Mobile homes, which are, today, treated as being the same thing as manufactured homes, have been popular for years because, for example, they can be moved from place to place, they're usually less expensive than traditional homes, and they allow persons to live in or near areas or cities where housing is scarce and expensive. So, there's usually a good market for mobile homes.
Perhaps because of such popularity, buying and selling mobile or manufactured homes usually is governed by state law, and particularly sales by dealers, which are designed to protect both sellers and buyers, such as the requirement for certain documents. And, even if no dealer is involved, there are still some legal aspects that you need consider before buying, like transferring title.
So, if you're selling or buying a mobile home, you need to make sure that you comply with the various laws so that the sale and purchase goes smoothly.
Sales by Dealers
Many states have laws that govern the sales of mobile homes, both new and used, when the sales are made by dealers or "brokers," that is, someone who makes a living from selling these homes. While the laws vary from state to state, it is common for the laws to provide that:
- The dealer must be licensed by and within the state where he or she sells mobile homes
- The sales contract must contain things like: (1) a description of the home and the total cash price paid by the buyer; (2) a notice that complaints concerning the purchase must be referred to the dealer and, if the complaint is not resolved, may be referred to the appropriate state agency, and; (3) a notice that the buyer is entitled to a copy of the contract and any warranties that cover the home
- The dealer must establish an escrow account to hold the buyer's purchase money until all conditions of the sales contract have been met and the buyer has taken delivery of the mobile home
- A sales contract will be considered rescinded, or cancelled, if a buyer conditions the sale on his or her ability to get financing, the seller knows that the buyer intends to obtain financing from a third party without the assistance of the seller, and the buyer is unable to obtain financing within 30 days after the contract is signed
- The sales contract must contain the disclosures required by the Truth in Lending Act (TILA), such as the name of any lender who is providing the buyer with financing, the amount financed, finance charges, and annual percentage rate
- There is a warranty for new mobile homes, which typically run for one year (in addition to any warranty provided by the home's manufacturer), and covers things like the electrical, plumbing, and heating and cooling systems
- Sales and use taxes must be paid on the sales of new homes, and if a home is registered in an individual consumer's name and is attached to a foundation (concrete pad), the home is subject to property taxes. If it is not registered to an individual consumer (such as being registered to a dealer or dealership) and is not attached to a foundation, the home will be taxed as personal property
- The home must be registered and licensed with the state motor vehicle agency
For the most part, the seller takes care of such things as charging and collecting sales and use tax, registering the home with the property tax authorities, and recording any lien that a lender (like a mortgage company or bank) has in the mobile home.
Sales without Dealers
The owner of a mobile home can, of course, sell it just like any other home. If you're buying a used home directly from an owner, and if you're going to finance it with a mortgage, for example, the bank or lender usually will take care of some of the things that a seller-dealer would, like making sure that sales taxes are paid and TILA disclosures are made.
If you're not financing the purchase, but rather paying cash or trading other property for it, then you need to make sure of some things, like:
- There's no outstanding liens on the home, which you can discover by searching for the title in the county tax records or the states motor vehicle agency, and if there is, have the seller pay the lien
- Pay sales and use tax, which usually will be assessed and collected when you register the home with the state motor vehicle agency and have title to the mobile home transferred to your name
- Make certain the home is registered in your name with the state and local property tax authorities
- Make sure that the mobile home can stay on the land where it's located, such as in a mobile home park or private property, or if you can move the home to another location without breaking a lease signed by the seller
- Make sure all utilities, like water, gas and electric service are paid up-to-date at the time of the sale and arrange for accounts in your name once the sale is completed
- Check zoning laws and ordinances in your area to be certain that nothing has changed with respect to the site, such as a decrease in the maximum number of homes allowed on the property and changes in sewer and septic requirements
Resolving Issues with the Home Itself
Working in conjunction with U.S. Department of Housing and Urban Development (HUD) most states have programs that check on the practices of mobile home manufacturers and respond to consumer complaints. The programs are run by a State Administrative Agency (SAA). HUD performs these functions in the states without an SAA.
If you have any complaints about the performance of your mobile or manufactured home and neither the seller-dealer or the manufacturer have resolved them, contact your SSA or HUD. SSA and HUD can offer assistance only for mobile homes that were made after June 15, 1976.