This House of Commons Library Briefing Paper explains the requirement to pay 10% commission on the sale price of a mobile home to the site owner and provides information on various reviews of that requirement. Mobile home owners regard the charge as "unfair and out of date."Jump to full report >>
When an owner of a mobile/park home situated on a site covered by the Mobile Homes Act 1983 (as amended) sells their home, there is a requirement on the new buyer to pay commission on the sale to the site owner. The maximum rate of commission is prescribed in regulations made by the Secretary of State and is currently set at 10% of the sale price. The general justification for the charge is that what is sold is an amalgam of the value of the park home and the value of the site on which it is placed.
Mobile/park home owners regard the requirement to pay commission as unfair and outdated. Various organisations, such as Park Home Owners Justice Campaign (PHOJC), are campaigning for reform. The PHOJC argues that the 10% charge should be based on the difference between the last sale price and the current sale price. In particular, PHOJC states that, when compared to the commission earned by estate agents on the sale of traditional housing, the commission payable on the sale of a park home is “unfair.” PHOJC organised a Three Nations Protest Rally on 21 March 2017 to challenge the 10% commission charge.
In 2015, the Government set up a Park Homes Working Group “to identify evidence of poor practice where it exists, and investigate how best to raise standards and further tackle abuse”. The Working Group, which included national resident groups and industry trade bodies, considered the issue of the 10% commission charge, but was unable to reach a consensus.
The Government is currently conducting a two-part review of mobile (park) homes legislation. The second part of the consultation closes on 16 February 2018. A government response to the call for evidence (Parts 1 and 2) will be published later in 2018. The review does not call for evidence on the 10% commission charge.
On 25 May 2017 the Welsh Government launched a public consultation on the park homes commission rate, inviting views on whether the rate should continue at its current level of 10% or be reduced or abolished. The consultation closed on 17 August 2017. The Welsh Government is commissioning further financial analysis to inform its decision.
In 2011, the Scottish Government consulted on proposals to amend the implied terms in the Mobile Homes Act 1983. The consultation invited views on the commission on mobile home sales, and its relationship to other sources of business income for site owners, such as pitch fees. In 2013 the Scottish Government confirmed its decision to retain the 10% commission rate.
Commons Briefing papers SN07003
Authors: Wendy Wilson; Hannah Cromarty