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Message # 929 Mobile homes (Pt. 2)

When considering the purchase of a manufactured home, buyers should also be mindful of the amount of tax they will have to pay on a manufactured home, because taxes contribute to the overall cost of the home. The method and rate by which manufactured homes are taxed will vary, based upon how the home is installed (whether on piers or foundation systems), its age, and whether it is new or used.

First, local property tax.

If a manufactured home was sold new since July 1, 1980, it is subject to local property tax. County assessors will determine the current market value of the home, and assess a local property tax, as if it were a conventional home. These taxes may be paid in two payments. Homes subject to local property taxation are not subject to California sales or use tax. A manufactured home of any age will be assessed local property tax if it has been installed on a legal accepted foundation system, or if it was voluntarily converted to local property taxation.

Second, in-lieu tax.

If a manufactured home was sold before July 1, 1980, then it is subject to an in-lieu tax.

This tax is based upon the value of the home and gradually decreases as the home grows older.

A manufactured home built before July 1, 1980, will be assessed sales tax (from 6 percent to 7 percent depending upon the county where the home will be located) each time it is sold. This tax is in addition to the annual in-lieu tax.

If a buyer purchases a home through a dealer, the dealer is responsible for collecting and forwarding the taxes to the appropriate state authority. In private sales, the total sales tax and in-lieu tax is collected by the State Department of Housing and Community Development, which will in turn forward it to the appropriate agency.

Before October 1, 1984, any homes that were first sold new before July 1, 1980, (and whose owners failed to pay the annual license fee and allowed the registration to become 120 days delinquent) are subject to local property taxation by default. Legislation effective October 1, 1984, repealed this default provision, and instead created a lien in favor of the state of California and imposed a fine. A title search may be requested from the State Department of Housing and Community Development to determine whether or not this kind of lien exists.

Third, accessory taxation.

Accessories that are sold with a new manufactured home (such as skirting, steps, storage sheds, etc.) Are subject to sales or use tax as personal property.

When a used home is sold in place, the total sales or use tax liability is calculated based upon the retail value, as listed in the National Automobile Dealer Association's Mobile Home Manufactured Housing Appraisal Guide, the Kelly Blue Book Manufactured Housing And Mobile Home Guide, or the actual sales price, whichever is less.

Next, ownership documents.

When selling a manufactured home, a dealer must apply for registration and title documents from the state, the dealer is also responsible for submitting all required fees to the state.

If the home is purchased from a private party, the seller must give the buyer a properly endorsed titling document and the last issued registration card. The buyer must then send the titling document and registration card, along with the fees, to the State Department of Housing and Community Development to complete the transfer of ownership.

Next, installation.

According to state law, installation of a mobile home or manufactured home that is more than 8.5 feet wide or 40 feet long requires an installation permit. The home must be installed according to the manufacturer's instructions and state laws, and must be inspected by the state or local enforcement agency before it may be occupied. The owner of the home should receive a copy of the Inspection Report or a copy of the Statement Of Installation Acceptance (also called a Certificate Of Occupancy).

Many times the contract will call for the dealer to deliver and install a manufactured home. If this is the case, the dealer or the dealer's contractor must take out the necessary permits. To protect themselves, buyers should require the license numbers of all contractors involved in the installation of the home and accessories.

In order to save money, some owners install their manufactured home themselves; they should remember, though, that they will have to take out their own permits and will assume all responsibility for the installation, including possible loss of new home warranty protection due to substantial defects caused by an improper installation.

Next, placing a manufactured home.

One of the main considerations when buying a manufactured home is where to locate it, either in a park or on a privately- owned lot. A buyer should never purchase a manufactured home until after securing space for it. The decision should be made carefully, because once a home has been installed it will likely never be moved; 95 percent of all manufactured homes are never relocated.

What about locating in a manufactured home or mobile home park?

Most mobile home parks offer a wide variety of conveniences and facilities, such as recreation centers, playgrounds, pools, storage areas, landscaping, grounds maintenance, and on-site laundromats.

But there may be some trade-offs when living in a mobile home park; people renting space in a park enjoy many privileges, but they also have to assume certain obligations. While they are in one sense homeowners, they are also tenants, and must therefore observe the rules established by the park. State law requires that mobile home park tenants sign a rental agreement agreeing to the rental conditions before moving in, and in case of a manufactured home sale through a dealer, the escrow should not be closed until the rental agreement is signed.

