Manufactured Housing

Q: I’m considering buying a manufactured home to put on some property I own. I heard there are new rules for buying homes like this. Is this correct?

A: Manufactured homes account for one third of all new homes sold in Texas today. Last year, the Texas Legislature passed HB1869, which changes the way these homes are sold and taxed. The new law classifies a mobile home as new improvement to real property if it is hooked up to utilities and permanently installed on a foundation on land also owned by the mobile home owner. This means that the owner may qualify for a homestead exemption and that the property tax rate will be the same as for other private homes.

Also, once the home is permanently attached on your land, any lien related to its purchase is converted to a lien on new improvements to the land and is covered by Texas’ homestead laws. Article XVI, section 60, of the Texas Constitution was also amended this year to recognize the converted manufactured home lien. This change is meant to clarify confusion with the previous law that some consumers faced when trying to refinance their mobile homes.

If your mobile home is located on land that you lease from someone else, it will still be classified as personal property. This is true whether the home’s placement there is temporary or permanent. However, it will be appraised separately from the land it sits on and will be taxed at the same rate as other single-family homes.

HB 1869 also says that when you buy a mobile home with an existing mortgage, you must be given a disclosure statement dealing with zoning, water and sewer service, property taxes, and homeowners’ association fees. The seller must also give you a written document stating the total purchase price, interest rate and repayment schedule. This disclosure must also list any future costs you will be responsible for, including property taxes, insurance, utility service or road maintenance.
In addition, closing on the sale of a manufactured home must now take place at a federally insured financial institution, a title company or a law office. The seller may not pay any part of the down payment or closing costs related to the sale.

Retailers, brokers or salespeople who arrange the purchase of the home may not receive any compensation from the seller. Remember that these new rules only apply to mobile homes sold or permanently attached to their foundations after January 1, 2002.

Q. I own a motor home and lease space for it at a trailer park. Are there new rules my landlord and I must follow?

A: HB 557, which takes effect April 1, 2002, creates new protections for consumers who own a mobile home or motor home and keep it on a lot leased from a trailer park or other property owner. These rules are roughly comparable to those for other residential tenants.

For example, the landlord may not enter a tenant’s mobile home with out permission except in an emergency or if the mobile home has been abandoned. Common areas must be open to all tenants in the park, and the landlord may not interfere with tenants’ meetings. The landlord must disclose the name and address of the owner of the property where the trailer park is located and of the management company that runs it. The law also covers maintenance and repair obligations, security deposits, subleasing, liability for property damage and eviction procedures.

Under HB 557, if a tenant’s lease won’t be renewed, the landlord must give a 60-day notice so that the mobile home may be relocated. The law requires a 120-day notice if the property is being converted from a trailer park to some other use.