Dealers License

I’m in the process of buying a park that has a number of POH’s that I would like to sell asap. The mobile homes are all 70’s/80’s models and in this state, there was no law requiring title to mobile homes till about 10 years ago. So, the owner (who bought the park & the POH’s from someone else) never got title to any of the POH’s. He will transfer the mobiles to me via Bill of Sale and when I go to sell them, that is all I can offer as well. The state has some kind of grandfather provision for these older homes regarding the title. But I’m concerned about having to get a dealers license to sell them off. I am in the process of gathering info on that, but likely the State DMV will be a hassle on the title issue each time I sell 1 of the homes.

What I’m wondering, short of working with an existing dealer, has anyone had any success in getting around the dealer license when selling mobile homes? An idea I had was to give the homes away after renting the home & the lot for a period, but it would likely be quickly dispensed with if it ever became an issue via the concept of “substance over form”, because it really is still just an RTO.

Also, has anyone experienced a similar situation when it was “ok” for decades to transfer the home without title, but now its required?

Thanks in advance.

I like the fact that you are thinking through the worst-case scenarios. While I don’t know which state you’re in, getting a dealer’s license is pretty easy. You don’t have to have one to rent a mobile home, so if you are doing some type of rental and later sale construction, that should give you plenty of time to get the license. I would check with your state MHA and get their input, as every state has different rules. As far as the rent-to-own issues, you definitely want to come up with a plan that is in accordance with the SAFE Act, and is not just a “disguised sale”. Your state MHA may again be a source of ideas on that. The concept of renting a home for its economic life and then giving it away is one that many park owners have debated – nobody knows for sure if that works because there is no case law. What I think is becoming a fact among most park owners is that the old-style mortgage system no longer works – not only due to SAFE – but also the difficulty in successfully obtaining a foreclosure as opposed to a quick eviction as in the case of a rental.

In most states, getting an MH Dealers license involves some education case, an application, a state fee, and the purchase of a license bond (most park owners can get bonded). While this isn’t difficult, it does take a little time and some money. Check with your state’s Secretary of State website for details - if you have a state MH Association, that’s even a better place to start. Sign up as a member with the State Association, too, as they often offer many state specific business forms that are well worth any membership fee.

As far as selling homes without getting licensed, most states now have a central MH title registry. States sometimes allow the sell of one or two homes without a license, but more than that and you need one. Due to the central registry’s, it’s hard to get around not having a license. Furthermore, in most states with license requirements, the sale of a manufactured home by an unlicensed business makes the sale voidable. Civil fees will also apply.

You can, in some states, get around the license issue by selling your homes to a licensed dealer and having them do the transactions for you. You generally don’t need to be a licensed dealer to sell to a licensed dealer. This works well if you only have a few sales to administer. Otherwise, it’s likely more cost effective to get the license yourself.