BRIEFING PAPER Number CBP8505, 20 February 2019

Consumer protection: By Lorraine Conway

leisure homes

Contents: 1. 2. Other options 3. Recent Parliamentary Question

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 Consumer protection: leisure homes

Contents

Summary 3 1. Consumer protection 4 1.1 Consumer Rights Act 2015 – unfair terms 4 1.2 Enterprise Act 2002 – enforcement orders 5 1.3 Consumer Protection from Unfair Trading Regulations 2008 - duty to trade fairly 5 2. Other options 6 2.1 Possible and 6 2.2 Where to go for help? 6 3. Recent Parliamentary Question 7

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Summary

Summary The current law in England and Wales distinguishes between a mobile home and a permanent leisure home. The Mobile Homes Act 1983 applies to residents of sites with residential planning permission; a permanently parked leisure home is not caught by the Act. However, leisure home owners are protected under consumer rights legislation and all leisure home parks are required to be licensed by local authorities under the Caravan Sites and Control of Development Act 1960. In respect of leisure home sales and pitch agreements, the rights and responsibilities of both contracting parties will be governed by the terms and conditions of the contract they agreed. In addition, between leisure home owners and park owners are subject to Part 2 of the Consumer Rights Act 2015, which protects consumers from enforceability of unfair terms in contracts. In addition, under the Consumer Protection from Unfair Trading Regulations 2008 there is a duty on all businesses to trade fairly. This Commons briefing paper provides a brief and general overview of the existing protections available to leisure home owners under consumer legislation. In the event of a dispute, constituents should seek proper legal advice based on a full appraisal of the terms and conditions of the original sale contract and all other relevant documents. 4 Consumer protection: leisure homes

1. Consumer protection 1.1 Consumer Rights Act 2015 – unfair contract terms The Consumer Rights Act 2015 (CRA 2015) came into force on 1 October 2015. Part 2 of the Act recognises that, in many circumstances, consumers have no power or influence over the details of the terms which they are asked to agree to when entering into consumer contracts. The main aim of Part 2 of the CRA 2015 is to protect consumers against one-sided contracts favouring businesses. Specifically, Part 2 covers the following: • a consumer contract; and • a consumer notice to the extent that it relates to rights or obligations between a trader and a consumer or purports to exclude or limit a trader’s liability to a consumer.1 Under Part 2, written terms of a consumer contract or notice must be transparent (in plain and intelligible language and legible if written). They must also be fair. A term will be unfair if, contrary to good faith requirements, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. An unfair term or notice will not be bounding on the consumer unless the consumer chooses to be bound by it. An example of an unfair term (depending on the exact circumstances) is one that allows the trader to use enforcement methods that could involve violation of the consumer’s privacy or property rights. Wording might also be unfair if it would allow excessive financial burdens to be imposed on the consumer. Part 2 of the Act also ‘blacklists’ certain terms and consumer notices, making them automatically unenforceable and open to challenge, without the need to consider the fairness provisions. An example of blacklisting found in Part 2 of the Act is wording that would exclude or restrict liability for death or personal injury resulting from negligence. It is important to note that a term of a consumer contract may not be assessed for fairness where it specifies the main subject matter of the contract or the assessment is of the appropriateness of the price payable, provided the term is transparent and prominent. Where a clause is not binding because it is unfair, the rest of the contract will take effect as far as practicable. Where a term can have more than one meaning, the interpretation most favourable to the consumer will usually prevail. The Competition and Markets Authority (CMA) is the principal enforcer of Part 2 of the Act. The CMA and Trading Standards Services have powers to pursue legal action to stop a business using terms and consumer notices that are unfair or a breach of the transparency requirement, as well as those that are blacklisted. If necessary, this will be achieved by seeking a court order. If a business is using, proposing to use or recommending wording that appears to be in breach of the transparency requirement, or is unfair or blacklisted under the CRA 2015, the CMA (or another listed regulator) can seek an injunction from the court against the business under the Act. If, however, a business gives a satisfactory undertaking to the CMA (or other regulator) to stop using this wording, or to revise it, court proceedings will not be necessary, provided that the agreed course of action is fulfilled.

