I am beginning to finance the sale of homes in my park. I have been using an addendum to my finance contract stating that the home must remain at its current location until the outstanding balance is paid in full, I would imagine most everyone does the same. Has anyone had any trouble legally enforcing this provision? Is there any language to avoid? Any language to be sure to include?
I think you’re going to have to consult an attorney in whatever state your park is located (you didn’t say where). However, I think since you are the lender, the clause strikes me as a reasonable attempt to keep track of a home you have a security interest in. At a minimum, the clause is going to dampen the resale value (as marketed by its current seller). And the clause will put potential purchasers on notice of the requirement, so arguably they can’t invoke the doctrine of being good faith purchasers for value. (I can’t imagine a buyer who would buy without having seen the security agreement that exists on the home).
Some might say it is a restraint on real property alienation, which is generally disfavored. However, even if a court might not enforce it, someone has to hire a lawyer before it is tested, and there is usually alot of time to negotiate before things take this turn.
But I could see why the lender would want to have a veto in terms of where the home gets relocated—especially if there are plans to move it out of state, or into a substandard park where it might be vandalized, etc.