Utility charges for residential and holiday parks – the legal essentials
How should you deal with the supply of utilities such as gas and electricity to the park homes and holiday caravans on your sites? Our Parks Team looks at the key considerations, including how to charge for utilities as a reseller and what to know when utility companies supply the park homes or caravans on your site directly.
Navigating electricity and other utility charges for residential park homes and holiday caravans can prove challenging for park owners. But it's important to understand your legal responsibilities when it comes to the supply of utilities.
Implementing the correct processes and paperwork helps avoid any uncertainty and puts you in a stronger position to deal with potential disputes.
What services must your park supply and how should you charge for these?
The utilities you provide as a residential or holiday park depends on the facilities you offer but could include:
- internet access
- waste management
You can cover the costs of these services as part of your pitch fee or by charging for these separately.
Either way, you must make this clear and ensure your agreement with the park home or caravan owner is completed correctly. This avoids any confusion about whether the park should be providing a service or is able to make a charge.
A holiday park is free to agree which services it will supply to its holiday caravan owners. This should be set out in the pitch Licence Agreement – the British Holiday and Home Parks Association (BH&HPA) provides a model agreement with space for this.
For residential parks, you must agree with the park home owner which utilities the park is to supply and record this in the Written Statement.
How to handle utility charges and reselling services as a park owner
As a park business, you deal directly with the utility providers for your residential and holiday park sites, acting as a reseller for these services.
There are legal restrictions covering the reselling of some utility company supplies, so it’s essential to be transparent about how you will pass on these utility charges.
- Electricity and gas charges for park homes and holiday caravans
Both holiday and residential parks in Great Britain are subject to Ofgem maximum prices, which means you're not permitted to charge more than you have paid for these services and must be able to show how you have calculated the charges. Take a look at Ofgem guidance for information and example calculations.
- Water and sewerage charges for park homes
For residential parks, the resale of water and sewerage in England and Wales is governed by the Water Resale Order 2006. This states you must charge no more than the amount paid to the water company plus an administration charge (if the Express Terms in the Written Statement allow). There are similar rules in Scotland.
Should you provide utility bills to park home and caravan owners?
For residential parks, you must be able to provide evidence if requested that explains how you arrived at charges for gas, electricity, water, sewerage or other services payable under the Written Statement. This is likely to require disclosure of the bills or some other written evidence of the charges from the utility company.
In England and Wales, the Water Resale Order states specifically that, as the reseller, you must provide information to support a water bill within four weeks of a written request. Otherwise, the homeowner may pay a reduced charge of one-half of the water company’s average household water and/or sewage bill for the area.
These rules do not apply to holiday parks but you should manage requests carefully to avoid disputes, as disclosure of bills is likely to be required in any subsequent court proceedings.
Managing supply of utilities – what are park owners responsible for?
As the park owner, you have a level of duty to ensure the availability of services. You should be clear about how you will deal with repairs or interruptions beyond your control.
You must maintain any infrastructure you have installed within the park, such as pipes above ground level on the pitch. You can also set out reasonable expectations of the park home or caravan owners: for example, specifying that owners must take steps to protect external water pipes from potential frost damage.
Setting maintenance charges
You can include infrastructure maintenance costs within the pitch fee. For example, the BH&HPA model holiday Licence Agreement for holiday parks allows you to take into account changes in operating costs, which may include maintenance costs.
For residential parks, implied terms apply to pitch fee reviews. Recent judgements indicate it’s highly unlikely tribunals will allow pitch fee changes in response to usual fluctuations in maintenance costs. But you may be able to deal with improvements to services separately following consultation with homeowners.
How to deal with direct supply by utility companies
On some residential parks, core utilities are supplied directly to each home by the utility company.
- This requires the permission of the park owner by means of a wayleave (a private agreement between the utility owner and landowner, which must be renewed if the land changes hands) or an easement (which must be recorded with HM Land Registry).
- The agreement should make clear what repairs or changes may be made to infrastructure on the common parts of the park by the utility company. If other works take place without the park’s consent, you should contact the utility company and take legal advice straight away if agreement is not reached.
- Make sure all wayleaves and easements are disclosed when buying or selling a park.
It's important to seek legal advice before granting a wayleave or easement, so you can check the proposed terms are not skewed in favour of the utility company. In a dispute, a tribunal or court may need to make practical decisions about how the infrastructure should be maintained.
Navigating the supply of utilities as a park owner
The supply of utilities can be a complicated area for park owners. You must meet your legal responsibilities while ensuring you’re able to recover costs sufficiently for electricity and other utility charges.
How can Tozers help?
Our dedicated Parks team is on hand if you have any questions about the best way to deal with utilities or need advice on dealing with a dispute. Contact us for further support and bespoke guidance on your situation.
Our specialist Parks team truly understands the world you operate in, having been at the cutting edge of park law for over 65 years. We offer industry-specific guidance across all areas of your business – helping you stay ahead of problems, deal with day-to-day issues and make the most of commercial opportunities.