What is the 10% Commission Rule?

If you are buying or selling a residential park home in the UK, you will inevitably come across the 10% commission rule. Under the Mobile Homes Act 1983 (and updated in 2013), when a park home is sold on the open market, the owner of the park (the site owner) is legally entitled to receive a commission of up to 10% of the total sale price.

This is often a shock to new buyers and sellers, but it is a standard legal requirement across almost all residential parks in the country.

Who actually pays the 10%?

This is where the most confusion lies. It is the buyer’s responsibility to pay the commission to the park owner, but the money effectively comes out of the seller's pocket.

Here is how the maths works in practice:

  • You agree to buy a park home for £100,000.
  • As the buyer, you pay 90% (£90,000) directly to the seller.
  • You retain the remaining 10% (£10,000) and pay this directly to the site owner.

The seller receives £90,000 in total. The buyer spends exactly £100,000 in total.

Why does this rule exist?

Park homes are unique because while you own the physical home, you do not own the land it sits on. You pay a monthly pitch fee to rent the land. The 10% commission was introduced as a way for park owners to generate income to maintain and upgrade the park’s infrastructure (like roads, communal lighting, and landscaping) without having to drastically increase the monthly pitch fees for all residents.

Can the 10% be negotiated?

The law states that the site owner is entitled to a maximum of 10%. While the vast majority of park owners will charge the full 10%, it is technically a maximum limit, not a fixed rate. In very rare circumstances, some site owners may agree to a lower percentage, but you should always budget with the assumption that the full 10% will be charged.

What is the current legal standing?

The 10% commission has been heavily debated in Parliament over the years, with many residents campaigning for it to be reduced or abolished. However, following a government review in 2022, the decision was made to keep the maximum commission at 10%. The government concluded that reducing it would likely force park owners to significantly increase monthly pitch fees to cover their losses, which could negatively impact residents on fixed incomes.

Key takeaways for Buyers and Sellers

  • Sellers: Always calculate your finances based on receiving 90% of your asking price.
  • Buyers: Ensure your solicitor or legal representative understands park home law so the 10% is correctly withheld and transferred to the site owner within the legal timeframe (usually 7 days after completion).