§ 3.39 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)My Lords, I beg to move that this Bill be now read a second time. This Bill is concerned with the rights of people who own the mobile home in which they live and rent the pitch on which it is stationed from the owner of the site. There are about 150,000 people living in 70,000 mobile homes in England and Wales. Ninety per cent. of those homes are owner-occupied. In Scotland, to which the Bill also applies, there are 4,000 mobile homes, 75 per cent. of them owner-occupied. I shall refer throughout my speech to "mobile homes", rather than to "caravans", because that name better describes the modern and sophisticated homes in which most people concerned now live. Mobile homes are a small but significant source of housing and it is important that those who live in them should have statutory protection. I am glad to be able to say that this Bill will strengthen the protection which is available to them.
The Bill will replace Sections 1 to 6 of the Mobile Homes Act 1975. It is needed because of the way the 1975 Act itself works. The Act, which was introduced by my right honourable friend the Minister for Local Government and Environmental Services as a Private Member's Bill, established a system of agreements between owners of mobile home sites and mobile home residents. The Act required site owners to offer agreements to residents to last for at least five years, with the option of a further three—that is, eight years 639 in all. The earliest agreements under the Act will begin to run out at the end of next year and legislation is needed now if those with agreements are not to lose the statutory protection which the Act provided for them.
The Bill which is before your Lordships now uses a system of agreements like the 1975 Act but it does not simply roll forward the provisions of the Act. In the first place, it will oblige site owners to offer new statutory agreements to all mobile home residents, not just those who have 1975 Act agreements—to all those on site at commencement and to those who come onto site subsequently. And the Bill contains several important differences from the 1975 Act.
First, the Bill puts the initiative to offer agreements firmly on site owners. Under the 1975 Act, a resident who came onto site after commencement had to take the initiative himself. He was obliged to notify the site owner in writing before coming onto site of his intention to occupy his mobile home as his only or main residence, in order to qualify for an agreement. With hindsight, it is perhaps not surprising that many residents have failed to meet this requirement, simply because they were unaware of it. The result is that they have not been offered an agreement under the Act. The Bill removes the requirement for advance notification. It imposes an absolute duty on site owners to offer statutory agreements to all residential occupiers.
Second, the Bill requires site owners to give residents, at the same time as they offer an agreement, a notice which we will prescribe by regulations. Our intention is that the notice will advise residents to think carefully before they decide whether to accept or refuse the agreement, to take legal advice and to read a booklet explaining the legislation which the Government will produce. The notice was not required by the 1975 Act and we believe that it can play a valuable part in enabling residents to find out what their rights are.
These first two points of difference between the Bill and the 1975 Act are very important. I have made the point that many residents failed to qualify for the offer of an agreement under the Act because they were unaware that they had to take the initiative in order to do so. In fact, only one-third of mobile home residents have 1975 Act agreements, largely because of ignorance. The low take-up of 1975 Act agreements I think demonstrates the value of the changes we are proposing in the Bill. I am glad to say that they have been warmly welcomed by the National Consumer Council, who take a considerable interest in mobile home matters.
It is not only in the procedures governing the offer of statutory agreements that the Bill improves upon the 1975 Act. The third major difference between the Bill and the Act concerns the security of tenure which it offers. Security of tenure is the most important benefit which agreements under the 1975 Act, and agreements under the Bill, provide for those who take them. I have said that the 1975 Act required site owners to offer agreements to last for five years, with an option for the resident to renew for a further three. The Bill will provide for agreements to last indefinitely, subject to the condition of the mobile home. The site owner will have an opportunity every 640 five years to apply to the court, or to an arbitrator agreed by both parties, to terminate the agreement on the grounds that the mobile home will not last a further five years. The other procedures for termination of an agreement, by residents and by site owners, are substantially the same in the Bill as they were in the 1975 Act.
Fourth, the Bill applies to owner-occupied mobile homes on sites owned by local authorities, as the 1975 Act did not. In doing so, it follows the precedent set by the tenants' charter in the 1980 Housing Act. The tenants' charter gave local authority tenants of conventional housing many rights previously enjoyed only by private rented sector tenants. It does not seem right to us that mobile home residents on local authority sites should continue to be denied the rights enjoyed by residents on private sites. This Bill will put right that anomaly.
The final major difference between the Bill and the 1975 Act is primarily a drafting one but valuable for all that. The Bill makes absolutely clear that a resident can challenge any of the terms of the agreement that is offered to him in the courts or before an arbitrator if he finds them unacceptable. A resident can also go to court if the site owner fails to offer him an agreement within the required period—that is, within three months of the commencement of the Bill or within three months of granting a right to a new resident to come onto site. In either case, the court has the power to require the making of an agreement on terms that it considers just and equitable. I think it is fair to say that Parliament intended the 1975 Act to work in this way but that its drafting is a little unclear. The Bill will clarify the position.
