Tribunal Uses CPI to Determine Pitch Fee Increase

OUTCOME: Dismissed

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FIRST – TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference CAM/38UC/PHI/2023/0094

Site St Nicholas’ Park, Oxford [POSTCODE]

Park Home Address [ADDRESS], St Nicholas’ Park, Oxford [POSTCODE]

Applicant [NAME] In person

Respondent [RESPONDENT] [COUNSEL] pursuant to the Mobile Homes Act 1983 to determine a pitch fee

Tribunal Judge Stephen Reeder Valuer member [NAME] venue [NAME], St Aldates, Oxford OX1

Date of inspection 18 October 2024

Date of Decision 18 October 2024

DECISION

© CROWN COPYRIGHT 2024

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DECISION

(1) The pitch fee for [ADDRESS], St Nicholas’ Park, Oxford [POSTCODE] to take effect from 1 January 2024 is £195.21 per month.

(2) The right of appeal to this decision is set out in ‘Appendix 2 – your right of appeal’ at the end of this Decision.

REASONS

The application, parties and issues for determination

1. This is an application by [APPELLANT] [NAME] (“the Applicant”) for determination of a new pitch fee for the pitch he occupies at [ADDRESS], St Nicholas’ Park, Oxford [POSTCODE]. [RESPONDENT] (‘the Respondent’) is the owner of the [ADDRESS]’ site.

2. The application and the respondent’s statement of case address the pitch fee reviews for 2022-2023 and 2023-2024. However, the parties agreed at the hearing that they seek determination from the tribunal in relation to the 2023-2024 review only. The tribunal has proceeded on that basis.

3. By a Notice dated 16 November 2023, the Respondent served the Applicant with a Pitch Fee Review Form in the form prescribed by the Mobile Homes (Pitch Fees) (Prescribed Form) (England) Regulations 2013 (“the Regulations”). The current pitch fee is £186.63 per month. The last review date was 1 January 2023. The inflation index applied to increase the pitch fee is the Consumer Prices Index ‘(CPI’) published for October 2023, being 4.6% and producing an increase of £8.58. The proposed pitch fee is £195.21 per month to take effect from 1 January 2024.

4. The application and supporting documents raise the following issues –

a. Is CPI the correct index to apply to calculate the pitch fee increase?

b. What if any regard should the tribunal have to the replacement of the electricity meter on the pitch for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

c. What if any regard should the tribunal have to the level of the electricity charge based on a commercial contract by the respondent for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

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d. What if any regard should the tribunal have to the level of the electricity charge based on a commercial contract by the respondent for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

e. What if any regard should the tribunal have to the applicant’s request for permission to construct a ‘made up’ driveway on his pitch for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

f. What if any regard should the tribunal have to the dilapidated state of the garden walls on his pitch for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

g. What if any regard should the tribunal have to the construction of new residential housing on a plot of land adjacent to the communal entrance road to the site for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee?

5. By an order dated 4 June 2024 Judge Hardman issued case management directions. They include a direction for the respondent to file and serve a bundle containing a statement of case and the key documents and evidence listed in paragraph 3 of the order. They include a direction for the applicant to file and serve a statement of case and the documents and evidence listed in paragraph 6 of that order. The Respondent has filed a bundle. The applicant has filed 14 pages of documents behind a covering letter. Neither party has complied with the order of 4 June 2024 entirely. The tribunal has not applied any default sanctions and has heard the application in full. The tribunal has had regard to all of these documents when reaching its determination.

The inspection and hearing

6. The tribunal inspected the pitch at [ADDRESS] and the site at St Nicholas’ Park on the morning of the hearing day.

7. The tribunal has convened an attended hearing at the [NAME]. The Applicant has attended in person and without representation. The Respondent has been represented by [RESPONDENT]. Both have been given the opportunity to address the tribunal in relation to the matter before it and the tribunal has been assisted by the oral arguments of each. The tribunal has read with care the documents filed and both parties have been given the opportunity to address those documents during the hearing.

The law

8. The Mobile Homes Act 1983 provides in section 2(1) that terms are implied into every agreement for the renting of a pitch on a protected site, being the terms as set out in Part 1 of Schedule 1 of that Act. Paragraphs 16 to 20 and paragraph 25A of Part 1 of Schedule 1 to the Act provide a regime that governs pitch fee increases. Those

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statutory provisions are set out in full in the document titled ‘Appendix 1 : the law’ which is attached to and forms part of this decision.

