Editor’s Note: Our friend Clay Harrison provided us this “A Guide to Selling a Manufactured Home” in 2004. We have lost track of Clay, but thank him for his contribution. We feel much of this “Guide” still applies today, 11 years later.
The following Sellers Guide is offered for your convienience. Information contained herein is intended to make the selling of a mobile/manufactured home less stressful.
The foregoing is not intended as legal advice
This guide, intended to facilitate the sale of a home in a land lease community, has been developed by Clay Harrison, founder of the Manufactured Home Owners Consulting Services
Clay Harrison Resides in the Hillsdale Community, Sacramento County, and is the past GSMOL Reg 11 Mgr.
The sale of a home in a land lease community is a private transaction, between the buyer and seller. It is a transaction in which no outside element has the right to intervene, influence, make a determination, or otherwise engage themselves. The normal course of buyer and seller interaction, is protected by law, just as in any other act of commerce.
The management of land lease communities have no authority to inspect your home and space, and impose certain conditions, before you will be allowed to sell your home in place. That authority is vested entirely in the hands of the State Department of Housing and Community Development or other appropiate authority. You should not allow yourself to be intimidated.
Management’s use of a check list as a means of determining the condition of your home or space, and imposing conditions to be met before sale, constitutes interference. Such a practice gives management undue influence in a private transaction in which they should not be involved.
The sale of a home in a land lease community, is no different, in terms of involvement, than the sale of a home elsewhere.
Management MAY (it is not required), approve a prospective resident of the community. PLEASE NOTE: THE DETERMINIG FACTORS ARE STRICTLY LIMITED TO TWO AREAS ONLY. Those are: the ability to pay the rent (as of the moment, past credit history is not a consideration), and management’s ability to determine, based on prior tenancies, if the purchaser will obey the rules of the park. This burden falls entirely upon management. Not the buyer or the seller.
FOLLOWING ARE SUGGESTED STEPS TO BE TAKEN BY THE SELLER OF A HOME THAT IS TO REMAIN IN THE COMMUNITY
Keep in mind that from this moment on, all communication with management should be in writing. If any problems develop, your remedies will be greatly diminished by relying on, he said, she said.
1. Read and understand, section 798.74 of the Mobilehome Residency Law (MRL) paying particular attention to sub-section (a).
2. Deliver to management, in person, a signed notice to the effect that your home is about to be marketed, you are hereby requesting a copy of the new resident application, a statement of the rent to be charged to your buyer, and if you should complete a transaction of sale, this document constitutes due notice in accordance with MRL 798.59.
If management has a policy of inspecting homes on resale, you should also include a request for a written summary of any repairs or improvements that will be required. Pay close attention to MRL 798.73.5
3. Do not, repeat, DO NOT provide management with any information concerning the sale. Price, terms, method of marketing, or any other information.
4. Do not, under any circumstances, direct a buyer to management. Handle all of the details yourself. There will be time enough for the buyer to meet with management, after, but only after the sale has been fully consummated.
5. Arm yourself with a PURCHASE AGREEMENT and Deposit of Sale. (from a stationary store, or write one yourself) Be sure and get a deposit. If the buyer won’t provide a deposit, he/she is not a committed buyer. Be sure and include a clause in the purchase agreement that the sale is subject to the buyer being accepted as a resident.
6. Gear all of your advertising so as to be shown by appointment only, do not name the park in the ad. Most parks have a sign at or near the entrance that warns the public to not commit to buying a home until they have checked with management. DO NOT BE MISLED BY THIS. And do not let your prospects be misled. Have your customers come directly to your home. These signs have the effect of causing a house hunter to visit the office, to inquire as to what is for sale in the park. Be aware that management in some parks, are themselves engaging in the re-sales of homes. Management has been known to steer buyers to certain units only, and or, discourage a prospect on the basis of nefarious reasons. A buyer once reported to us that the park owner said: “we don’t want your kind living here.”
7. In order to protect yourself and the buyer, execute and have the buyer sign, in triplicate, the simple form that requires management to notify you and the buyer of acceptance in the park. (see 798.74)
8. RESIDENT APPLICATION: Complete this form for the buyer, being very careful of the questions being asked. Some forms ask for bank account and credit card numbers, previous mortgage payments and mortgage company, a net worth statement, as well as other confidential information, that are of no concern to the park. Simply mark these: “non applicable” or NA.
9. Read, and understand MRL 798.39 and explain to the buyer that management can levy a security deposit, in an amount not to exceed two months rent, and that it is refundable following a 12 month period during which the rent is paid in full, when due. The deposit can be in addition to the first month’s rent, and can only be charged on or before initial occupancy. Which means; management cannot collect it as an afterthought.
10. You are now ready to escort your buyer to the office. Do not, REPEAT, DO NOT, send your buyer to the office unescorted. Chances are the buyer is just as naive as we all were when we first moved into a park, and will be subject to intimidation by management.
11. Either in step two or seven above, you and the buyer should have received copies of the rental agreement, the park’s rules and regulations, and the MRL. Please note that in accordance with 798.15 of the MRL, these documents combined, constitute the rental agreement. The buyer should read the rental agreement very carefully. If he or she cannot understand it, they should have it explained by a competent person, preferably an attorney.
12. Please note: MRL 798.74 (b), allows for a fee to be charged to obtain a credit report. If management charges such a fee, that fee must be credited to the first month’s rent AND, the burden of obtaining a credit report falls entirely upon management.
SPECIAL NOTE: It is assumed that you have assessed the sale value-not your emotional value-of your home. You have, to the best of your ability, learned what comparable homes, in your park, have recently sold for. And how much, if any, the rent was increased for the new resident. If the rent will be increased on your space-you received this information employing steps two and seven-you have what is known as vacancy de-control. Vacancy de-control has the effect of causing depreciation of value. For every $10. increase in space rent, the home depreciates $1,000.
That about sums it up. Questions or additional explanation may be directed to Clay Harrison 916 348 7262, firstname.lastname@example.org
Good luck and we wish you the best in your new location.