The effects of coronavirus on your legal rights and our service.

Complete the form below to ask us a question or make an enquiry. We’ll get back to you via phone or email as soon as possible.

Insights

What are the legislative changes to the commission on the sale of park homes?

Posted on 19th July 2022 in Parks

Posted by

Neil Darby

Solicitor
What are the legislative changes to the commission on the sale of park homes?

The background

In 2017, following the implementation of the Mobile Homes Act 2013 the Government undertook a review to consider the effectiveness of the changes made by the Act and to consider the implementation of further legislation within the parks sector.  Some of the recommendations from that review have now been implemented.  The new Fit and Proper persons test being one such example.

Whilst outside the scope of the review, the question of commission on park home sales (currently fixed at a maximum of 10%) arose as a result of submissions made by residential park home owners during the course of the review.  Therefore, in October 2018 the Government resolved to undertake research to gather relevant data to enable a detailed assessment of the likely impacts of a change to the 10% commission on residential home owners and park owners.

 

What changes have been considered?

The scope of the research was limited to the impacts of a reduction in the commission from 10% to any of 7.5%, 5%, 2.5% or zero.  The question of any increase was not considered. The research was designed to assess, in particular, the effect of a reduction in commission upon the residential mobility of residential park home owners and the financial impact upon the park owners.  The research findings have recently been published here and reach no firm conclusions.

In brief the findings/recommendations from the research are:

  • Further work is required to assess the rationale for the commission rather than simply the impact of its reduction or removal.
  • Dissatisfaction with the management of parks outweighed residential park home owners’ concerns regarding the commission. A proposal emerged to consider moving enforcement from local authorities to a national enforcement body.
  • There should be no reduction in the commission without financial support for smaller parks.

There is also some implication in the recommendations that a reduction in commission might be offset by an increase in pitch fee.  However, it is also noted that as most residential park home owners do not intend to move, it is not in their interests to increase the pitch fee for the purpose of reducing sale commission.

 

Is a reduction or abolition of commission on sales likely? 

Whilst the idea that commission upon the sale of park homes could be reduced or abolished is concerning for park owners, there are some reasons to believe that a change is not likely at the moment:

  • Previous reviews by Government in 2006 and again by the independent Communities and Local Government Select Committee in 2012 ultimately decided that the park owners right to commission should remain.
  • A large reduction in the commission would be required to have any significant impact upon the residential mobility of the homeowners. On the other hand, the research acknowledges a potentially significant financial impact upon smaller parks if a large reduction in commission were made. The sale of a park home involves not just the sale of the owner’s home but of the right to station it on the park’s pitch.  If the right to charge for this is removed, it should be compensated in some way.
  • Additionally, some parks (particularly smaller parks) would need financial support if commission were reduced or abolished. As has been noted it is not in most homeowners’ interests to increase the pitch fee, which is the most likely mechanism for providing that financial support. It is presently unclear where the support might come from.

In summary, therefore, this issue has been considered twice before. Residential park home owners generally think that park management issues are more important than the commission and want to keep ongoing charges (such as pitch fees) down. The research acknowledges significant financial implications for parks would have to be addressed. The case for a change has not been made.

 

How can Tozers help?

For further help or support, please contact our specialist Parks team who will be happy to provide bespoke advice and guidance.

Contact our legal experts 


eNewsletter sign up

Company & Industry

Related Insights

Insights

Another one bites the dust: aparthotels and their claim to Business Property Relief

Posted on 01st August 2022 in Parks, Later Life Planning, Company & Commercial

Business-owners will no doubt be well aware of the potentially valuable relief from Inheritance Tax known as Business Property Relief. Where successfully claimed, BPR can shield the full value of a business from the charge to Inheritance Tax.

Posted by

Rachael Morley

Partner & Solicitor
Insights

Retail prices index: what park operators need to know

Posted on 07th July 2022 in Parks

On residential parks in England, there is a presumption that homeowners’ pitch fees will adjust by the change in the Retail Prices Index (RPI) between review dates. In Wales, the adjustment is by reference to the Consumer Price Index (CPI). Many holiday parks in both countries include RPI as one factor in their reviews.

Posted by

Paul Kelly

Partner and Solicitor