9. Those provisions of the statutory regime relevant to the instant application can be summarised –

a. The pitch fee can only be increased once a year. b. A site owner initiates a pitch fee increase by serving a notice that must be in a specific form, giving details (amongst other things) of the pitch to which the increase relates, the current pitch fee and the proposed new pitch fee, showing how it has been calculated. c. If the pitch occupiers do not agree to the proposed increase, it does not take effect unless the site owner applies to this tribunal to determine the new pitch fee. d. The tribunal must agree that it is reasonable for the pitch fee to be changed, and must determine the amount of the new pitch fee. e. There is a presumption that, unless it would be unreasonable, the new pitch fee shall increase by the increase in the retail prices index (‘RPI’) published by the Government. For pitch fee increases proposed after 2 July 2023, the consumer prices index (‘CPI’) must be used instead. f. Paragraph 18 of the implied terms provides matters to which a tribunal must have particular regard when determining a new pitch fee. g. Paragraph 19 of the implied terms provides a list of matters which should not be taken into account.

10. The tribunal is not restricted to consideration of the matters to which it must have particular regard as required by paragraph 18 of the implied terms. It is possible for another factor to apply which could displace the presumption. But any such factor has to be one to which persuasive weight should attach. A factor that is of equal weight to the presumption would not be adequate. Reasonableness is to be determined in the context of the statutory provisions relating to pitch fee increases.

11. The tribunal considers that the factors which might be applicable to this case having regard to the issues raised on the application are –

a. whether there has been any deterioration in the condition, and any decrease in the amenity, of the site or any adjoining land which is occupied or controlled by the owner, and

b. whether there has been any reduction in the services that the owner supplies to the site, pitch or mobile home, and any deterioration in the quality of those services.

12. The tribunal considers that the starting point for any pitch fee review is the presumption in favour of an annual increase by RPI until and CPI from 2 July 2023. An inflation increase will therefore normally be justified, unless displaced by a paragraph 18 factor, or there is some other important factor that affects the reasonableness of the proposed increase. The upper tribunal is a superior court of record such that its decisions are binding on the first-tier tribunal. This tribunal therefore has regard to

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the decisions in [COMPANY] v Bamborough [2016] UKUT 0144 (LC), [NAME] v [COMPANY] [2017] UKUT 0024 (LC), [COMPANY] v Kenyon [2017] UKUT 0028 (LC), and [COMPANY] v Esterhuyse [2023] UKUT 147 (LC).

Evidence, discussion and determinations

Application of CPI

13. The notice served is dated 16 November 2023. The inflation index applied to increase the pitch fee is the Consumer Prices Index ‘(CPI’) published for October 2023. The tribunal determines that CPI is the correct index to apply to calculate the pitch fee increase and that the inflation figure of 4.6% is the correct figure to apply to calculate the pitch fee increase.

Replacement of the electricity meter

14. The Applicant described how, since he has occupied the pitch in December 2021, the electrical supply in his van has been unreliable and cuts out when he uses several appliances at once and when he uses his lawnmower. He states that he requested that his electricity meter be replaced within 2-3 months of moving onto the pitch. Email correspondence in the bundle before the tribunal confirms that it was replaced in March 2024 as it was old and not because it was found to be defective in terms of the support of electricity to the pitch and mobile home from the site electricity supply. That meter was seen on the inspection. In that correspondence the landlord reports that no other pitches are reporting the same issue. The Applicant in evidence confirmed that the same problem persists since the replacement of the meter, and that he has been advised by a specialist inspector that the defect is in the electrical installation within his mobile home.

15. The tribunal is mindful that liability for the maintenance of the electrical installation within the mobile home falls on the Applicant pursuant paragraph 4 of the Third Schedule to the Written Statement taken on the assignment of his pitch, and pursuant to paragraph 21(c) of the statutory implied terms.

16. The tribunal determines that the replacement of the electricity meter on the pitch in such circumstances is not related to any deterioration in the condition, decrease in the amenity, or reduction of, or deterioration in quality of, the services that the respondent supplies to the pitch or mobile home. It is therefore of no effect for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee.

Electricity charges

17. The Applicant contended that he is paying unduly high electricity charges because the respondent arranges the support of electricity to the site as a commercial contract such

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that the electricity costs. He points to the fact that his bills have reduced during 2024 which he believes arises from the Respondent shifting from a commercial contract to a residential contract. The Respondent states there has been no such shift and that the reduction results from the Respondent periodically going to market to seek value for money on a commercial contract for service to the site as a whole, and from the reductions in electricity costs generally following the volatility in that market in recent years. The tribunal accepts that response. The tribunal notes that the [NAME] regulations supervise the procedure for the Respondent to arrange an electricity supply on a commercial contract for the park and to then resell electricity to the Applicant as a pitch [NAME]. The tribunal notes that those regulations prohibit any charges in excess of the maximum resale price. There is no evidence before the tribunal that they have been breached.

