Here are a few critical questions for purchasing a modular home ; a buyer and buyer ’ s agent , and a lender should ask the same questions :
● Does the manufactured homeowner rent the land parcel space from a third party ? The conversion from a personal property asset into a real property asset would not be economically beneficial to a tenant where another party owns the parcel .
● Does the prospective borrower currently have a fee ownership interest in the land parcel when the purchase transaction is completed ?
● Is the land parcel in a community association of properties subject to rules , such as covenants , conditions , and restrictions ? Does the community have written bylaws ?
● Is the land parcel in an urban , suburban , or semirural location ?
● Is the land parcel zoned correctly for its intended use ?
● Is the land parcel on a paved or dirt road with municipal utilities , including water , sewer , gas , and electricity ? Most urban modular home parks are connected to city sewer , gas , and water .
● Does the property use an underground septic system , usually made of concrete , fiberglass , or plastic ? Wastewater and sewage flow into this reservoir system . These systems work efficiently with water permeating through leech lines into the ground with an anaerobic digestion process for organic materials . Periodic cleanout maintenance is required , usually from a thirdparty maintenance vendor .
● Are electricity and natural gas available from a public community facilities district ? What about a propane tank for gas supplied to the property ?
● What is the description of the manufactured home , including size , age , amenities , and is the home installed on a permanent cement foundation ? Were the slab and installation engineered and permitted by the local municipal building department ?
● What is the structure ’ s overall condition , including the exterior , interior , and substructure ?
● Are there reasonable cost estimates to bring the manufactured home and outbuildings up to current building standards with current building supplies and improvements ?
Legally manufactured homes are built as dwelling units of at least 320 sq . ft . in size , or more , with a permanent understructure steel chassis to assure both initial and continued transportability . Crews construct the manufactured homes in a warehouse . The homes contain wheeled chassis and are towed to the location by commercial trucks to be placed upon a fixed predesignated foundation .
The question arises whether the manufactured home is personal or real property . The Federal Department of Housing and Urban Development ( HUD ) will issue a certification label posted on
the manufactured home regardless of whether it is characterized as personal or real property . When the manufactured home is completed and delivered to the ultimate owner and user , the California Department of Housing and Community Development ( HCD ) will issue a license and certification evidencing the ownership of the home that it will be taxed as personal not real property .
Suppose a manufactured home is delivered to a mobile home park and installed on a rented space on a property owned by a third party . In that case , the manufactured home will remain personal property subject to the licensing and certification by HCD .
If the land parcel is owned with fee simple title and a manufactured home is installed on blocks with temporary piers ( not on a permanent foundation ), it will remain personal property . Modifying personal property to a real property status requires a permanent foundation . When manufactured homes are installed on permanent foundations , they will be considered nonmovable and become real property , subject to an administrative approval process . At that point forward , the owner will have real property taxes due annually .
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