In this section
The long term
In this final part of the guidance, we will look at matters that might arise during the lifetime of your contract with your owners. As we stated in part 2, your contract should be clear and legible and should not contain any unfair terms. In most pitch licence agreements, both you and the owner are making a long-term commitment to one another. It is important that the owner has a clear understanding of matters that might arise, such as pitch fee increases, unacceptable behaviour, selling or transferring their holiday caravan / lodge, etc. It is in both your and their interest that they have a clear understanding of the implications of what they are signing up to.
Some of the most common issues for both owners and holiday caravan / lodge businesses are explored below.
Standards of behaviour
It is logical, for the benefit of everyone on your park, that standards of behaviour are defined. It is likely that your pitch licence agreement, along with park rules, will set out the behaviours that will be considered to be unacceptable and the consequences if these standards are not met. It is important that the standards of behaviour that you require are reasonable, can be objectively justified and are proportionate to the legitimate aim of ensuring the site remains safe. Any standards set by you should not be exploited as a means to unfairly terminate a licence agreement.
You should ensure that owners are given a copy of any rules, or procedures, before signing their pitch fee licence agreement. Failure to do this could lead to your rules becoming unenforceable.
Owners should be informed of any changes and the revised rules should also be easily accessible. Owners should not be subject to sanctions unless their failure to comply with the rules is serious and is unlikely to be resolved informally. Any sanctions must be proportionate and not go beyond the remedies that can be legally imposed in law. In particular, if a serious failure can still be remedied, the sanction must include a reasonable opportunity for the owner to do so before their agreement may be terminated.
To be sure that your standards of behaviour are fair, there should be a clear distinction between those behaviours that are totally unacceptable and those that are capable of being remedied. You should not include behaviours that, although uncomfortable to you, relate to an owner's right to complain to public authorities such as the Police, Environmental Health or Trading Standards services. The prohibition of lawful comment on social media may also be considered to fail the test of fairness, in which case it would not be binding on owners.
Use of threats to terminate a pitch licence agreement for behaviours that might not be considered to be unreasonable, such as raising a formal complaint, could be considered to be an aggressive practice under the CPRs, as well as being unfair; they could, therefore, constitute a criminal offence.
Selling or transferring a holiday caravan / lodge
Your pitch licence agreement will contain terms relating to the sale or transfer of a holiday caravan / lodge. This is likely to include the following options:
- sale of the holiday caravan / lodge to you
- private sale of the holiday caravan / lodge with it remaining on the pitch
- private sale of the holiday caravan / lodge off the pitch
- giving the holiday caravan / lodge to a family member, including following the death of the existing owner
Any term regarding the sale or transfer of a holiday caravan / lodge must be fair. It must also give a clear and understandable explanation of the owner's rights to dispose of their asset, when you must be given first refusal and to what extent you must be involved in the transaction. Owners should be given clear information on how they can dispose of their holiday caravan / lodge and any costs involved if they use your services to arrange the sale. Any costs you charge, or the way they are to be calculated, should be clearly set out and should be reasonable. You should avoid trying to impose fees that are unfair, such as a fee that is charged even if you do not provide any service in exchange.
You should not use your rights under the agreement to block a sale unfairly. Actions that might be considered to be unfair include:
- not allowing the new owner, following a private sale, to benefit from the same terms and costs under their new pitch licence agreement
- carrying out unreasonable checks on an owner from a private sale - for example, setting more challenging requirements for them (such as monitoring their use of social media) than you would carry out when making a direct sale to a new owner
- preventing an owner from making a private sale
Termination of your pitch licence agreement
Your agreement will set out the grounds upon which you or the owner can terminate the agreement. It should also be clear about what follows termination, which will include moving the holiday caravan / lodge away from its pitch, moving it off your holiday park and the costs of doing this. It is good practice to make clear to the owner that they have a duty to cooperate with you during this period, and you should allow them a reasonable time to arrange removal.
Your agreement should be clear about length of tenure, how long the owner can stay on the pitch, how long the holiday caravan / lodge can stay on the pitch and the implications of it not being kept in a good state of repair. Any terms regarding this must be fair.
Your agreement should also make clear your right to charge for removal and, to ensure fairness, that a reasonable charge will be made.
Your pitch licence agreement should contain information regarding pitch fees and what they include or don't include. To avoid a misleading action, this information must be clear and unambiguous.
When you are entering into a pitch licence agreement with an owner you are likely to be entering into a commitment lasting several years. Therefore, it is likely that you will need to revise the pitch fees from time to time. Your owner needs to understand the factors that will lead to a change in the fees, how the variation will be calculated and how they are able to challenge this. This will reduce the risk of the term being unfair and, in particular falling foul of paragraph 14 of the grey-listed terms defined as unfair in the Consumer Rights Act 2015 (CRA), which states:
"14. A term which has the object or effect of giving the trader the discretion to decide the price payable under the contract after the consumer has become bound by it, where no price or method of determining the price is agreed when the consumer becomes bound."
You should also describe the process whereby the owner can challenge you regarding a pitch fee increase. This should include whether a number of challenges must be received to require you to review your decision, or whether an individual request can trigger a review. Your terms should make clear how you will carry out this review, how such challenges must be communicated to you and how an owner can take their challenge to an ADR process or to court if you do not agree.
Your terms should also make clear that owners who do not accept the new pitch fee may terminate their contract without being worse off. As stated in part 1, any costs associated with termination will be subject to the test of fairness.
To avoid aggressive practices, under the CPRs, you should not harass owners who are challenging pitch fee rises, nor should you make it difficult for an owner to challenge an increase in court by insisting that they must engage in ADR first.
Owners making improvements to their pitch
It is likely that your pitch licence agreement and park rules will set standards for pitch improvements, to maintain the appearance of your park. As part of this you may set standards for the type and appearance of materials used and the competence of traders used to carry out this work, provided that these standards are objective and proportionate.
One of the grey-listed terms in the CRA is particularly relevant to this; it states it will be unfair if …
"10. A term which has the object or effect of irrevocably binding the consumer to terms with which the consumer has had no real opportunity of becoming acquainted before the conclusion of the contract."
This will be relevant if you limit owners, without good reason, to only buying materials for pitch improvements from you and/or only allowing contractors on your own list to carry out any improvement work. This could be considered to be an unfair term because the owner may not be aware of the implications of such a term when they agreed their contract with you. They should have the option to purchase comparable materials elsewhere or select their own contractors who can provide similar documentation, regarding their competence, as that provided by the contractors you have selected. This is particularly relevant when you are adding a commission to the prices and owners may be able find better prices elsewhere.
As we have explained elsewhere in this guidance, a diligent business will have a clear complaints process in place. Your complaints procedure should be made available to owners, and you should welcome feedback to help improve your business practices. This should include information regarding:
- who complaints should be made to, including relevant names and contact details
- how the complaints are made - for example, are complaints to be made in writing
- timescales for acknowledging and dealing with complaints
- an acknowledgement that you will respond to complaints that are sent on behalf of owners from professionals such as lawyers, Citizens Advice and Trading Standards
- reference to any code of practice that you belong to
You should ensure that your complaints procedures do not put unnecessary barriers in place - for example, some owners may not feel comfortable with putting their complaint into writing. Whatever your procedures, you should be clear that they can be varied for owners who are considered to be vulnerable. Vulnerable owners may, for example, wish to submit a complaint via an intermediary, such as a member of their family.
It is also good practice to keep records of these complaints, how you have responded, and any lessons learnt, or changes made as a result. You should also comply with the rules regarding ADR (covered in part 2).
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