1 A notice does not have to be in writing; it is any communication or announcement intended to be seen or heard by a consumer

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Individual consumers have their own legal rights under the CRA 2015, independent of the powers of the CMA or other regulators. However, a consumer should seek legal advice before taking any step that is liable to result in court proceedings.

1.2 Enterprise Act 2002 – enforcement orders Part 8 of the Enterprise Act 2002 (EA 2002) gives the CMA (and other enforcers) separate powers to investigate and seek undertakings or enforcement orders in relation to breaches of consumer law generally, including the CRA 2015. Use of these powers may be appropriate where, for example, issues arise under several different pieces of consumer legislation. An undertaking or enforcement order under the EA 2002 may, in certain circumstances, include provisions offering redress for consumers who have suffered loss (which can include monetary compensation). However, it is important to note that the CMA has no power to take up consumers’ individual cases for them, or to provide advice on private disputes.

1.3 Consumer Protection from Unfair Trading Regulations 2008 - duty to trade fairly In addition to the CRA 2015, there is a duty on businesses to trade fairly under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The Regulations prohibit traders in all sectors from engaging in unfair commercial practices (mainly marketing and selling) against consumers and set out rules that determine when commercial practices are unfair. The CPRs apply to business-to-consumer transactions and apply to conduct before, during and after the contract is made. The regulations are enforceable by Trading Standards through the civil and criminal courts. 6 Consumer protection: leisure homes

2. Other options 2.1 Possible breach of contract and misrepresentation In respect of leisure home sales and pitch agreements, the rights and responsibilities of both contracting parties will be governed by the terms and conditions of the contract they agreed. Contract law is complex, and much would turn on: what was said by both parties before the contract was made; the relative bargaining power of both parties; and whether any were made by either party. The Misrepresentation Act 1967 exists to protect consumers from false claims made by a seller either fraudulently, negligently or innocently before a contract is made that induce them into buying something, or entering into a contract. The general remedy for misrepresentation is cancelling or unwinding the contract so that both parties are put back in the position they were in before they made the contract. In certain circumstances, may be available either in addition to or as an alternative to unwinding the contract.

2.2 Where to go for help? As already mentioned, in the event of a dispute, constituents should seek proper legal advice based on a full appraisal of the facts and sight of the original sale contract and other relevant documents. In addition to a solicitor, advice can be obtained free of charge from their local Citizens Advice Bureau (CAB). The Citizens Advice website contains a useful search tool to help people find their nearest CAB. The Library’s briefing paper, “Legal help: where to go and how to pay” (CBP 3207) may also be of help to the constituent.

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3. Recent Parliamentary Question

On 28 January 2019, Helen Whately MP asked the Government what steps were being taken to tackle the exploitation of park home residents. The exchange between the Member and Mrs Heather Wheeler, the Parliamentary Under-Secretary of State for Housing, Communities and Local Government, is reproduced below: Helen Whately (Faversham and Mid Kent): What steps is the Department is taking to tackle the exploitation of park home residents. The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs. Healer Wheeler): The Government are committed to ensuring that park home residents are better protected. We have set out a range of measures to review the park home legislation and tackle the abuse and financial exploitation of residents. New legislation will be introduced when parliamentary time allows. Helen Whately: Residents of leisure park homes in my constituency appear to have been mis-sold their properties by rogue site owners, and they are now vulnerable to exploitative charges and intimidation. Will my hon. Friend consider extending the provisions of the Mobile Homes Act 2013 to give leisure home owners more rights and protections, and will she take a broader look at the mis-selling and misuse of leisure homes? Mrs Wheeler: My hon. Friend has been a thorough champion on behalf of residents of leisure park homes. The situation is iniquitous. The Mobile Homes Act applies to residents of sites with residential planning permission, but leisure home owners are protected under consumer rights legislation. My Department is working with the Department for Business, Energy and Industrial Strategy, which is responsible for consumer issues, to better communicate those protections to leisure home owners.2

2 HC Deb 28 January 2019 c.469-470

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