WHETHER PARK HOME RESIDENTS ARE LIABLE FOR SITE OWNERS COSTS WHEN PROVIDING UTILITIES
- Mar 12
- 3 min read
The background.
In 2017, P R Hardman owned a caravan park on which Mr & Mrs Greenwood and others were occupiers of pitches. The residents occupied their pitches as permanent residences. The park was a protected site under the Mobile Homes Act 1983, applying to agreements under which occupiers were entitled to establish and occupy a mobile home as a main residence.
The applicants had agreed under their contracts to:
“pay…an annual pitch fee…
(b) to pay and discharge all general and/or water rates…and charges in respect of electricity gas water telephone and other services.”
Liquid Petroleum Gas (LPG) was pumped to each pitch from a bulk tank on the park which was filled by an independent supplier. The respondents paid for the costs of the LPG, The LPG supply to each pitch was metered and the respondents passed on the usage costs to each occupier quarterly. The set rate was calculated to include a contribution towards the costs of supplying LPG to communal areas and the costs of the park owner in reading meters, rental and maintenance of the LPG tank and pipework, interest and an administration fee. These additional charges were considered substantial as a proportion of the cost of the actual LPG. The occupiers disputed payment of some of the additional charges.
The law
At first instance, the First-tier Tribunal (Property Chamber) held that additional ‘service’ charges were excluded from the cost of supplying LPG to each pitch, restricting the amounts the respondents were able to recover to just the cost of LPG from the independent supplier. Further, the park owners could not recover the costs of operation of the park’s private sewerage system, nor could it recover administrative costs in the supply of utilities.
On appeal, the Upper Tribunal rejected the park owners argument that pitch occupiers were liable to pay a general service charge, concluding that the agreements between the parties related only to specific outgoings to third-party providers.
The Court of Appeal was asked to consider whether the occupiers were liable under their agreements for costs, expense and trouble in the provision, maintenance and administration of supplying utilities, requiring assessment and construction of specific terminology within the agreements. The respondents argued that the wording allowed it to demand a service charge for the supply of utilities, including the maintenance and administration of that supply; the wording did not limit recovery only to liabilities owed to third parties and the agreement did not contain any express exceptions for services provided by the respondents.
The decision
The Court of Appeal dismissed the appeal. Water rates, and general rates, were third party liabilities. Further utilities specified in the agreements were also generally supplied by third parties, and further construction of the agreements held that the wording was restricted to utilities and work supplied by third parties; utilities and services supplied by or on behalf of the park owners was not encompassed by the agreements’ wording.
On consideration of the language used in the agreements, it was held that there was no separate, defined obligation for the occupiers to pay costs and expenses incurred by the respondents. There were no restrictions on service charges set out, and no express provision to limit amounts recoverable by service charge in terms of reasonableness.
COMMENTS
“This case underlines the importance of clarity in the terms of residents written Agreements Residents should always ensure that their own Written statement allows the park owner to fully recover these.”
Contractual Obligation: Service charges are generally contractual, meaning you are obligated to pay them because you signed an Agreement that requires you to do so.
No "Custom and Practice" Rule: The fact that you have paid in the past does not create a new legal obligation that overrides the terms of you Agreement, but it usually reinforces that the original contract terms are being followed.
Exceptions and Rights. While the obligation is binding, you still have legal protections regarding the service charges:
Reasonableness: Service charges must be "reasonably incurred" and for a reasonable standard of work, as stated in Section 19 of the Landlord and Tenant Act 1985.
18-Month Rule: A Park Owner annot recover service charge costs that were incurred more than 18 months before they formally demanded them, unless they notified you within that time.
Proper Demands: Demands must be made in accordance with your Agreement, including a "Summary of Rights and Obligations," or they are not valid.
If you believe the charges are not payable - or unfair, it is generally advised to pay under protest to avoid breaching your Agreement, and then challenge the amount through a First-tier Tribunal (Property Chamber)
( This position was reflected in the 2024 Upper Tribunal decision involving Fury Developments Ltd when seeking to secure payments for the third party reading of meters and billing )