The House of Commons Library has published a briefing paper explaining the 10% commission a site owner receives on the sale price of a mobile home. The paper also provides the history of the various reviews of payment of sales commission.
This follows the English Government’s recently published response to its review of park homes legislation, consequently confirmed that it will commission research to gather relevant data to enable a detailed assessment of the likely impacts of a change to the 10% commission charge on residents and site owners. A timetable for the research will be announced in due course.
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 to pay commission on the sale to the site owner. The maximum rate of commission is prescribed by the law and is currently set at 10% of the sale price.
Mobile home owners regard the commission charge as unfair and out of date, whilst site owners regard it as an important source of income.
Home owners argue that as a site owner does nothing to earn this commission, they do not see why s/he should receive it. They feel this wrong is compounded when home owners have increased the value of the home by adding porches, brick skirts, etc. at their own expense.
The site owner’s accept that they do nothing for the money but state that the commission is part of the site income, along with pitch fees and selling new mobile homes, which they have always expected to receive to make sites viable. Reducing or abolishing the commission would, they believe, result in having to increase pitch fees to make up the difference. There is some evidence that this occurred when commission was reduced from 15% to 10% in 1983.
The Welsh Government held a public consultation on the park homes commission rate from May to August 2017, inviting views on whether the rate should continue at its current level of 10% or be reduced or abolished. Results were published in May 2018 alongside the financial analysis to inform its decision. On 5 June 2018, the Minister for Housing and Regeneration, Rebecca Evans, announced the decision to lower the commission rate by 1 percentage point per year, over a 5-year period, until it is reduced to a maximum of 5% of the purchase price. The Welsh Government has launched a consultation on how best to implement the commission rate reduction. The consultation closes on 14 December 2018.
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