Holiday Park Law FAQs
Our Park Law expert, Melanie Burton, has answered some customer related issues which often arise on holiday parks, based on her wealth of experience in the industry.
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If you last reviewed/updated your customer agreements prior to 2014, then the likelihood is they are out of date. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) came into effect on 13 June 2014. The Consumer Rights Act 2015 (CRA) followed on 1 October 2015.
The CCRs imply an obligation on the part of the business to provide certain information to consumers before they commit to a purchase such as a caravan. If the information is not provided, then the contract is not binding on the customer. The CRA applies to all consumer contracts entered after 1 October 2015. The CRA simplifies and enhances the rights of the consumer when purchasing goods and services from a business. As a result, some of your existing contract terms may now be unlawful.
When a customer purchases a caravan, it is usually the case that the price will not change. Any change to the price of the caravan, after the purchase agreement is signed, must be agreed with your customer. That could be by way of a legally enforceable clause in the purchase agreement permitting you to review the agreed purchase price, in certain prescribed circumstances, otherwise you and the customer must agree a new price between you. If you are proposing to include a clause in your purchase agreements, allowing you to pass on to your customer any increased costs after the sale is agreed, then it is advisable to take legal advice to ensure the wording of the clause meets the requirement of fairness.
That will depend on the amount of the deposit taken what was agreed with the customer at the time of purchase, and the circumstances in which they are cancelling. If your purchase agreement provides for the deposit to be retained if the customer cancels, then within reason retaining all or part of the deposit may be lawful. However, if the customer is cancelling due to a failure on the part of the business to meet its obligations under the purchase agreement, then it may not be reasonable to retain any part of the deposit.
If the planning permission for the park imposes a restriction limiting use of the park for holiday and recreational purposes then it is necessary for the park owner to ensure holiday customers do not use their caravan for residential purposes.
Breaching the park’s planning conditions can have serious consequences for the park owner so this is likely to be considered a serious breach on the part of the customer, however it does not always follow that termination will be the next step. Requiring your customers to prove they live somewhere else other than on the park, by providing documentary evidence of their residential address, is the first step towards ensuring they are complying with the holiday restriction.
You should check the caravan owner has the relevant terms in their pitch agreement limiting their use of the caravan to holiday and recreational use and obliging them to provide documentary evidence in support of their residential address. If the customer does not then comply with any reasonable request that they provide proof of their address, you should follow any breach procedure contained in the pitch agreement. If despite having followed the relevant breach procedure, the customer has not provided the documentary evidence or provided an explanation as to why they have not done so, then termination may be the appropriate next step, if you are satisfied that they are living in the caravan. However, it may be necessary to take additional steps first to ensure the business has complied with its legal and contractual obligations.
Termination is the most serious outcome for the customer and is almost always challenged. It would therefore be advisable to take legal advice before terminating a pitch agreement.
Most pitch agreements expressly provide that a family member who has inherited the caravan may apply to the park owner for a new agreement, allowing them to continue to keep it on the park. If your agreement is silent on the point, then current consumer law is likely to dictate that the beneficiary of the caravan is still entitled to apply to you for a new agreement. It would not be unreasonable for you to make certain enquiries to ensure they will be suitable for the park, however your consent to providing a new agreement must not be unreasonably withheld.
Your ability to increase the pitch fee will be dictated by the terms in your pitch agreements. Your agreements should include a term allowing for the pitch fee to be reviewed and explain
- When in the year any proposed increase will take effect
- Any notice requirements
- The factors to be considered when calculating the proposed new pitch fee
The amount of any proposed increase will be dictated by those factors you are permitted to have regard to. Examples would be sums spent on improving the park which are of direct benefit to the customer and the rate of inflation.
If the pitch agreement provides that an administration charge is payable, in addition to payment for electricity consumed, then yes you can include an administration charge. The charge must be noted as a separate item on the bill. The amount of the charge must be a reasonable reflection of the actual cost incurred by the park in administering its electricity contracts with the caravan owners.
Time for a review?
Wolferstans offer a complimentary review of your customer agreements. As part of the review, we will
- Tell you whether your agreements meet the requirements of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 the Consumer Rights Act 2015
- Suggest how you might correct any issues
- Offer you a fixed fee quote for any work required to remedy any issues we have identified.
For further information about any of the issues discussed in this article, or to take advantage of our complementary review, contact our Park Law specialist, Melanie Burton.