18. The tribunal is mindful of the liability imposed on the Applicant to pay to the Respondent all sums due in respect of electricity supplied by the Respondent pursuant to Part IV of the Written Statement taken on the pitch assignment, and pursuant to paragraph 21(b) of the statutory implied terms. Liability to pay all sums due in respect of electricity is clear and is not in fact disputed by the Applicant.

19. In such circumstances the tribunal determines that the higher electricity costs in the past followed by lower electricity costs more recently cannot be said to be a decrease in the amenity, or reduction of or deterioration in quality of, the services that the respondent supplies to the pitch or mobile home. It is therefore of no effect for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee.

20. The tribunal determines that the replacement of the electricity meter on the pitch in such circumstances is not related to any deterioration in the condition, decrease in the amenity, or reduction of, or deterioration in quality of, the services that the respondent supplies to the pitch or mobile home. It is therefore of no effect for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee.

Request to construct a driveway

21. The applicant’s request for permission to construct a ‘made up’ driveway on his pitch is a request for a better or different amenity. It is an improvement in his pitch that he wishes to make. The Respondent expressly stated to the tribunal that it would be agreed to providing he produces a reasonable proposal.

22. The tribunal determines that this request cannot be said be a deterioration in the condition, decrease in the amenity, or reduction of or deterioration in quality of, the services that the respondent supplies to the pitch or mobile home. It is therefore of no effect for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee.

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Dilapidated garden walls

23. The walls were seen on the inspection. They are low level brick walls which divide grassed areas within the pitch. They are dilapidated and require maintenance. They are clearly within the boundary of the Applicant’s pitch and exist for his benefit only. He agreed this during the hearing.

24. The tribunal considers that these walls are the responsibility of the Applicant pursuant to paragraph 21(d) of the statutory implied terms.

25. The tribunal determines that they cannot be said to be a deterioration in the condition of the park, or a decrease in the amenity, or reduction of or deterioration in quality of the services that the respondent supplies to the pitch or mobile home. This issue is therefore of no effect for the purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 when determining the amount of the pitch fee.

Construction on nearby land

26. In his application form the applicant records “adjoining land is currently being developed to build houses” as a change since the last pitch fee review. On inspection the tribunal saw advanced stage construction of new residential housing on a plot of land adjacent to the communal entrance road to the site and some distance from the Applicant’s plot. It was confirmed that this plot of land was sold by the Respondent for this purpose.

27. The tribunal accepts that this construction might arguably constitute a deterioration in the condition, and a decrease in the amenity, of the site or any adjoining land which is occupied or controlled by the owner for the purposes of paragraph 18(1) (aa) of Part 1 of Schedule 1 to the Mobile Homes Act 1983.

28. However, the clear and frank evidence of the Applicant was that the current construction site was previously “just a big field” which he never used for any amenity or other purpose.

29. In such circumstances the tribunal determines that this construction is of no relevance for the purposes of purposes of paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983.

The pitch fee payable

30. The pitch fee for [ADDRESS], St Nicholas’ Park, Oxford [POSTCODE] to take effect from 1 January 2024 is £195.21 per month. This is calculated using the current pitch fee of £186.63 per month with CPI at 4.6% applied as the inflation index with no adjustment pursuant to paragraph 18 of Part 1 of Schedule 1 to the Mobile Homes Act 1983 or otherwise.

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Stephen Reeder Judge of the First Tier Tribunal, Property Chamber

19 October 2024

APPENDIX 1 : The Law

Paragraphs 16 – 20 and paragraph 25A of Part 1 of Schedule 1 to the Mobile Homes Act 1983 (as amended)

The pitch fee

Paragraph 16

The pitch fee can only be changed in accordance with paragraph 17, either –

(a) with the agreement of [NAME], or

(b) if the appropriate judicial body, on the application of the owner or [NAME], considers it reasonable for the pitch fee to be changed and makes an order determining the amount of the new pitch fee.

Paragraph 17

(1) The pitch fee shall be reviewed annually as at the review date.

(2) At least 28 clear days before the review date the owner shall serve on [NAME] a written notice setting out his proposals in respect of the new pitch fee.

(2A) A notice under sub-paragraph (2) which proposes an increase in the pitch fee is of no effect unless it is accompanied by a document which complies with paragraph 25A.

