BUYING A PARK HOME IN SCOTLAND
The purchase of a park or mobile home in Scotland is similar in procedure to the sale of a bricks and mortar property but the legal requirements are very different. When you buy a park home you buy the property but not the land it stands on and essentially rent the land for the lifetime of the home. Legal conveyancing is therefore not a requirement, home reports and energy performance certificates are not required by law but these may still be desirable. A park home is ‘conveyed’ by assignment of the contract between the resident and site owner. A seller does not require the permission or participation of the site owner in the transaction other than to be informed of certain details of the transaction after a bargain has been struck and to receive the rate of commission laid down by law.
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 PARK.WHILE SOME HOLIDAY PARKS MAY HAVE A PERMANENT LICENCE FOR A PROPORTION OF THEIR HOMES, OTHERS ADVERTISE HOLIDAY HOMES OR LODGES FOR PERMANENT RESIDENCY BUT WITH A HOLIDAY AGREEMENT. THESE AGREEMENTS ARE NOT PROTECTED IN LAW FOR PERMANENT MAIN HOME RESIDENCY AND THE AGREEMENTS FOR SUCH PARKS ARE NOT ‘WRITTEN STATEMENTS’IN TERMS OF THE MOBILE HOMES ACT.
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 for both parties. The Written Statement is a legally binding agreement under the Mobile Homes Act 1983 and The Mobile Homes (Written Statement) (Scotland) Regulations 2013 and consists of a statement of who the parties to the agreement are, the location and size of the pitch, the pitch fee, implied terms of the agreement which are set by law, express terms set by the park owner and any park rules. This agreement may be freely assigned (transferred) to another party if the park home is sold, with the purchaser enjoying the same terms, conditions and rate of pitch fee as the seller. The site owner may not change these terms.
Park Homes Scotland Ltd recommends the procedure below based on The Mobile Homes (Written Statement) (Scotland) Regulations 2013 and The Mobile Homes Act 1983 (Amendment of Schedule 1) (Scotland) Order 2013. (See Appendix 1). The Order extended the provisions of the Regulations to all park home agreements in Scotland including those contracted prior to 1 September 2013. Park Homes Scotland Ltd Property Agency can act for you in this whole process in Scotland, much as an Estate Agent or Solicitor would DO.
BUYING A PARK HOME ON A RESIDENTIAL MOBILE HOME SITE
Park Home living is a relatively new concept in Scotland although it is well established elsewhere in the UK. South of the Border, park homes change hands for very substantial sums particularly in desirable locations but the reasonably priced homes in Scotland offer a genuine alternative to a bricks and mortar bungalow.
Some readers will already be familiar with the concept if they have owned a static caravan holiday home although in that case the residence period annually would have been restricted.
If you have experienced a residential holiday park you will no doubt, be aware of the easy pace of life - all those people on holiday. To some extent this is even more pronounced in permanent residential park home estates. Since purchasers are (generally) restricted to the over 50s, most have deliberately bought into (usually) a country or seaside lifestyle which is detached from urban life and yet close to modern amenities. Children may not be resident i.e. registered for school, (although young visitors are welcome) so the peace and calm of the Park is rarely disturbed.
Do not be put off by the occasional ‘caravan’ or ‘mobile home’ tag Park homes are not caravans they are just modern factory built bungalows often with better amenities than some bricks and mortar homes but their legal definition is a ‘mobile home’.
There are a number of differences however and many myths. In law, a Park Home is a ‘chattel’ (like a car or caravan) and is not ‘heritable property’ in the normal sense, so there is no legal conveyancing of the property. When you own or purchase 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!
So with a park home, you own the home but you do not own the ground it stands on. This belongs to a site owner who charges a rent for the right to station your home on the land and for the garden surrounding your home. This rent usually covers roads, street lighting and amenities within the park. Rents are strictly controlled by law and Council Tax is generally Band A, thus offsetting the rent to a great extent. This is where the Written Statement mentioned earlier, comes into play; this is the contract, between you, the home owner and the site owner, which is strictly controlled by law and residents have long term protection for their homes.
