by guest blogger Jesi Wolnik, Esq.

At REALTOR® Caucus 2016, the issue of selling manufactured and mobile homes in mobile home parks was addressed and placed on the Arizona REALTORS® 2017 legislative agenda. As a direct result, Arizona House Bill 2072 went into effect on August 9, 2017. This law allows real estate agents to sell mobile and manufactured homes not affixed to land in manufactured housing communities in Arizona.

Homes in mobile home parks are not affixed, but are typically physically attached. The Department of Motor Vehicles (DMV) provides certificates of title which convey these homes as personal property, as ownership does not pass with ownership of the land. The new law applies specifically to homes located in mobile home parks, which is defined at A.R.S. § 33-1409 as “a parcel of land with four or more rental spaces.”

Note: The ability to sell mobile or manufactured homes on leased land does not extend to RV’s, including “park models”, which look like small manufactured homes. For a better understanding of what mobile or manufactured homes are, read Selling Mobile/Manufactured Homes not Legally Affixed.

The new Mobile and Manufactured Home Purchase Agreement and Sales Contract (MMH Contract) and accompanying forms are available on the Arizona REALTORS® website as fillable forms. The MMH Contract has language similar to the Residential Resale Real Estate Purchase Contract, but there are differences.

The Manufactured Housing Communities of Arizona will be offering training classes on how to use the new MMH Contract. Until real estate agents are able to attend one of those classes, here are some highlights:

  1. Contingencies
    • A buyer must obtain approval to live within the community/association either prior to entering into the MMH Contract, or within five (5) days of MMH Contract acceptance. If after a diligent and good faith effort, buyer is unable to obtain approval for residency from the community, the MMH Contract shall be deemed cancelled and Earnest Money shall be released to the buyer. Typically, a buyer can receive approval within a very short span of time.
    • Also, many communities have a first right of refusal to purchase the dwelling before the seller can offer it for sale privately. The seller should check with the housing community before listing the property with a brokerage.
  2. Earnest Money is Required for New Manufactured Homes
    • An Earnest Money deposit is required if the mobile or manufactured home is new construction, and in that instance, an escrow account must be used.
  3. Close of Escrow Means Passing Ownership of Title, Not Recordation
    • Close of Escrow shall occur when title to the mobile or manufactured home is transferred to the buyer. This occurs when the DMV accepts the title from the seller, and issues a new title to the buyer.
  4. Addendums May be Required
    • Disclosures may be required depending upon whether the mobile or manufactured home is new or used. Additionally, state law requires disclosure of financing options for buyers, if the buyer needs to obtain financing. The option to incorporate these addendums appears in the MMH Contract.
    • Note: If a real estate agent intends to sell mobile or manufactured homes, he/she should be aware that there are different laws pertaining to mobile and manufactured homes in Arizona.

  5. Buyers May Waive the Inspection Period
    • The Due Diligence Period, or inspection period, can be waived by the buyer on resale homes. However, this does not relieve the seller from disclosing known material facts which materially affect value and which are not readily observable or known to the buyer. If the buyer wishes to conduct an inspection, a separate addendum is used.
  6. Final Walk Through May be Required
    • State law requires the buyer conduct a final walkthrough if the manufactured home is new.
  7. New Manufactured Home Sales Require Real Estate Agents to Use a Licensed Dealer Through Manufactured Housing Division of Arizona Department of Housing
    • The MMH Contract is eleven pages long. A three-page addendum is required if the manufactured home is new. A real estate agent must use the licensed dealer who is offering the new manufactured home for sale in this type of transaction. This requirement is to guarantee that paperwork required by state law is completed by the licensed dealer.

    In summation, the MMH Contract will seem familiar in many ways, but it has vast differences that a real estate agent should become familiar with. As always, the Arizona REALTORS® Legal Hotline is available to brokers or designated REALTORS® for questions regarding this new form.

    Jesi L. Wolnik, Esq. is an associate at Manning & Kass, Ellrod, Ramirez, Trester LLP. This article is of a general nature and reflects only the opinion of the author(s) at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

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