(3) If [NAME] agrees to the proposed new pitch fee, it shall be payable as from the review date.

(4) If [NAME] does not agree to the proposed new pitch fee –

(a) the owner or in the case of a protected site in England, [NAME] may apply to the appropriate judicial body for an order under paragraph 16(b) determining the amount of the new pitch fee ;

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(b) [NAME] shall continue to pay the current pitch fee to the owner until such time as the new pitch fee is agreed by [NAME] or an order determining the amount of the new pitch fee is made by the appropriate judicial body under paragraph 16(b); and

(c) the new pitch fee shall be payable as from the review date but [NAME] shall not be treated as being in arrears until the 28th day after the date on which the new pitch fee is agreed or, as the case may be, the 28th day after the date of the appropriate judicial body order determining the amount of the new pitch fee

(5) An application under sub-paragraph (4)(a) may be made at any time after the end of the period of 28 days beginning with the review date but in the case of a protected site in England no later than three months after the review date.

(6) Sub-paragraphs (7) to (10) apply if the owner—

(a) has not served the notice required by sub-paragraph (2) by the time by which it was required to be served, but

(b) at any time thereafter serves on [NAME] a written notice setting out his proposals in respect of a new pitch fee.

(6A) A notice under sub-paragraph (6)(b) which proposes an increase in the pitch fee is of no effect unless it is accompanied by a document which complies with paragraph 25A.

(7) If (at any time) [NAME] agrees to the proposed pitch fee, it shall be payable as from the 28th day after the date on which the owner serves the notice under sub-paragraph (6)(b).

(8) If [NAME] has not agreed to the proposed pitch fee –

(a) the owner or in the case of a protected site in England [NAME] may apply to the appropriate judicial body for an order under paragraph 16(b) determining the amount of the new pitch fee ;

(c) if the appropriate judicial body makes such an order, the new pitch fee shall be payable as from the 28th day after the date on which the owner serves the notice under sub- paragraph (6)(b).

(9) An application under sub-paragraph (8) may be made at any time after the end of the period of 56 days beginning with date on which the owner serves the notice under sub-paragraph (6)(b) but no later than four months after the date on which the owner serves that notice.

(9A) A tribunal may permit an application under sub-paragraph (4)(a) or (8)(a) in relation to a protected site in England to be made to it outside the time limit specified in sub-paragraph (5) (in the case of an application under sub-paragraph (4)(a)) or in sub-paragraph (9) (in the case of an application under sub-paragraph (8)(a)) if it is satisfied that, in all the circumstances, there are good reasons for the failure to apply within the applicable time limit and for any delay since then in applying for permission to make the application out of time.

(10) [NAME] shall not be treated as being in arrears –

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(a) where sub-paragraph (7) applies, until the 28th date after the on which the new pitch fee is agreed ; or

(b) where sub-paragraph (8)(b) applies, until the 28th day after the date on which the new pitch fee is agreed or, as the case may be, the 28th day after the date of the appropriate judicial body order determining the amount of the new pitch fee.

(11) Sub-paragraph (12) applies if a tribunal, on the application of [NAME] of a pitch in England, is satisfied that –

(a) a notice under sub-paragraph (2) or (6)(b) was of no effect as a result of sub- paragraph (2A) or (6A), but

(b) [NAME] nonetheless paid the owner the pitch fee proposed in the notice.

(12) The tribunal may order the owner to pay [NAME], within the period of 21 days beginning with the date of the order, the difference between –

(a) the amount which [NAME] was required to pay the owner for the period in question, and

(b) the amount which [NAME] has paid the owner for that period.

Paragraph 18

(1) When determining the amount of the new pitch fee particular regard shall be had to –

(a) any sums expended by the owner since the last review date on improvements –

(i) which are for the benefit of the occupiers of mobile homes on the protected site;

(ii) which were the subject of consultation in accordance with paragraph 22(e) and (f) below; and

(iii) to which a majority of the occupiers have not disagreed in writing or which, in the case of such disagreement, the appropriate judicial body, on the application of the owner, has ordered should be taken into account when determining the amount of the new pitch fee;

(aa) in the case of a protected site in England, any deterioration in the condition, and any decrease in the amenity, of the site or any adjoining land which is occupied or controlled by the owner since the date on which this paragraph came into force (in so far as regard has not previously been had to that deterioration or decrease for the purposes of this sub- paragraph);

(ab) in the case of a protected site in England, any reduction in the services that the owner supplies to the site, pitch or mobile home, and any deterioration in the quality of those services, since the date on which this paragraph came into force (in so far as regard has not previously been had to that reduction or deterioration for the purposes of this sub- paragraph);

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(c) [Wales]

(ba) in the case of a protected site in England, any direct effect on the costs payable by the owner in relation to the maintenance or management of the site of an enactment which has come into force since the last review date;

(d) [Wales]

(1A) But, in the case of a pitch in England, no regard shall be had, when determining the amount of the new pitch fee, to any costs incurred by the owner since the last review date for the purpose of compliance with the amendments made to this Act by the Mobile Homes Act 2013.