A park home is a heritable asset; it is yours for as long as you chose to live there (there are strict rules on security of tenure) and you can will it on to your family or you can sell it if you so wish, although the sale is subject to certain conditions. The most specific condition is that when you sell a park home, under current legislation, the site owner is entitled to (up to) 10% of the selling price as a commission. You can obtain a loan to buy a park home although not a traditional mortgage.
Park Home owners now market their park homes in the same manner as bricks and mortar homes. Homes are advertised in the media and you may be reading this because you have seen a home that interests you. In Scotland, government regulations cover transfer of a home from one owner to another ensuring that the Written Statement is properly and legally transferred but there is no legal requirement for a seller to produce a Home Report or Survey. Scottish and English Mobile Homes Regulations differ from each other and buyers in Scotland should be particularly aware of the seller’s responsibilities under contract law as well as the Mobile Home Acts provisions to 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.
Park Homes Scotland Ltd 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 as always with any major transaction, professional advice should be sought. Park Homes Scotland Ltd can assist you in the following steps of the purchase and transfer process and also act for you in a professional capacity much as an Estate Agent or Solicitor would.
Stage 1 Looking for a Park Home for Sale. (CHECK OUR 'FOR SALE' LIST FIRST)
As with any property, the condition of the property will be crucial to achieving a sale, so what should you check? First impressions count and a pristine home with fences, walls, paved or Monobloc driveways, and gardens in a clean and tidy condition will sell best. Next, is the property 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. Check the skirt for cracks in the pointing, check underneath for water lying on the concrete base, for any cracks or movement in the base and check if the chassis is in good order. Moving inside, is there any damp evident, are fixtures and fittings in good order, does everything work, is there a current gas safety and electrical safety certificates in place? These are things to look for.
One simple way of ensuring things is in tiptop condition is to commission an Inspection & Condition Report from the Park Homes Scotland Ltd Property Agency which will give you a professional report on every aspect of the condition of the property with recommendations for any repairs required. This report will be invaluable when it comes to buying or negotiating the price for a home and is a bargain at £195.00* plus travel expenses from our offices and VAT. (The seller’s permission will always be required for us to proceed with an inspection)
Stage 1 Choosing your Park Home
When you see a home that interests you, ask for a Schedule of Particulars to find out more about the home, particularly if it is being sold privately. Schedules can often be found online.
Sellers are free by law, to erect sales notices on their pitch and on their home, and of course potential buyers can visit without interference from the site owner or anyone else. Viewers should park in designated areas however, to avoid giving offence to neighbours. If you are visiting a gated site park in the visitor’s car park and proceed to the home, you want to view. It is your right to do this unhindered by the park management.
Park Homes Scotland Ltd will undertake to assist you in locating and purchasing a home. Click here for current properties.
Stage 3 Dealing with sellers
In Scotland, when selling a bricks and mortar property, sellers are required by law to have a Home Report and an energy performance certificate available for potential buyers; this will include a professional survey of the property and 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 or energy performance certificate required but, as a buyer, you will likely to have just sold a bricks and mortar home where you have had to pay to have these reports prepared for your potential buyers. You should certainly ask for a current inspection report on any property you are seriously considering. Do not make any commitments without a detailed property inspection!
At Park Homes Scotland Ltd, we are increasingly seeing a demand from potential buyers for this level of information on park homes for sale. To meet this demand, Park Homes Scotland Ltd has developed the ONLY Park Home Property Report in the UK. The Park Home Property Report incorporates a Park Home Information Schedule and Park Home Property Survey Report and is based exactly on the Scottish Governments Home Report forms but adapted to be relevant to park homes. No other Property agency can provide this exclusive service in Scotland. It may be worth asking your seller for such reports on any property you are considering before making any offer.
Stage 4 Completing the Purchase of your Park Home
You now have identified a home you like, so what next?