It will also remove any doubt there may have been under the 1975 Act about the ability of an arbitrator to resolve disputes between site owners and residents. The arbitrator must be a person on whom both parties agree. If they cannot agree, both sides retain the right to take their dispute to the court. But if they do agree, arbitration may offer a cheaper and quicker alternative to court action. The decision of the arbitrator will be binding, as is that of the court.
The Government believe that these changes which the Bill proposes will significantly strengthen the rights of mobile home residents. At the same time, they will not impose an unreasonable burden on site owners. The last thing that we want to do is to legislate site owners out of business. That is the effect that the Rent Acts have had on landlords in privately rented housing and the people to suffer have been those looking for housing—the potential tenants. This Government will not be responsible for closing down mobile home sites in the way that the Rent Acts have closed down so much of the private rented sector.
We believe that this Bill does strike a reasonable balance in strengthening the protection for residents without at the same time removing the incentive for site owners to provide sites. The Bill has been prepared in the light of the response to a consultation paper we issued in February of this year.The consultation paper invited views both on whether new legislation was needed and on what form it should take. I am glad to be able to tell your Lordships that the response to the consultation paper was a good one. We received comments from several Members of both Houses of 641 Parliament, from the national organisations representing site owners and residents, from nearly 100 individual residents, individual site owners and site-based resident associations. And a number of others less directly involved also responded, including the National Consumer Council, Age Concern, Shelter, the Royal Institution of Chartered Surveyors and the local authority associations.
Support for the need for new legislation was almost unanimous among those who replied—among site owners and their representatives as well as among residents and their supporters. It will not surprise your Lordships to learn that there was a variety of views about the contents of new legislation. I will not claim that we have been able to reconcile all the different views in the Bill before us now; it would not have been possible to do so. I will say, however, that the Bill carries forward the wishes of many of those who responded. Most wanted to retain the system of agreements used in the 1975 Act and to improve it. This the Bill does. Most respondents wanted the initiative to offer agreements placed firmly on site owners. The Bill imposes an absolute duty on them to offer agreements. Most wanted agreements to provide more security of tenure than the eight years required by the 1975 Act—subject to the condition of the mobile home. The Bill provides for agreements to last indefinitely but allows site owners to apply to the court, or to an arbitrator, to terminate an agreement, at each five-year point during the life of the agreement, if he believes that the mobile home will not last another five years.
In these respects and in others we have sought to meet the proposals put to us in the very helpful responses we received on the consultation paper. There is, however, one aspect of the Bill on which we intend to invite further views. That is the question of the commission or discount which site owners may charge residents on the sale of their mobile home on site. The Bill carries forward the same procedures as the 1975 Act for the sale of a mobile home. Residents who have agreements will have the statutory right to sell their mobile home on site, and assign the agreement. The mobile home must first be offered to the site owner at a fair market price less discount. Where a mobile home is later sold to a third party, the site owner is entitled to a commission on the sale.
The Bill also shares with the 1975 Act a provision enabling the Secretary of State to prescribe by order the maximum level of commission or discount which a site owner may charge. Under the 1975 Act, the maximum level is fixed at 15 per cent. We have today issued a new consultation paper inviting further views on the level we should prescribe for agreements under the Bill. This subject was one that aroused a good deal of comment in the responses to our first consultation paper. It has also attracted a good deal of interest in the media—particularly in the Daily Star and on BBC radio's "Checkpoint" programme, although I should make the point that the worst excesses which the media have reported have arisen in cases where the residents did not have 1975 Act agreements—so that the legal maximum of 15 per cent. did not apply.
The Government have yet to take a final view on what the prescribed maximum should be. Today's 642 consultation paper invites comments both on the arguments that have been put foward for and against the 15 per cent. level and on the level itself. We have placed copies of the paper in the Libraries of both Houses. It is our intention to lay an order prescribing the maximum level of commission and discount for agreements under the Bill as soon as the Bill achieves Royal Assent—to come into force on the same day as the Bill itself.
