FIT AND PROPER PERSON TEST – IMPLIED TERM 18

The relevant implied term is 18(1)(ba) which states: 
18-(1) When determining the amount of the new pitch fee particular regard shall be had to- 
(ba) 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. 
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SITE LICENCE FEE IN THE PITCH FEE – IMPLIED TERM 18

The relevant implied term is 18(1)(b)(a) which states: 
18-(1) When determining the amount of the new pitch fee particular regard shall be had to- 
(b)(a) 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.

The Mobile Homes Act 2013 introduced several changes one of which was to give more powers to the local authorities regarding the site licence and the licence conditions. One change was that it allowed the local authority to charge an annual fee for the site licence. Under the implied terms this charge can be passed onto the residents at the following pitch fee review.  
This means that at the next pitch fee review following the imposition of the annual site licence fee by the local authority on the site owner the amount of the fee can be divided by the number of occupied homes and added to the pitch fee. It then becomes an integral part of the pitch fee which is usually increased by the RPI each year. Because this legislation came into force on 1 April 2014 the fee contribution cannot be added to the pitch fee at a review after 1 April 2015. 
This has resulted in a few problems in that some local authorities have not produced a fee charging policy and invoiced the site owner in time for it to be considered at a pitch fee review before 1 April 2015. Some site owners have tried to add it anyway and this has caused disputes. Also some local authorities have increased the annual licence fee in the second year and some site owners have tried to pass on this increase. 
To answer these problems a couple of tribunal cases has resulted in a decision that the site licence fee contribution could be treated as a separate charge separate from the pitch fee. We in IPHAS have always advised that the implied terms clearly state the licence fee contribution must be treated in accordance with implied term 18(1)(ba) and added to the pitch fee but not after 1 April 2015. 
Recently there have been two appeals to the Lands Chamber (the Upper Tribunal) on this subject and the decisions have now been issued. 
At a park in Stoke on Trent the local authority was slow in issuing the fee charging policy and in invoicing the site owner but the site owner wanted to add it to the pitch fee anyway. The residents applied to the First-tier Tribunal who ruled that the fee contribution could not be added to the pitch fee because it was after 1 April 2015. The park owner appealed to the Lands Chamber. 
At a park in Hertfordshire the local authority increased the annual licence fee from £200 to £300 in the second year. The park owner wanted to add this increase to the pitch fee. The residents disputed this for two reasons; they relied on the implied term in that the contribution could only be added to the pitch fee in the first year and also the increase was for problems with compliance with licence conditions and therefore was a problem with site management and not the fault of the residents. The site owner applied to the First-tier Tribunal who did not allow the increase but said that the licence fee contribution could be considered separately from the pitch fee. The site owner and the residents appealed to the Lands Chamber. 
The decisions of these two appeals have now been issued and the judges have spent a great deal of time in considering their decisions and both judges have conferred with each other to produce their final determinations. 
First the good news. The Lands Chamber have decided that the implied term 18(1)(ba) must be interpreted literally. That is that the contribution for the annual site licence fee must be added to the pitch fee in the first year and that period ended on 1 April 2015. 
Now the not-so-good news. The Lands Chamber have decided that it would be unreasonable to expect that any changes in the site licence fee could not be passed on to the residents. Similarly, if a local authority was late in implementing the annual site licence fee it would be unreasonable to prevent the site owner from passing this on to the residents. Implied term 18 lists a number of factors to which regard must be had when reviewing the pitch fee. This list is not exhaustive and any other factors can be considered under implied term 20(A1). 
This does not mean that a park owner can add anything to the pitch fee under term 20(A1); it must be a ‘weighty’ factor that is it must be a significant extra cost which has a direct effect on the maintenance or management of the site and it would be unreasonable to disallow it. It would be open to residents to dispute such an item if they believed it to be not a ‘weighty’ factor.

In the case of the Hertfordshire park the increase of the site licence fee was not allowed to be passed on to the residents because the Lands Chamber considered the increase to be related to the management of the site. 
In the case of the Stoke on Trent park the annual licence fee was allowed to be passed on in the pitch fee because the delay in invoicing the park owner was the fault of the local authority. 
 
The Appeal cases are: 
LRX/93/2016 Mrs Toni Vyse v Wyldecrest Parks 
LRX/103/2016 Wyldecrest Parks v P. Kenyon & others.