(2) When calculating what constitutes a majority of the occupiers for the purpose of sub- paragraph (1)(b)(iii) each mobile home is to be taken to have only one [NAME] and, in the event of there being more than one [NAME] of a mobile home, its [NAME] is to be taken to be [NAME] whose name first appears on the agreement.

(3) In a case where the pitch fee has not been previously reviewed, references in this paragraph to the last review date are to be read as references to the date when the agreement commenced.

Paragraph 19

(1) When determining the amount of the new pitch fee, any costs incurred by the owner in connection with expanding the protected site shall not be taken into account.

(2) In the case of a protected site in England, when determining the amount of the new pitch fee, no regard may be had to any costs incurred by the owner in relation to the conduct of proceedings under this Act or the agreement.

(3) In the case of a protected site in England, when determining the amount of the new pitch fee, no regard may be had to any fee required to be paid by the owner by virtue of -

(a) section 8(1B) of the Caravan Sites and Control of Development Act 1960 (fee for application for site licence conditions to be altered);

(b) section 10(1A) of that Act (fee for application for consent to transfer site licence).

(4) In the case of a protected site in England, when determining the amount of the new pitch fee, no regard may be had to any costs incurred by the owner in connection with –

(a) any action taken by a local authority under sections 9A – 9I of the Caravan Sites and Control of Development Act 1960 (breach of licence condition, emergency action etc);

(b) the owner being convicted of an offence under section 9B of that Act (failure to comply with compliance notice).

Paragraph 20

(A1) In the case of a protected site in England, unless this would be unreasonable having regard to paragraph 18(1), there is a presumption that the pitch fee shall increase or decrease by no

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more than any percentage increase or decrease in the retail prices index (from 2 July 2023 the applicable index is changes to the Consumer Prices Index by virtue of the Mobile Homes (Pitch Fees) Act 2023) calculated by reference only to –

(a) the latest index, and

(b) the index published for the month which was 12 months before that to which the latest index relates.

(A2) In sub-paragraph (A1), “the latest index” –

(a) in a case where the owner serves a notice under paragraph 17(2), means the last index published before the day on which that notice is served;

(b) in a case where the owner serves a notice under paragraph 17(6), means the last index published before the day by which the owner was required to serve a notice under paragraph 17(2).

(1) [Wales]

(2) Paragraph 18(3) above applies for the purposes of this paragraph as it applies for the purposes of paragraph 18. …

Paragraphs 19-25……….

Paragraph 25A

(1) The document referred to in paragraph 17(2A) and (6A) must –

(a) be in such form as the Secretary of State may by regulations prescribe,

(b) specify any percentage increase or decrease in the retail prices index* calculated in accordance with paragraph 20(A1),

(c) explain the effect of paragraph 17,

(d) specify the matters to which the amount proposed for the new pitch fee is attributable,

(e) refer to [NAME]'s obligations in paragraph 21(c) to (e) and the owner's obligations in paragraph 22(c) and (d), and

(f) refer to the owner's obligations in paragraph 22(e) and (f) (as glossed by paragraphs 24 and 25).

(2) Regulations under this paragraph must be made by statutory instrument.

(3) The first regulations to be made under this paragraph are subject to annulment in pursuance of a resolution of either House of Parliament.

(4) But regulations made under any other provision of this Act which are subject to annulment in pursuance of a resolution of either House of Parliament may also contain regulations made under this paragraph.

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APPENDIX 2 : YOUR RIGHT OF APPEAL

A. Rule 36(2) of the Tribunal Procedure (First-tier tribunal) (Property Chamber) Rules 2013 requires the tribunal to notify parties about any right of appeal they may have from its decision.

B. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to this First-tier tribunal at the regional office which has been dealing with the case.

C. The application for permission to appeal must be received at the regional office within 28 days after the date on which the tribunal sends the written reasons for the decision to the person making the application.

D. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

E. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), must state the grounds of appeal, and must state the result the party making the application is seeking.

F. If the First-tier tribunal refuses permission to appeal, a further application for permission may be made directly to the Upper Tribunal (Lands Chamber).