I have spent some time in my speech outlining the differences between the Mobile Homes Act 1975 and the Bill because I think that the most helpful way to consider the Bill is against the background of the Act. I hope, however, that it will also be useful to noble Lords if I run very briefly through the Bill clause by clause
Clause 1 imposes the duty upon site owners to offer agreements to all residential occupiers of mobile homes, both to those on site at commencement and to those who subsequently come onto site. The clause replaces Section 1 of the 1975 Act and, as I have said, removes the obligation in that section for new residents to notify a site owner in writing before coming onto site in order to qualify for an agreement. Clause 2 provides for the possibility of disputes arising over the offer of an agreement under Clause 1. The clause replaces Section 4 of the 1975 Act with, as I have said, clearer drafting.
Clause 3 provides for agreements under the Bill to be binding on any successor in title of the site owner and to be passed on to any member of the resident's family living with him at the time of his death. It replaces Section 5 of the 1975 Act with substantially the same effect. Clause 4 establishes the jurisdiction of the county court in England and Wales, the sheriff in Scotland. The effect of the definitions of "owner" 'and "protected site" in Clause 5 is to bring local authority owned sites within the scope of the Bill. Schedule 1 to the Bill is in two parts. Part I sets out in precise terms the terms with which an agreement must comply. Part II lists the matters which an agreement must cover. The schedule replaces Sections 2 and 3 of the 1975 Act.
That is what the Bill will do. But, before I close, I should also say a little about what the Bill will not do. The Bill applies to residents of mobile homes who own their home but rent the land on which it is stationed. It does not apply to people who rent their mobile homes nor to those who use mobile homes and caravans for holidays. Nor does the Bill affect two other pieces of legislation which apply to mobile home and caravan sites. It does not bear upon the Caravan Sites and Control of Development Act 1960, which empowers local authorities to license privately owned sites; nor upon the Caravan Sites Act 1968 which protects the residents of mobile homes and of caravans from harassment and illegal eviction, and which was introduced by the noble Lord, Lord Avebury, when he was a Member of another House, as a Private Member's Bill. The Bill is concerned solely with the subject matter of Sections 1 to 6 of the Mobile Homes Act 1975; that is with the agreements between site owners and residents.
I hope I have made clear that this Bill will strengthen the position of mobile home residents in a number of important ways. At the same time, the Bill does not 643 place excessive restrictions on site owners. I have no doubt that many site owners already do what the Bill will tell them to do. The relations between site owners and residents on most sites are very good. I make no apology for imposing additional duties on bad site owners. But I believe that the Bill does strike a good balance between residents and site owners and that it will enable the industry to develop in a healthy way for the future. I commend the Bill to your Lordships, and I beg to move.
§ Moved, That the Bill be now read a second time.—(Lord Bell win.)
§ Lord LeatherlandMy Lords, before the noble Lord the Minister sits down, I wonder whether he would clear up a little point of interpretation. We often see at camps where these vehicles are parked that some of them have had the wheels removed. In that condition, do they still come under this Bill under the guise of mobile homes?
§ Lord BellwinMy Lords, I wonder if the noble Lord, Lord Leatherland, would allow me to cover this point when I respond to the debate as a whole. I believe there are a number of other points which your Lordships may wish to put and I would like to come to them together if the noble Lord will permit.
§ 3.57 p.m.
§ Lord BishopstonMy Lords, the House will be grateful to the noble Lord the Minister for outlining the purpose of this Bill in commendable detail. We are grateful to him for outlining also the provisions that the Government have introduced in this measure to deal with what I am sure we all feel to be a pressing and urgent problem. The Minister has provided the House with information about existing legislation, which will be seen to have grown piecemeal over a period of many years, with successive Governments attempting to deal with the problems and attempting also to prevent evasion of the legislation in order to reduce if not eliminate injustices and exploitation.
The noble Lord the Minister has very commendably detailed the causes of the Bill and I do not want to repeat them, except to say something about aspects where we believe there should be some further amendment. The House will appreciate that not only Governments but also private Members have dealt with legislation. I notice in the list of speakers today the name of the noble Lord, Lord Avebury, who has made his contribution, and indeed there are others who are to speak who have also shown interest in various ways.
The Bill will be welcomed for its objectives and for attempting to be fair to all concerned, but there is a fear that it does not go far enough in some ways: either in extending the rights of mobile home residents or in securing adequate security and preventing exploitation or evasion of the rules, and these are important matters. I am sure that many of your Lordships will have visited mobile home sites. Many are idyllic and almost heavenly. Of course, we do not know what heaven is like, yet, but we do know that what appears to be heavenly can be hell if the relationships between the people who live there are far from harmonious. The Good Book is a sure guide to the prospects of 644 enjoying a harmony in heaven, but those who live in mobile homes will have to depend for their harmony on this Bill, as well as having some regard to the advice of the Good Book. In any case, I am sure your Lordships will agree that getting on with the site owner will be all important.
