lord Berkeley, wanted to know the number of applications likely to be received. There are 2,000 sites in England, so that means 2,000 applications.
The noble Lords, Lord German and Lord Teverson, addressed the importance of consumer protection. The terrible case in which criminality was involved, raised by the noble Lord, Lord German, was very striking. These regulations introduce three criminal offences. If a site owner is convicted of any one of these, they face a penalty up to an unlimited fine. If convicted twice for operating a site in contravention of the regulations, the local authority may apply to the magistrates’ court or the First-tier Tribunal for an order to revoke the site licence. We expect local authorities to use this power as a last resort only, as it could lead to the closure of the site and put residents at risk of homelessness. To avoid this happening, the Government will explore giving local authorities powers, as part of the forthcoming primary legislation, to apply to the First-tier Tribunal to install an interim site manager to take over management of a site where a site licence may need to be revoked.
I take the point about the need to interact with the police. As a local authority leader, it is very much part of local authorities’ DNA to have strong connections with the local police force. That also answers the point from the noble Lord, Lord Teverson, that, for a fine to be effective, it needs to be implemented. Intelligence needs to be shared between the local authority and the police, and between local authorities.
A number of noble Lords raised the effectiveness of regulations. My noble friend Lord Kirkhope and the noble Lord, Lord Kennedy, should be aware that the local authority will keep all the people placed on the register under review. Complaints from residents can precipitate removal from the register. I recognise the concerns raised about unscrupulous site owners hiding behind an organisation or putting another individual forward for the test to avoid scrutiny themselves. These regulations address this by ensuring that the test focuses on the actual person managing the site. They do this by requiring the provision of certain information and a criminal record certificate, in some cases, about responsible persons and company officers who are involved in the management of the site or have responsibilities for its day-to-day management.
Local authorities may also request any additional information they consider relevant to an application and may have regard to the conduct of any person associated, or formerly associated, with the relevant person, whether on a personal, work or other basis. My noble friend Lord Bourne asked whether the test is structured to avoid loopholes, as some may have complex arrangements. I assure noble Lords that all the loopholes have been covered and, where the site owner is a company, details of all the relevant officers of the organisation will be required. Local authorities can also ask for relevant information. This applies to companies whether they are located in the UK or abroad. On sharing information, local authorities have to make this register public and are encouraged to share information from it. I note the point from the noble Lord, Lord Kennedy, about the need to publicise data from the rogue landlords database. I will take that matter away and look into it.
The noble Baroness, Lady Bennett, and my noble friend Lord Kirkhope, raised the issue of how the fit and proper test would work. It will apply to the site licence holder or the person appointed by the site licence holder to manage a “relevant protected site”, which is one for which a site licence is required and on which year-round residential occupation is allowed. The test will also apply to a prospective site licence holder who has applied to the local authority for a site licence.
Relevant protected sites are predominantly park home sites. However, that definition also includes owner-occupied sites, which are those occupied by a single family and not operated commercially—for example, those with planning permission for use by Gypsy and Traveller communities. We have exempted those owner-occupied sites from the requirements, as the regulations would place a disproportionate burden on those single families.
The noble Lord, Lord Teverson, raised the issue of the 10% commission on the sale of a home. Under the Mobile Homes Act 1983, a site owner is entitled to a commission of up to 10% of the price of a mobile home upon sale. The Government recognise that the payment of a commission has divided opinion over the years, continues to raise concerns and creates uncertainty with residents and site owners. From previous reviews that have looked at this issue, it is clear that there are likely impacts on residents and site owners if changes are made to the rate of commission that is payable. Therefore, it is important that any ongoing debates or discussions about changing the commission rate are based on data, facts and an accurate assessment of the impacts on the sector. There is currently no data available to accurately measure any of those impacts, which is why the Government have committed to undertake research to gather the relevant data. We have undertaken some initial scoping work to identify gaps in the existing evidence base to ensure that the research is thorough and comprehensive.
I recognise that a number of points about implementation and the guidance available were raised by my noble friend Lord Naseby and the noble Lords, Lord Kirkhope and Lord Teverson. In the interests of time, I will write to them on those matters. I pay tribute to the noble Lords, Lord Best and Lord Kirkhope, for their work on the Mobile Homes Act 2013. This statutory instrument is testament to their work holding the Government’s feet to the fire. This is not the end of the road; we are looking at primary legislation, when parliamentary time allows, to pick up many of the points raised during this debate.
I reiterate that the majority of site owners are responsible and compliant, make a valuable contribution to the housing market and provide well-maintained and safe sites for their residents. However, a minority knowingly flout their responsibilities and exploit their residents, most of whom are elderly, vulnerable and on low incomes. These regulations are necessary to protect and improve the lives, health and well-being of park home residents.
In conclusion, park home residents are all too often exploited and suffer poor treatment. They deserve our protection and support. We have made good progress in recent years, but there is more to be done. These regulations will ensure that all site owners, not just the good ones, meet the required standards of management and conduct. Unscrupulous site owners will have to change their behaviour or find a more competent person to manage the site. Once again, I am very grateful for noble Lords’ time and contributions, and I commend the regulations to the House.