During the last 30 years, mobilehomes have substantially changed. Trailers that were once towed behind the family automobile have been replaced by complete housing units designed to be permanent residences.

Throughout this guide, the terms "manufactured housing" or "manufactured home" are used instead of the more common term "mobilehome." The change reflects the evolution of the mobilehome to a more conventional home built in a factory but seldom moved after its initial installation. However, you will still find some references in this guide to "mobilehome" where the term remains in law, or continues as a prevailing description, such as "mobilehome park."

As manufactured housing offers California residents an alternative to conventional housing, prospective home buyers should be familiar with the various aspects of purchasing and owning a manufactured home.

Like buying a conventional home, buying a manufactured home is an important decision. Prospective manufactured home buyers will encounter many of the same things that conventional home buyers encounter: looking for the ideal home, disclosure, shopping for the best price, and securing the best financing. But there are also unique differences from conventional housing.

This guide explains some of the important facets of buying and living in mobile and manufactured housing.

ADVANTAGES AND DISADVANTAGES OF LIVING IN MANUFACTURED HOUSING

Approximately one million Californians live in manufactured housing today. Living in a manufactured home has both advantages and disadvantages which you should be aware of if you are considering purchasing one.

Advantages

• Cost: The initial cost is usually lower than a conventional "stick" built home.
• Warranty: New mobilehomes and manufactured homes have a one year factory warranty.
• Federal and state code standards: From September 1, 1958 to September 15, 1971, state law regulated only electrical, heating, and plumbing equipment in manufactured

• Maintenance: The manufactured home may need less maintenance than a conventional home. Generally, there is less yard area to care for. However, you still must provide for reasonable maintenance of appliances and the structure itself.
• Built to suit: Unless you buy a manufactured home right from the dealer's lot, you can often select the color scheme, furnishings, and appliances you want from the manufacturer's brochures. The appliances will arrive already installed in the manufactured home.
• Options and conveniences: Manufactured homes may be placed in rental mobilehome parks or under specific circumstances may be installed on conventional residential lots. Many mobilehome parks and manufactured housing subdivisions have special recreational facilities and amenities for their residents.

• Financing: You may find that financing terms and interest rates for manufactured homes are not as favorable as those for conventional housing.
• Rent increases: If you live in a mobilehome park, you probably rent the lot. Depending on the jurisdiction, some park rents are subject to rent control, but many parks offer long-term leases exempt from rent control, and buyers are usually required to sign a long-term lease as a condition of tenancy. If the management raises your rent beyond what you can pay, it is much more difficult to sell or move than if you were living in an apartment.
• Moving problems: Moving a manufactured home can be expensive. Mobilehome park spaces are increasingly scarce in some areas, so you may have difficulty relocating your manufactured home. Contrary to popular belief, once installed, 95 percent of all manufactured homes will not be moved again. If you have to move from the park, you may need to find a buyer for your home rather than take it with you. However, finding a buyer quickly, who wants to buy a used manufactured home at your asking price, may be difficult. Additionally, the fact that park management reserves the right to approve your buyer before he or she can move in can sometimes complicate a transaction.
• Rules and regulations: Some parks have rules which some may like, but others may find to be a disadvantage. The most common rules limit residency to seniors, prohibit pets, limit the time guests may stay with you without paying an extra fee, and require you to pay to maintain and repair the driveway and landscaping. The management can also change the rules without the consent of the homeowners with only a six month notice (six week notice regarding recreational facilities). Violation of a park rule can lead to termination of tenancy.

Before you buy your manufactured home, you should identify where you are going to put it. You will have to shop around and decide whether you want the home on your own land or in a mobilehome park.

Your Own Land

California cities and counties must now establish residential zones for manufactured homes. Those manufactured homes must be certified for installation on a foundation system. Cities and counties may require standards for setbacks and separations, enclosures, access, vehicle parking, aesthetic and square footage requirements. Architectural controls imposed on a manufactured home are limited to roof overhang, roofing and siding materials.

The local planning or building department can advise you whether or not a manufactured home can be placed on a specific lot under local zoning requirements. Once a site is located, do not purchase it until you have checked local laws regarding manufactured homes. Also, check local laws regarding utilities, including water and sewage hook-ups. These hook-ups can be expensive, especially if you have to drill your own well or put in a septic system. To avoid this expense, find out if established water and sewer facilities are accessible at the site. A building permit from the city or county is required before installation. A school impact fee may also be applicable. Contact the city or county building department for permit requirements and various fees and costs.

Mobilehome Parks

If you decide to place your manufactured home in a mobilehome park, keep the following factors in mind.