Rental agreements and fees

Before moving into a mobile home park, a prospective tenant must sign a rental agreement with the park owner. This agreement contains the terms of the tenancy, the amount of the rent, a list of the park's rules, and a description of the physical improvements and services that will be provided. The park owner must also furnish the tenant with a copy of the State Mobile Home Residency Law.

Park owners may only charge rent, utilities, and reasonable incidental charges for services actually provided. Tenants may not be charged for services provided but not listed in the rental agreement, unless the tenants have been given at least a 60-day written notice of the charge.

If a tenant requests, the park management must offer a written rental agreement for at least a 12-month period. The rent, utilities, or incidental reasonable service charges for the term of the rental agreement must be the same as for the month-to-month tenants. The park owners must give at least a 60-day written notice before raising the rent.

The park owners may not charge tenants a per-person fee for members of the tenant's immediate family; or a fee for enforcing the park rules; or a fee for guests who stay fewer than 30 days; or a fee for pets, unless the park provides special pet facilities or services; or a fee for entry, installation, utility hook-up, and landscaping when moving into the park. If a tenant fails to pay the rent, utility charges, or any reasonable service charges, the park owner may issue a termination notice, under specific conditions of the Mobile Home Residency Law.

Park rules.

Park owners are allowed to establish reasonable rules to maintain the atmosphere and serenity of the park. A set of rules will typically specify at what time loud music must be turned off, if the park allows pets, and if homes must have skirting or awnings. There may also be rules governing the length of time which guests may stay, playground and swimming pool rules, and so on. The park owner may amend the rules about recreational facilities without the tenants' consent, by providing all the tenants with a 60-day written notice.

Should the tenant, a member of the tenant's family, or one of the tenant's guests break a rule, the park owner may give the tenant written warning. The tenant has seven days to adhere to the rule; if the tenant continues ignoring the rule, the park owner may issue a termination of tenancy notice.

Privacy

Tenants should also remember that they have a right to privacy in their home, even if it is located in a park. A park owner or manager may only enter a home or lot to maintain the utilities or protect the park - and then only at times and in a manner which does not disturb the tenant's privacy. Except in case of emergency or abandonment, the park owner or manager has no right to enter a home unless the homeowner has given prior consent, which may be revoked in writing at any time.

When selling a manufactured home

When a tenant decides to sell a home, the park management cannot require the home to be moved unless it does not comply with state minimum health and safety standards, is in a significant state of disrepair, or is less than 10 feet wide. The park owner has the right to approve of the person buying the home if the home is staying in the park. The management may only disapprove of a buyer or prospective tenant who has in the past failed to pay rent or to follow the provisions of the rental agreement.

Utilities

In some mobile home parks, the utility company provides individual meters for all tenants and bills them directly. In other parks, the park uses a "master meter" utility system. In this system, the mobile home park sub-meters to each lot; the park gives every tenant a utility bill with the beginning and ending meter reading. If a park is using this system, it must conspicuously post the current residential utility rate schedule, which is published by the utility company; the rate the park charges cannot differ from that of the utility company.

Discrimination

Mobile home park owners may not discriminate against tenants on the basis of race, sex, religion, color, national origin, marital or familial status, or sexual orientation. Parks may no longer maintain an "adults only" policy, although federal law allows for the existence of "seniors only" parks.

Next, locating on a private lot

The alternative to locating the manufactured home in a park, is locating a home on a private lot. By state law, cities and counties cannot prohibit manufactured homes on permanent foundations from being located on any lot which is zoned for conventional single-family residential homes. Local governments may only impose architectural requirements on the manufactured home itself which are limited to roof overhang, roofing material, and siding material, so long as the requirements, or any other lot development standards imposed on the manufactured home installation, do not exceed those required for a conventional home on the same lot.

When considering locating a manufactured home on a private lot, a homeowner should contact the local planning or building department. A prospective homeowner should never purchase a lot that is not specifically approved to allow manufactured housing by all controlling divisions of the city or county authorities.

There may also be specific local laws concerning utilities, including water and sewer hook-ups. These hook-ups can be expensive, especially if owners have to drill their own wells or put in septic systems. To avoid these expenses, owners should find out if the site has an established water and sewer facility. Also, the state does not require manufactured homes to be installed on foundation systems, although local governments may impose this restriction on their own. It is a good idea, therefore, to become acquainted with all government requirements at local, state, and federal levels before purchasing a lot for a manufactured home.

Next, consumer services provided by the State Department of Housing and Community Development.

