Real Property and Manufactured Housing

I have been involved in helping to plan a conference for regional housing and planning officials in North Carolina. The conference aims to introduce about 100 government and nonprofit professionals into how to revitalize the manufactured housing in the four or five counties within their planning area.

Although there are a lot of places where we could have begun, what everyone wanted to know was how to navigate through the process of getting mobile homes transformed into real property. This is a thorny issue, because by their very nature “mobile” homes are not affixed to the land and thus they are not real property.

That said, mobile homes usually don’t move around that much. In practice, a mobile home is rarely moved. Residents who own their mobile homes but rent lots in parks are among the least transitory of any renters. In fact, it can be difficult to move a mobile home. In one of the counties where these planners came from (Robeson County, North Carolina), it is not legal to move pre Hud Code homes into the County.

In North Carolina, mobile homes sold by a dealer are given a Certificate of Title by the Department of Motor Vehicle. When a mobile home is sold, that Certificate of Title is transferred to the new owner.

Of course, it can be more complicated. If the home is placed on a lot directly by the manufacturer, then no Certificate of Title is issued. Instead, the home gets a Certificate of Origin. The owner can then apply for a Certificate of Title. The Certificate of Title guarantees that the home will be treated as personal property. In general, that would not seem positive. At the same time, the Certificate of Title should make it smoother if the owner wants to sell his home.

Alternatively, the owner can seek to get the mobile home classified as real property. If the home already has a Certificate of Title, the owner can seek to get that form canceled. The owner must cancel the Certificate of Title if he or she owns the land under which the home will sit where the owner of the home is going to place the mobile home.

In order to be financed as real property, lenders often insist that the mobile home be placed on a real foundation. The wheels and hitch must be removed. In some cases, lenders want the owner of the home to be one and the same as the owner of the land.

Another confusing issue is the right of a person to act as a broker of a mobile home. When a home is classified as personal property, an independent sales person is registered as a dealer and licensed as a motor vehicle dealer by the Department of Motor Vehicle. When the mobile home is real property, a real estate license is required.

Alternatives

Other states have come up with some wrinkles.

In Arizona, a bill before the Legislature would change things. In legislation under consideration in this session, a home in a mobile home park can potentially acquire the status of real property. Granted, there are a few steps. First, the home must be relinquished of its wheels and hitches and effectively attached to the land. The resident does not have to own the land. Rather, the owner of the home must have a lease on the lot in the park for at least 20 years.

An obstacle

One problem to converting any manufactured home to real property is that furniture and other additional elements can not be included in a real property mortgage.