Pitch Fee Reviews Explained
Posted by Justin Allitt in Advice – Buying, Living or Selling a Residential Park Home, November 19, 2022
What is a pitch fee agreement?
For those of you who live in fully residential park homes, you almost certainly have come across the term pitch fee. A pitch agreement is basically a contract entered into by the site owner and park home resident. It sets out a number of obligations and responsibilities between the two parties. The basic terms of this agreement state the amount of the pitch fee and when it should be paid by. In some instances, this will include utilities but it does need to be clearly outlined in the agreement.
There should be regular reviews of pitch fees – to allow the amount to be adjusted according to inflation, the current economy or other factors. These pitch fee reviews should be done according to guidelines set out by the government Mobile Homes Act in 2013. If the site owner wants to increase the pitch fee then they must follow these rules. The site owner must make any changes to the pitch fee by first informing the park home resident of the change and include a pitch review form in this notice.
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How often should a pitch fee review take place?
The pitch fee review should take place annually. This review should take place on or after the review date stated in the contract. So therefore a pitch fee review cannot take place more than once a year.
What is the pitch fee review form?
This form is a prescribed form of eight pages. It includes a formula to calculate the fee and there are explanatory notes also included. These explanatory notes provide guidance on how it should be worked out. If the fee review form is not served then the site owner forfeits any increase to the pitch fee and cannot make any changes. The pitch fee review notice and the review form must be sent at least 28 days before the review. Failure to do so will result in the site owner being unable to make any changes.
What happens if the review form is sent late?
A late review can take place after the initial planned review. For example, if the planned review date was the 1st April but the notice was sent late the review could take place later than this date. This is providing that the new review date is 28 days on from the notice.
It is important to note that if your pitch fee review takes place later one year, it does not change the review date for the following year.
How is the fee review worked out?
As briefly mentioned above, the pitch fee review form outlines a formula that will help you calculate the relevant fee. The working out of this fee takes into account several factors. These include things like relevant deductions, recoverable costs and the current fee adjusted by the retail price index (RPI). The RPI number is worked out by using the last published figure 28 days before the review date. The official RPI number can be found on the ONS (Office of National Statistics) website.
The costs of improvements may be taken into account as a recoverable cost. However, certain conditions have to be satisfied. There needs to be a consultation on the improvements which should be for the benefits of the residents and not for other reasons. Also the recoverable cost can only be applied if the majority of the residents don’t disagree in writing.
The only way a deduction can be applied is if the deterioration or reduction has occurred since 26th May 2013. And only if it has not been taken into account during a previous review.
What else is included in a pitch fee review?
Since 1st April 2014 it became possible for the local authorities to charge for a site licence annually. The annual licence fee may be recovered through the pitch fee – divided pro-rata. However, this is a one-time, permanent addition to the pitch fee and cannot be added on more than once. Any subsequent licence fees paid by the site owner cannot be passed onto any residents.
The pitch fee can be reduced in any year, and the site owner is under no obligation to provide a pitch fee review notice. However, it is probably best that they do so, in order to inform all the residents of the changes.
What happens if a resident disagrees with a pitch fee increase?
Either party can make an application to the First-Tier Tribunal. If the review has been served at least 28 days before the review, then either party must submit an application no later than three months after the review date. If there is a late review, the submission period is four months.
The park home resident is not obligated to accept the proposed increase in pitch fees. If they don’t and do not pay the new fee, they do not end up owing the site owner anything in arrears. But they must still pay the current pitch fee.
If the park home resident doesn’t agree with the increase and accept to pay it, they have no obligation to notify the site owner. If this is the case and no agreement can be met then either party may apply to a Tribunal where they will decide. There are forms available online if you wish to apply to a Tribunal, but please look over them carefully before applying.
It seems complicated at first, but once you have familiarised yourself with the overall terms of pitch fee reviews it is fairly straightforward. The site owner has an obligation to provide all residents with a review notice and the proper paperwork. If all residents agree then the increase or change will go ahead. However, if you do not agree you can apply to a Tribunal as outlined above.
If you are thinking of selling your park home, visit the Sell My Group selling page.