Few people realize just how much protection state law provides for purchasers of manufactured homes and their occupants. Today, people who purchase manufactured homes enjoy more protection by the state than purchasers of conventional homes.

Codes and standards.

The following programs are operated by the State Department of Housing and Community Development 's Division of Codes and Standards:

The Occupational Licensing Program licenses manufactured home and mobile home dealers, salespeople, and manufacturers; investigates all licensees upon receipt of information indicating violation of laws governing the sale of manufactured homes and mobile homes; and takes licensing or other appropriate disciplinary actions against licensees who have violated rules or regulations governing the sale of manufactured homes. Call area code 916, 323-9801.

The Manufactured Housing Program inspects manufactured housing and mobile homes upon request or as required by law when altering plumbing, mechanical, electrical, structural, or fire safety equipment or installations within manufactured homes; and oversees a federal manufactured recall program designed to prevent, and in some cases correct, the introduction of repetitive construction defects in new manufactured homes. Call the Santa Ana office at area code 714, 558-4161; or the Sacramento office at area code 916, 445-0135.

The Mobile Home Parks Program oversees a statewide program of health and safety enforcement within mobile home parks; issues annual operating permits and directly conducts inspections in approximately 60 percent of the nearly 6,000 mobile home parks statewide; and responds to complaints involving health and safety issues within mobile home parks. Call the Santa Ana office at area code 714, 558-4161; or the Sacramento office at area code 916, 445-0135.

The Registration and Titling Program processes applications and issues ownership documents for manufactured homes and mobile homes; and provides detailed information to the public about laws governing ownership documents, taxation of manufactured homes, and histories of prior ownership.

The State Department of Housing and Community Development also provides the services of the office of the Mobile Home Ombudsman, which helps resolve problems and provides information relative to a wide variety of manufactured housing and mobile home matters including: registration and titling, installations, warranties, sales, inspections, mobile home parks, accessories, improvements, and financing. You may obtain a copy of the Mobile Home Residency Law by calling toll-free from 8:00 a.m. to 5:00 p.m.: 1-800-952-5275; or writing to the Office Of The Mobile Home Ombudsman, Post Office Box 31, Sacramento, CA , 95812-0031.

If you are the owner of a mobile home, you may also wish to contact the Golden State Mobile Homeowners League, which is an association of homeowners that will advise you and may be able to help resolve your problem. The league's address is Post Office Box 876, Garden Grove, CA 92642. The league's toll-free number is 1-800-888-1727.

Registration and titling offices

The Department of Housing and Community Development has nine district offices for inquiries relating to the registration and titling of manufactured homes. They are located in Redding, Sacramento, San Jose, Fresno, San Luis Obispo, Winnetka (in the Los Angeles Area), Riverside, Santa Ana, and La Mesa (in the San Diego area). For assistance concerning manufactured housing registration and titling, call toll-free: 1-800-952-8356.

Here is a final checklist for manufactured home buyers:

-Before you buy, locate a site for your home. Be sure that the location, if a private lot, is approved for manufactured homes; check the foundation requirements and all other governmental requirements. If you are locating your home in a park, check the rental agreement and park rules.

-When comparing prices, look for the label with the manufacturer's suggested retail price. Also, look for the Compliance Certificate, which will tell you the climate for which the home was intended.

-Read and understand your contract before you sign. Be sure to initial all changes to the original contract. Keep a copy for your records.

-Get a receipt for all cash or property you give the seller.

-If you buy from a dealer, the dealer will transfer the title for you. If you buy from a private seller, have him or her transfer the title to you and send the paperwork to the Department of Housing and Community Development, Registration And Titling Unit, for a new title in your name.

-Typically, if you are buying a home built before July 1, 1980, you will have to pay sales tax at the time of purchase. All manufactured homes will be taxed in one form or another at least once a year.

-If you install the home yourself, you must obtain installation permits from the appropriate enforcement agency.

-After the home is installed, it must be inspected by a city, county, or state home inspector who will give you a copy of the mobile home installation acceptance or a certificate of occupancy.

-A new manufactured home is covered by a one-year warranty. Should a substantial defect occur, write to the manufacturer and/or dealer immediately, and keep a copy of your letter.

This SmartLaw message is based on a booklet called "The Consumer's Guide To Manufactured Housing," published in 1990 by the State Department of Housing and Community Development. To order a copy, you may call Housing and Community Development's toll free number 1-800-952-5275, or one of Housing and Community Development's nine district offices in your area.

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