Mobile homes are a popular residential option in many states. They can be easily moved from place to place, and are typically less expensive than buying a standard brick-and-mortar home. Legally, purchasing a mobile home is similar to purchasing a manufactured (or “pre-fab”) house.
But it's different, in many ways, from buying a standard home. In particular, a mobile home does not come with land. Instead, if you plan to stay in one place for an extended time, you must lease your place in a mobile home community.
State law generally governs the sale of mobile homes, and is an important tool for protecting consumers. Both buyers and sellers should familiarize themselves with their state's laws to ensure that they get the full benefit of the bargain.
Buying a Mobile Home From a Dealer
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, by someone who makes a living from selling these homes, perhaps representing the manufacturer, much like a car dealer does.
While the applicable laws vary from state to state, it is common to find the following sorts of legal requirements:
- The dealer must be licensed by and within the state where selling mobile homes. You should be able to verify a dealer’s license through the state’s consumer protection agency.
- The sales contract must cover important 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 sales contract should specify that the buyer accepts the home with all implied warranties, such as the warranty of habitability and warranty of merchantability. These warranties protect consumers from faulty goods.
- The dealer must establish an escrow account in which 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- A sales contract will be considered rescinded, or cancelled, if a buyer conditions the sale on his or her ability to get financing, the seller knows that the buyer intends to obtain financing from a third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.
- A warranty comes with new mobile homes, which typically runs 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.
The seller typically handles 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.
Buying a Mobile Home From Its Owner
The current owner of a mobile home can, of course, sell it just like any other home or piece of property. If you're buying a used mobile 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.
If you’re not financing the purchase, but rather paying cash or trading other property for it, then you need to take extra steps to take care of various legal and other matters, like:
- Making sure there are no outstanding liens on the home. You can investigate these by searching for the title in the county tax records or the state motor vehicle agency, and if a lien exists, have the seller pay it before closing the sale.
- Paying 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.
- Making certain the home is registered in your name with the state and local property tax authorities.
- Making sure the mobile home can stay on the land where it’s located, such as in a mobile home park or private property, or that you can move the home to another location without breaking a lease signed by the seller.
- Paying all utilities, like water, gas, and electric service up to the date of the sale, and arranging for accounts in your name once the sale is completed.
- Checking 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 the U.S. Department of Housing and Urban Development (HUD), most states have developed programs that check on the practices of mobile home manufacturers and respond to consumer complaints.
If you have any complaints about the performance of your mobile or manufactured home and neither the seller-dealer nor the manufacturer have resolved them satisfactorily, contact HUD or your state’s consumer agency. You should also be aware of HUD’s helpful Consumer Guide for purchasing mobile homes.
Questions for Your Attorney
- I wasn’t able to get financing for a new mobile home, but I made a down payment. Does the dealer have to give that back to me?
- What does your review of the draft sales contract for my mobile home purchase show?
- I bought a mobile home and, after a few days of driving it, the engine broke down. Can I get a refund?
- If I want to sell my mobile home, can I make the buyer agree to buy it “as is,” or can the buyer, for example, come after me if the home is destroyed by a fire that was caused by an electrical problem that I didn't know about?