I have a tenant that wants to sell her home. I’m trying to get 2 other homes filled and not sure if I have the financial/time capacity to buy the home right now.
Should I tell her to sell it and deal with filling it (she won’t move until it’s sold) or should I try to stretch and buy and fill it myself? I’ve told her that whoever buys it must pass a background check first.
Is your end goal to have a TOH? My advice is have the current owner sell it, especially if you have a full plate already. If you buy it and then try to sell it you’re no further ahead. Like you mentioned before, make sure the new buyer is approved by you beforehand. Then you’ve accomplished the same goal while they handled most of the work. On the other hand, if your goal is buy the home, rehab and sell for a profit then I’d probably buy it. But only if the local market had strong demand for used homes.
that was my train of thought as well with the end goal of tenant-owned homes but I wasn’t sure if I was being short-sighted. All good points.
Best thing that can happen is the tenant sells it to somebody (who you make sure to properly vet) and you basically avoid having to rehab the unit and then sell it.
Just make sure the person she sells it to know they cannot move it. You don’t wanna wake up to that surprise.
How do you legally tell a person who OWNES her home that it cannot be moved if a buyer wants it on their own property out of the MHP?
@carl It may be dependent on state, and I’m not sure if it’s a legitimate practice to begin with. But it does happen regularly and likely changes based on state. I see it very often in the markets that I’m in.
For example, on my quest to buy mobile homes I always find the owner prevents the sale if I want to move it from their park (regardless if it’s to my park or not). Even if the tenant owns their home free and clear.
Conversely I also always see on other operator’s leases or rules that the mobile home cannot be moved at all or for X amount of years. At the very least they have it so they can vet the buyer, or sometimes they even have first right to purchase the home. So it’s always done in favor of the MHP owner.
It would be nice if somebody that knows if this is a legitimate practice could chime in and confirm. One last thing to keep in mind is that mobile homes are considered “personal property” so it falls in a different category than “real property” (like a stick built) would.
yes, many park owners have language requiring homes be kept in the park but not sure how much it will hold up in court.
In Ohio, you can word it anyway you like that a home.must stay in the park, however under Ohio Statue there personal property and can be moved regardless of the lease. Depending on your state letting the seller do the selling can save you money amd time, unless the tanant looks for quick cash and goes to a broker.
Legally, if she sells it you cannot prevent a buyer from moving it. That is what makes it beneficial for the park to buy it, because they can sell, based on the home remaining in the park for a certain time period.
Follow up question to all, the previous owner of the park is interested in buying and renting the home out, shes a little odd but it would mean the home would stay in the community. Should I take her up on it or push for someone not associated? Normally I would want whoever buys it to live in it so this would be a new set up.
Big no. Don’t let other people have a stake in your business. Before you realize she’s gonna try to buy more and more homes slowly. Even more troubling if you say she’s odd, is that now you’ll have to do business with her. Nightmare scenario.
good point, thank you!
It can be done if the correct work was done prior to the sale to the current owner. Our consultancy, before we retired, spent some really big money with really competent law firms in a number of states to address this issue. We had clients we taught how to use this method and it worked even in Michigan where the resistance began when a number of home wholesalers were trying to buy FSBOs and move them out of SUN Communities parks.
This method only worked if implemented prior to sale of the home, or if a related finance company was stilled owed money on the home sufficient to block an unrestricted sale. (The finance method would not work if the seller was able to pay the balance in full.)
Forcing a home to remain in the community can be done legally but it requires knowledge and planning. Most community owners are not going to be able to prevent homes from being moved so they would be better off buying the home themselves for resale. ( When a home moves out, the average cost to the community owner is running around 20K because of all the new HUD setup rules and regulations.)
how much for the home? how quick can you get your money back?
I ended up just making a stretch and purchasing the home to get the previous owner out of my hair. I learned during the first week of ownership how truly deceitful she was to multiple people and didn’t want to deal with it. I’ll be able to make a profit on the home once I find a viable candidate, just wasn’t expecting to shell out more money a week after purchasing the park. 
If she sells it outright, what legal right does a park owner have to prevent it from moving unless there is a lease in place???
You generally cannot. Even if you set it up long beforehand there is a general disfavor or this type of restriction in the common law and statutes. It just isn’t good for anyone but the landlord, so as a one sided policy it is frowned upon.
And even if you could draft a good agreement, it doesn’t really protect you against future buyers who have no notice of any restrictions. That is part of the system of titles and real property ownership in our system of law: third parties who buy land or mobile homes and see no restrictions on the title are not bound by secret, unpublished agreements that they never agreed to follow. The landlord would have a cause of action against the customer who sold the home against these agreements, but I would be shocked if a court of law forced a private agreement between a landlord and a current customer against unknowing future buyers.
The better model is to make your community desirable to remain in so that homes are valuable and worth less upon a move.
True, I think I’ve got two routes for this and future homes.
the purchase price of the house is high so the pay off time is long, and they sign a memorandum of understanding that the home cannot be moved until it is paid off in full.
the purchase price of the home is low, so they may pay it off in a year, but have a longer term lot lease.
But ultimately you’re right, the most compelling and effective tool to keep a home and tenant in the community is to make it a place they want to be.
I guess I was responding to the comments where posts were talking about keeping the home in your park permanently. Yes, your system is a good one, but that ends when they pay off the home etc.
You don’t need a separate memo on restricting the movement of the home until they own it. That can just be a paragraph in your sales agreement.
Todd