Take it a stage at a time; inspect the property, agree a price with the seller but establish what that price will cover. Does the price include say, a garden shed? Is the seller leaving all or some of the furniture, are the carpets and curtains included? This is important because the seller will require to pay the site owner a percentage of the price he obtains for the home, but not anything else. If you are buying the home unfurnished and with no extras, for say, £100,000 then the seller will likely be due to pay the site owner (up to) £10,000 depending on the terms of the written agreement. If that £100,000 includes the garden hut, carpets furniture, etc. worth £2000 then you are buying the home for £98,000 and the seller will be due to pay commission of £9800.
When a price is agreed and an entry date decided, contact the seller or their agent confirming the offer details in writing. Now the countdown starts.
Stage 5 Receiving the Assignation of the Written Agreement from the Seller
When you place a written offer, the next step is to check timescales. Scottish regulations require that the seller provides the buyer, at least 28 days before the date of entry, with the following:
A copy of their Written Statement
A copy of the Park Rules
A forwarding address for themselves
(The 28-day timescale can be shorter if the buyer agrees to a shorter time but that agreement must be in writing!)
Make sure that you meet 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 the seller 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 both clear what the site owners procedure is 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.
The written agreement might already have an assignment form attached but this is likely to be out of date. An updated version of an acceptable form is available exclusively to our clients from Park Homes Scotland Ltd Property Agency which requires to be completed between yourself and the buyer and each of you keep a copy. Park Homes Scotland Ltd Property Agency’s transfer service covers all these issues for you
Stage 6 Handing over the Property
It is hand over day and the removers are on the way.
Before the assignment can be completed and you move in, the park (site) owner must have received his commission payment. It has become customary for settlements of property transactions to take place almost simultaneously - the buyers receives funds for the property they are selling, they pay the seller of the park home who in turn pays 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 the seller’s responsibility to pay the commission – not the buyer’s responsibility and the seller 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 also obtain a receipt for the commission payment from the seller. 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.” Park Homes Scotland Ltd Property Agency’s transfer service covers all these issues for you.
To facilitate the process Park Homes Scotland Ltd Property Agency will provide clients with a ‘Notice of Assignment’ form for notification of the assignment to the park owner. Park Homes Scotland Ltd Property Agency’s transfer service covers all these issues for you.
Make sure the seller hands over the original Written Statement to you, the new owner, together with any warranties, instruction manuals, and ask for a note containing park and local information such as bin collection arrangements, the site culture, any upcoming events and the details of a Residents Association (if one is available). You can, of course, retain Park Homes Scotland Ltd Property Agency - our transfer service covers all these issues for you.
So to summarise....
Check if the property has current condition report from Park Homes Scotland Ltd
Ask for a Park Home Property Schedule of Particulars showcasing the home.
Buy the home privately or through an agent such as the Park Homes Scotland Property Agency
Ask the seller for a Park Home Property Report comprising a home information schedule, a park home survey and valuation- available exclusively from Park Homes Scotland Ltd.
Ensure that the seller has the original Written Agreement papers ready, in advance, to hand over to you.
Negotiate the purchase of the home, agreeing a price for the home and any extras that will be included.
Ensure that you receive a copy of the Written Agreement, the park rules and a forwarding address for the seller 28 days in advance of Settlement Day. Make sure that you, the 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.
Find out in advance, the park owner’s procedure for paying over the commission payment and for their receiving the assignment form.
Complete the assignment form with the seller and complete the notice of assignment form. You or the buyer should give the site owner the notice of assignment and will probably also need to provide your bank details to the site owner for rent payments, depending on local arrangements.
Ensure the Site owner’s commission is paid prior to final handover of the home. The transaction cannot complete until the site owner has received this payment. No other payment such as rent guarantee payments or such like can be demanded from you or the seller. (The site owner is specifically prohibited by the regulations from requesting any payment from you other than commission.) Receive the original Written Agreement from the seller and the process is complete, Park Homes Scotland Ltd Property Agency’s transfer service covers all these issues for you.
BUYING YOUR PARK HOME?
Park Homes Scotland Ltd Property Agency can act for you in this whole process in Scotland, much as an Estate Agent or Solicitor would. We will be happy to provide you with a sample sale agreement. A solicitor is not required in these transactions.
FOR MORE ASSISTANCE CALL US ON 01506 530344