Now is the time and the opportunity not only to make a review of existing legislation but to ensure that it is thorough. The chance to review legislation again may not occur for a long time, and many thousands of people in the meantime will suffer grave injustice, insecurity and considerable worry if we do not do our job properly. It may be timely to make a few points to get the picture straight. The term "mobile homes" should not make us think that those who live in them need no more protection than those who live in caravans for a few weeks of the year. The sites which many occupy have permanence with the necessary planning consents, and often they have the features of small bungalows. I think it is very important to regard them as being homes in the proper sense of the word.
Much will be said during the passage of this Bill about site owners and others on whom the mobile home residents rely not only for provision of the site but also for essential services, amenities and a harmonious environment. I am sure that good site owners will welcome this clarification which the Bill can give and welcome any action to reduce friction caused by uncertainty about rights and responsibilities on both sides.
Let us not forget that the role of local authorities in all this is important. Anything we can do to bring harmony in the relationships of all concerned will be welcome, because mobile homes do provide, as the Minister has said, a not insignificant sector of housing stock. Therefore, this review is long overdue and we must ensure that all occupiers nationwide have equally just conditions notwithstanding the form of housing in which they may happen to live. Speaking of local authorities, one most important consideration in this Bill should be the role of local authorities, because legislation which is weak on enforcement is weak indeed. Local authorities are involved in planning and other aspects and should be in close touch with the problems of site owners and residents. Local democracy should demand that both the pitch owners and the residents can go to their local councillors and to the council to sort out some of the problems where the local authority has defined responsibility.
We all know that there have been considerable cuts in local spending and in local services. It is no good for Parliament to pass legislation putting certain tasks at the door of local councils who, because of Government policy, have been forced to reduce spending and their services. If we can clarify the rights and responsibilities of not only site owners and residents but local authorities also, we ought to ensure as well the means by which those duties can be carried out, or the legislation is ineffective and the continuing injustice widespread.
I note that in the Explanatory Memorandum we are told with regard to the effect on local authority manpower that the increase will be very minor, whatever that may mean. I am wondering if, in winding up, the Minister can tell us what is meant by "a very minor increase". Can we be told the difference 645 between "minor" and "very minor"? Very minor can mean small, or even infinitesimally small, increases. What does it mean? Can the noble Lord tell us whether there will be adequate resources for local councils to carry out the responsibilities which this Act may place upon them? If the increase in manpower is very minor it may almost amount to a slight decrease, because there is such a fine dividing line between one aspect and the other.
The other point which I think is important is the matter of knowing one's rights. I am very glad to hear that the Minister has placed certain information in the Library, and that information will be available to the wider public about the Bill and what it seeks to achieve. I am sure a word of commendation must go to the Government for the very substantial consultation they have afforded many organisations and individuals in coming to a conclusion as to what should be in this measure.
It may be thought, wrongly I think, that, as the acquisition of a mobile home is comparable to the buying and siting of a caravan, no greater legal safeguards are necessary. I suggest that, as many mobile homes are like small bungalows and other forms of conventional housing, a solicitor might be employed to carry out searches and make inquiries. I think the case for this kind of thing is just as great in either circumstance, and what matters is the extent of the purchase and the investment being made. Due to the inadequacy of past legislation it seems even more necessary for people to seek legal advice, especially if recourse to the courts, which can be costly and time-consuming, is to be avoided. If the legal aspects are to be as watertight as possible the role of the local authority in some aspects of supervision may suffice, but clearly the more information people have about their rights the better for all concerned.
Although it would appear that the number of people who live in mobile homes represents only a small proportion of the population, there is no doubt that occupiers have faced, and continue to endure, a multitude of problems; have very little protection and enjoy (if that is the word) inadequate rights. The aim of the Bill must be to give them the kind of security protection enjoyed by those who occupy and own the more traditional kinds of accommodation. I believe the Bill falls short of that and must be strengthened.
The definition in the Mobile Homes Act 1975 covers those who are mobile home residents, who own their mobile home and rent the pitch from a licensed private site owner. The Minister has already mentioned the extent to which mobile homes satisfy housing needs; I think he mentioned a figure of 150,000 living in such homes. He has already referred to the fact that the Department of the Environment has issued a consultation paper, on 4th February last, and there has been a very good response to the request for views.
