Buying a park home on a residential mobile home site in Scotland.
The legal requirements for purchasing of a Park Home in Scotland are very different to buying a ‘bricks and mortar’ property. When you buy a Park Home, you buy the building but not the land it stands on and you rent the land (called the ‘pitch’) for the lifetime of the building. Legal conveyancing is therefore not a requirement, and neither are home reports or energy performance certificates. However, we would strongly recommend engaging the services of a solicitor to aid the purchase.
A park home is ‘conveyed’ by assignment of the contract between the purchaser and the Park Owners. A seller does not require the permission (or participation) of the Park Owners in the transaction other than to be informed of certain details of the transaction after a purchase price has been agreed. The Park Owners are also entitled to receive the rate of commission laid down by law (currently up to 10% of the purchase price).
PLEASE BE AWARE
If you wish to live permanently in a Park Home with full protection of your residency rights, in law, be sure you choose a site with a permanent residential licence and NOT a holiday licence. Check with the local council to establish whether the park you are considering has a full residential licence and not a holiday licence. Some holiday parks will have a 12-month licence and say that you can live there all year round, but this is illegal, and you could be evicted. Holiday Parks can also be referred to as leisure parks, 12-month licensed parks, or even residential spec. The term ‘residential spec’ refers only to the specification of the home, not the status of the Park itself. You can have a ‘residential spec’ holiday home! This can be confusing—whether unintentionally or by design. So, please check with the local council.
The contract documents which cover ownership and the right to station a park home on a given site is called the ‘Written Statement’. This document is a contract between a site owner and a resident and is enforceable in law BY both parties. See our video on the Written Statement here: Intro to Written Statement
The Written Statement is a legally binding agreement under the Mobile Homes Act 1983 and The Mobile Homes (Written Statement) (Scotland) 2013 and consists of a document which defines a number of matters such as; who the parties to the agreement are; the location and size of the pitch; the current pitch fee; the ‘Implied Terms’ of the agreement (which are set by law); the ‘Express Terms’ of the agreement (set by the Park Owners); and any Park Rules (again, set by the Park Owners). This agreement may be freely transferred to another party if the park home is sold, with the purchaser enjoying the same terms, conditions and current rate of pitch fee as the seller.
Selling a park home on a residential mobile home site in Scotland.
Park Home owners may now market their park home in the same manner as bricks and mortar homes. They may employ the services of an agent or sell privately and in both cases have the right to display advertising material on the pitch and on the home without the need for any permission from the site owner. The home may also be advertised freely in the media and the site owner has no locus in the matter nor can the site owner require advance notice of an intention to sell. The site owner DOES have the right to receive UP TO 10% (Maximum) of the sale price as a commission, depending on the individual written agreement.
In Scotland, the regulations differ from those in England in that there is no formal procedure or form filling laid down by law. While informal, sellers should be aware of their responsibilities under contract law as well as the Mobile Homes Act provisions and ensure that all the information given to a prospective buyer about the property, its location, condition, the written agreement and the park rules is completely accurate and not misleading in any way.
Another thing to bear in mind is that there is no legal conveyancing process with a park home. In law, a Park Home is a chattel and not a property in the normal sense. While you own a park home and it is in every way a ‘home’ you do not own the land it stands on and this is what makes it different. In a bricks and mortar situation, most owners also own the land that their house stands on and it is the land that is legally conveyed and registered, not the house! In a park home situation therefore, there is no legal requirement to employ a solicitor since there is no legal process but as in any major financial transaction you should seek professional advice.
SCOPHRA recommends the following simple procedure which ensures that the seller, the buyer and the site owner are treated equitably. A solicitor is not required within this process but again, as always with any major transaction, professional advice should be considered.
SUGGESTED PROCEDURE
Preparing your Park Home for Sale
As with any property, the condition of the property will be crucial to achieving a sale. First impressions count and a pristine pitch with fences, walls, driveways, Monoblock and gardens in a clean and tidy condition.
Next, is the exterior up to scratch? Are there any water penetration bubbles or bulges in the wall render, is the paintwork in good order (Was the home painted in the last three years as recommended by the manufacturer, if not, your home insurance could be invalid.) Check the skirt for cracks in the pointing, check underneath for water lying on the base and check if your chassis is in good order. (In the case of homes unoccupied for more than 30 days, the home insurance may be void. We suggest you check with your insurer of you are selling an unoccupied home.)
