How the SAFE Act affects rent-to-own home sales for mobile home park owners
Selling the homes in your mobile home park to your residents is a goal of many park owners who prefer to go straight to land-lease ownership and eliminate the home maintenance responsibilities. But with the SAFE Act the procedure to do so becomes a little more difficult, but not a barrier. I recently received an email from a client that inspires this topic, and I think all owners considering carrying papers must know about how SAFE affects them.
This New Year’s I’m making a resolution to minimize maintenance costs and I think one of the best ways is to sell off our park-owned mobile homes (approximately 10% of homes on-property are park-owned) to current tenants or other buyers. They do provide a nice rental income but I’m done dealing with maintenance issues from renters who don’t care about the property. I’d like to sell them on a seller-carried contract. But I also might want to sell or 1031 Exchange the property in 2014 and don’t want to sell the homes if having them as rentals will be enticing to a potential buyer. What are your thoughts?
-StickingToResolutions in Asheville
There are a couple of things to consider before selling the mobile homes. First, if you are selling them as-is make sure your attorney drafts a sales contract that makes no warranty or guarantee to the condition of the home(s). Second, if you want to to carry paper on the homes then under the SAFE Act you can only do this if you become SAFE Act licensed. Third, in most states if you sell more than one home per year you will need to obtain a dealer’s license by first contacting your Mobile Home Association. Finally, whether a park has income coming in from park-owned homes as being a great selling factor for potential buyers depends on a few things, but largely the desires and objectives of the buyer. Some won’t want the hassle, like you don’t anymore. Some will think that’s great. The best thing to do before you do anything is to get an accurate evaluation of your park and have a formal property-valuation done, which I’m happy to do for you or anyone in your position at absolutely no cost to you.
- Cheers & Happy New Year!