Clearly the terrible housing situation, which has grown much worse in recent years with the lessening stock of council houses, the mounting deterioration of existing houses and the high cost of new housing and mortgages, has led many to look to mobile homes as a way out of their difficulties. Many of them fall into the grip of site owners, some of whom have given 646 sometimes desperate people what has been termed scandalous treatment. Living in such conditions is like living in a prison camp, if no alternative place is available, if you have nowhere else to go and if the conditions cannot be improved. As I said earlier, I think we ought to get the situation in perspective; this certainly does not apply to all sites, and in fact there are many good site owners, many happy sites where people live in harmony.
It is the job of the House and Parliament to close the loopholes to see that the high standards enjoyed by some may spread to the many. Although many mobile home owners are not really mobile at all, they have none of the security of those who live in equally immobile accommodation. They do not own the land on which they are pitched and often have the insecurity of caravan dwellers, who of course can be expected to move on. It is the young people who want to set up home after their marriage who may find later that they need larger and more permanent accommodation with more facilities when starting a family, and want to move on. There is the problem of those who want to leave a site and go elsewhere. They may not have a place on which to place their mobile home if they move it, and if it is left to be sold to the site owner then, of course, he dictates what price is going to be paid. Similarly, of course, these problems also apply to the elderly, who if they fall ill or want more adequate accommodation face the same situation.
Apart from the large percentage of mobile home residents who own their home and want to rent the site, there are, as I think the Minister mentioned, 10 or 15 per cent. who rent both the home and the site and have very limited protection under the Caravan Sites Act 1968, which is far less than the Rent Act 1977 protection available to other occupiers. So both owners and renters of mobile homes have little or no security or protection, and often they are affected by the site operator, who, living nearby, can seriously harass them day and night, making their life a nightmare if things do not go well. So full protection under the 1975 Act can come only with an agreement with the site owner. As I have said, only one-third of the mobile home owners enter into agreements; and I believe the Minister has given that figure as well. So, really, if more people are not covered, then the injustices remain—and this is a factor which should be looked at when we reach the later stages. The need, therefore, is to protect not only future residents but also those who have endured the injustices and the insecurity of the present system for many years.
The problems which residents face include the fixing of reasonable rents, the need for adequate notice before rents are raised, proper consultation facilities and the right to go to an arbitrator to fix a fair market rent or some other agreed amount. Of course, legal costs are also a problem, and many seek to avoid these, only to get what they think are cheaper standard or printed agreements but for which there may be an even higher charge. Of course, the foregoing depends on the residents knowing who the site owner is, and who to go to with complaints. The seemingly final arbitrator of complaints and grievances, the county court, does not always produce satisfaction, and the local authority may not always be able to deal with matters which may appear to be the concern of private 647 actions. The mobile home resident therefore often feels powerless in the face of exploiting site owners who use harassment to get the resident to submit to unreasonable demands. These are aspects which I think should be looked at during the passage of this Bill.
Perhaps I may summarise some of the points which I think might be considered at later stages—and I am grateful to the National Consumer Council for putting forward some of them. The Bill does not deal explicitly with the bringing of rented mobile homes within the provisions of the 1977 Rent Act; with the banning of premiums on the grant, renewal or assignment of statutory agreements; with restricting other charges connected with statutory agreements—for example, excessive charges for agreements and, indeed, for services and other things—and with the inability of the personal representatives of a deceased occupier to transfer a statutory agreement along with the home itself where it passes under the will to a non-occupier. I believe the Minister has said that the mobile home can only be passed on to members of the family or those resident in the building.
Then there is need to give the occupier rights to information such as were suggested in the DoE report of 1977. There must be information about planning permission; a summary of audited accounts (or copies of payments and receipts); a signed copy of site rules; and notices of change of site ownership and of proposals to sell the site. Surely those who live in the area and are partners on the site have a right to this information; and, of course, there must be an acceptance of reasonable rules.
The matter we are dealing with has been one of widespread and growing concern to many, and, as I say, I feel sure we are indebted to the many bodies who know from experience the problems which have to be dealt with and overcome. Numerous associations have been in touch with us all—and also, of course, with the Government, who initiated the consultation procedures—and I believe that the advice we have had must be heeded before the Bill gets to its final stages. I am sure we all appreciate the efforts of all these organisations and the help given to parliamentarians and the Government in taking a comprehensive view and in seeking to enact adequate legislation in the interests of all concerned.
Finally, let us bear in mind that we are not merely talking about mobile homes. They are houses which provide homes where the young people living in them can expect to fulfil their hopes, where the elderly can enjoy their memories and where all may have the right to expect, whether site owners or residents, to live in harmony. To bring about that desirable situation is our duty. I do not think it is going to be easy, but I am sure we shall all do our best to achieve it.