Moving inside, is there any damp, are fixtures and fittings in good order, does everything work, do you have current gas safety and electrical safety certificates in place? These are things a potential buyer will look for.
One simple way of ensuring things are tiptop is to commission a Park Home report or survey which will give you a professional full report on every aspect of the condition of your property with recommendations for any repairs required. This report will be invaluable when it comes to selling your home.
Stage 2 Marketing your Park Home
When you are satisfied that the home is ready for sale, you will need to compile a Schedule of Particulars to let people know about your home even if you are selling it privately. If you appoint an agent or adviser, they will prepare the schedule for you.
If you decide to employ either an agent or solicitor you have the right to invite your agent to the park to survey, value and market the property, to advertise it, to erect sales notices on your pitch and on your home, and of course potential buyers can visit without interference from the site owner. Ask viewers to park in designated areas however, to avoid giving offence to neighbours or better still park your car in the visitor’s area and leave your driveway free for your viewer. That creates a great impression – they can see themselves in the home already!
Dealing with Potential Buyers
Let’s hope you have lots of viewers and some potential buyers.
In Scotland, when selling a bricks and mortar property sellers require to have a Home Report available for potential buyers; this will include information about your property and a professional survey of the property with a valuation – all of which is a legal requirement.
The situation when selling a park home is different – no Home Report is required nor is a survey but a buyer is likely to have just sold a bricks and mortar home where they have had to pay to have these reports prepared and available for their buyers. Is it not likely that they will want the same information from you?
Completing the Sale of your Park Home
You now have some interest in your home, so what next?
Take it a stage at a time; discuss a price with your buyer but establish what that price will cover. Is the buyer buying all or some of your furniture, are the carpets and curtains included? This is important because you will require to pay the site owner a percentage of the price you obtain for the home, but not anything else. Your agent help you negotiate with potential buyers to obtain the best price for your home and ensure that only the equitable correct commission amount is due.
When a price is agreed and an entry date decided, have the buyer or their agent write to you or your agent, confirming the offer details in writing. but most agents will take away all the hassle and handle the whole transaction for you.
Scottish regulations require that at least 28 days before the date of entry, you provide the buyer with the following. (The 28-day timescale can be shorter if the buyer agrees to a shorter time but agreement must be in writing!) It is imperative that you do so.
Assigning your Written Agreement to the Buyer
When you receive a written offer which you intend to accept, the next step is to check timescales for the buyer to move in and for payment of the sale price and commission. In Scotland the commission is the joint responsibility of both Buyer and Seller but in practice the seller arranges payment of the commission direct to the site owner and the balance of the sale price to the seller. The commission must be paid before the buyer is permitted to take possession of the home.
Next step is assigning your Written Statement to the buyer. This is a legal requirement and must be done correctly, consult us on this.
The written agreement might be out of date. See a template of the agreement required by the legislation here. ( The Mobile Homes (Written Statement) (Scotland) Regulations 2013 )Most agreements will have an additional Section 4, the EXPRESS TERMS, and park rules attached which form part of the agreement
Make sure that your buyer meets the park rules in respect of age, pets etc. prior to agreeing a sale. This is your responsibility, and the sale can be voided if you do not do so.
Whilst there is no need for you to inform the site owner of the impending sale and assignment, courtesy suggests that it might be well to do so in advance of the settlement date so that you are clear what the site owner’s procedures are for receiving the commission payment. This will probably involve obtaining the site owner’s bank details to allow electronic transfer of funds on Settlement Day.
It is also courteous to let the site owner have the name of the buyer but this is not a requirement at this stage.
Handing over the Property
It is hand over day, and the removers are on the way.
Before the assignment can complete and the buyer move in, the park owner must have received his commission payment. It has become customary for settlements of property transactions to take place almost simultaneously – your buyer receives funds for the property they are selling; they pay you and you then pay the site owner so it is likely all of this will be done by electronic bank transfer over a period of a few hours. It is your responsibility to pay the commission – not the buyer’s responsibility (as in England) and you would be in breach of contract to both the buyer and the site owner if the commission is not paid timeously.
The site owner or his representative does not require to see or to sign the assignment form but the sale cannot go through until the commission payment has been received by the site owner. You should give careful thought to the time scales because the law states that “Neither the sale nor the assignation are to have any effect until the owner has received the commission.”
Make sure you hand over the original Written Agreement to the new owner.
SUMMARY
So to summarise…..