By Scott Drucker, Arizona REALTORS® General Counsel

A license issued by the Arizona Department of Housing (ADOH) is generally required to act as a broker in the sale of mobile and manufactured homes. Pursuant to A.R.S. § 41-4047(3-4), it is unlawful to “engage in the business of a salesperson of manufactured homes, mobile homes or factory-built buildings…” or engage in the business of contracting to sell any new or used manufactured home, mobile home, factory-built building or subassembly (collectively referred to as “manufactured/mobile home”) without a license issued by the ADOH.

There is an increasing number of exemptions from the ADOH licensing requirements that permit real estate licensees to represent a party in the sale of a manufactured/mobile home.

Prior to 2017, an Arizona real estate licensee’s ability to sell manufactured/mobile homes as part of their real estate practice was governed by A.R.S. § 41-2178(B)(1). Pursuant to that statute, real estate brokers and salespersons were permitted to act in the sale of used mobile and manufactured homes only when the home was affixed to the real property and listed in a contract for transfer of an interest in real property executed by its owner.

Q: What are the statutory requirements of the original ADOH licensing exemption?
A:
The requirements are the manufactured/mobile home:

  • Must be “used”
  • Must be “installed” on the property
  • Must be “listed” in a contract for transfer of an interest in real property executed by its owner.

Q: When is a manufactured/mobile home considered “used?”
A:
A.R.S. § 41-4001(37) defines “used unit” to mean “any unit that is regulated by this chapter and that has been sold, bargained, exchanged or given away from a purchaser who first acquired the unit that was titled in the name of such purchaser.”

Q: When is a manufactured/mobile home “installed” on the property?
A:
Pursuant to A.R.S.§ 41-4001(18), a manufactured/mobile home is installed on the property when it is:

  • Connected to on-site utility terminals
  • Placed on a foundation system
  • Secured by anchoring.
  • “Installation” does not require the filing of an affidavit of affixture for purposes of this exemption.

Q:When is a manufactured/mobile home “listed” in a contract for transfer of an interest in real property executed by its owner?
A:
This occurs when both the manufactured/mobile home and the real property interest are transferred in the same purchase contract. To transfer both the manufactured/mobile home and an interest in the real property in the same purchase contract, the seller must either own the real property or have the right to directly assign the lease for real property.

In 2017, the law was expanded pursuant to H.B. 2072, which amended A.R.S. § 41-4028. In addition to what was previously allowed, real estate licensees are permitted to act in the sale of mobile and manufactured homes under two new circumstances:

  1. Real estate brokers and salespersons can act on behalf of a Department of Housing licensed dealer in the sale of new or used mobile and manufactured homes located in mobile home parks, provided that the licensed dealer submits the required fees and paperwork. See A.R.S. § 41-4028(B)(1)(b); and
  2. Real estate brokers and salespersons can act in the sale of used mobile and manufactured homes located in mobile home parks, provided that the broker or salesperson is acting on behalf of a private party and is compliant with Arizona Department of Real Estate licensing requirements. See A.R.S. § 41-4028(B)(1)(c).

Q: How is a mobile home park defined?
A:
A.R.S. 33-1409 defines mobile home park as “any parcel of land that contains four or more mobile home spaces.”

Q: How can you determine whether a manufactured housing dealer is licensed?
A:
You can determine if a manufactured housing dealer is licensed by going to the ADOH Manufactured Housing Division’s home page and performing an online licensing search or by contacting the ADOH.

Q: What paperwork must the manufactured housing dealer file?
A:
A.R.S. § 41-4040 provides the following:
Every dealer who acquires or sells a previously titled manufactured home or mobile home, as defined in section 42-19151, shall submit a written report of all such acquisitions and sales to the department of revenue and to the county assessor of the county where such dealer is located. Such report shall be submitted by the fifteenth day of each month for the period of the previous calendar month and shall include:

  1. The manufacturer, brand name or model, size, factory list price, total selling price and serial number of such manufactured home or mobile home
  2. The name and address of the person from whom such manufactured home or mobile home was acquired and the last previous location of such manufactured home or mobile home
  3. The name and address of the person to whom such manufactured home or mobile home was sold
  4. The new location of such manufactured home or mobile home if such location is known to the dealer.

In 2018, via H.B. 2150, the law was again expanded. Effective August 3, 2018, real estate licensees will be able to act in the sale of a manufactured/mobile home in two additional circumstances:

  1. Real estate brokers and salespersons can act in the sale of new mobile and manufactured homes, outside of mobile home parks, provided that the real estate licensee is acting as an agent for a Department of Housing licensed dealer and the licensed dealer submits the required fees and paperwork. See A.R.S. § 41-4028(B)(1)(d); and
  2. Real estate brokers and salespersons can act in the sale of new or used mobile and manufactured homes, outside mobile home parks, provided that they are affixed to real property and listed in a contract for transfer of an interest in real property executed by its owner. See A.R.S. § 41-4028(B)(1)(a).

Q: How is the 2018 licensing exemption set forth in A.R.S. § 41-4028(B)(1)(a) different than the original?
A:
The only difference is that the most recent exemption also applies to new manufactured/mobile homes. While the original exemption required that the manufactured/mobile home must be “used,” the new exemption applies to both used and new manufactured/mobile homes.

Q: Does any exemption exist that allows real estate licensees without an ADOH license to represent a party in the sale of a used manufactured/mobile home that is not affixed to real property and sits outside of a mobile home park?
A:
No. To sell a used manufactured/mobile home that sits outside of a mobile home park, the manufactured/mobile home must be affixed to real property and listed in a contract for transfer of an interest in real property executed by its owner.

Q: Where can I find forms necessary for the sale of a manufactured/mobile home?
A:
The Manufactured Housing Communities of Arizona drafted a form titled “Mobile and Manufactured Home Purchase Agreement and Sales Contract,” as well as ancillary forms needed to effectuate the sale of a manufactured/mobile home.

In an effort to assist REALTORS® with these types of transactions, The Arizona REALTORS® has made these forms available on its website. Salespersons should consult their brokers.

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