• Location: What kind of neighborhood surrounds the park? How far is it to stores, schools, and your job? Check the availability of water, utilities, and mail service.
• Condition: Are the community areas clean and well kept? In case of heavy rain, how is the drainage system? California law requires mobilehome parks to meet certain health and safety standards. Construction features of the park--including lighting, drainage, sewage disposal and grading--are regulated by state law.
• Facilities: Are there extra storage areas and second car parking if you need it? Are the recreational facilities and the laundry area adequate? If you have children or pets, do the park rules permit them? Are play areas adequate?
• Utilities: It is important to out find out about the park's utility system. California law regulates how the park management bills you if a "master meter" utility system with sub-metering to each lot is provided by the park. With this system, the park management must give all residents their own beginning and ending meter readings and individual bills for what each homeowner owes each billing period. The management must post in a conspicuous place the residential utility rate scheduled published by the serving utility and charge the resident the same amount as the utility company would if it were to bill the resident directly. In a few parks, the utility company provides individual meters for each resident and bills you directly. If you have any unanswered questions about your utility charges, contact the service representative of the utility company serving your park.
• Rules and regulations: Is reasonable landscaping of your manufactured home space required? Does your manufactured home have to be a certain style or have skirting and awnings? What are the hours for using the recreational facilities? Is residency limited to persons 55 and older? Are pets permitted? The park management may not discriminate tenants on the basis of race, sex, religion, color, nationality, marital status or sexual orientation.
• Rental Agreement: The park management must give you a written rental agreement which must contain:

-- The park's rules and regulations;

-- A copy of the Mobilehome Residency Law;

-- A description of the physical improvements and services that will be provided.

If you request one, the park management must offer you a written rental agreement for at least a 12 month period. The charges for rent, utilities, or incidental reasonable service charges for the first 12 months must be the same as would be charged for a month-to-month tenancy. Long term leases over 12 months exempt from local rent control may also be offered and sometimes are a requirement of residency. Normally, you must sign a rental agreement as a part of escrow before taking possession of the home.

• Check it out: If you are considering living in a park, talk with the park residents. Ask if they are happy with the park, what problems they may have and how they get along with the owner and manager. Before you sign any lease or rental agreement read it, and the park rules, very carefully. If you don't understand it, get advice from an attorney or a knowledgeable person.

Sellers of manufactured housing fall into four groups:

1. Brokers: Real estate brokers may only sell used manufactured housing registered in California for at least one year or homes installed on a permanent foundation system. The broker is not required to have a sales lot with various homes on display and probably will not have a repair facility. Brokers are regulated by the Department of Real Estate (DRE).
2. Private Owners: Manufactured homeowners may sell their own homes, just as a conventional home would be "for sale by owner." If you buy a manufactured home from its previous owner, be sure the entire agreement between you and the seller is in

1. Contractors: Contractors may sell five or more manufactured homes if they are placed on a permanent foundation in a single subdivision that is developed within one year.
2. Dealers: Most manufactured homes are sold by dealers and salespersons. Manufactured housing dealers and salespersons must be licensed by the California Department of Housing and Community Development (HCD). These licenses must be displayed in a conspicuous place at the business. A manufactured housing dealer may sell both new or used manufactured homes. If you are buying a new manufactured home, you should find a reliable dealer. Your dealer can help you decide which manufactured home is best for you; may arrange financing for you; and will, with the manufacturer, be responsible for repairing defects in a new manufactured home after delivery. When you are considering a dealer, always:

• Shop around.
• Check the dealer's business reputation. Ask the dealer for a list of former customers and talk to them. Ask them if they are satisfied with their manufactured home and the service and if they would recommend the dealer.
• Inspect the sales lot, offices and service facilities. Do they look "permanent?" Do the personnel seem competent? Is there an emergency supply of replacement parts for the manufactured homes they sell? Does the dealer have a service agreement with the manufacturer?
• Watch the sales techniques. The salespersons should be willing to answer questions, and you shouldn't be pressured to "sign now before it's too late." Once you sign, the purchase contract is not revocable. You should feel comfortable to go home and think it over. The salespersons should also take the time to discuss the pros and cons of all the models they sell, and explain the basic structure (e.g., wood paneling, color coordination, appliances, etc.).
• Compare the prices with other dealers in your area. While you should definitely look for a "good buy," the lowest price isn't always the best deal.
• Examine the manufactured home's warranty. A notice stating the existence of a one year warranty must be displayed in the dealer's office. All new manufactured home warranties run for at least one year from the date of delivery.
• There is more to "negotiate" than the price. Many dealers help with financing, so you can check their interest rates. Also, the amount of the deposit (which may be non-refundable) and the cash down-payment may vary.

When buying a manufactured home, you have rights under California law regarding the truthfulness of advertised claims.

• A dealer or salesperson cannot make any statement or advertising claim, verbally or in writing, which is untrue or misleading.
• An item pictured in an advertisement must be the item for sale.
• Any specific manufactured home advertised for sale by a dealer must be identified by its serial number.
• All new manufactured homes sold by dealers must bear a label which indicates the make, model and manufacturer's suggested retail price.
• A dealer cannot refuse to sell a manufactured home at the advertised price, excluding sales tax (if it is a used manufactured home), title and document preparation fees.
• An advertised price must remain in effect until the manufactured home is sold, unless the ad specifies a time limit.
• Deposit/down payment checks shall be made payable to an escrow company. Do not sign the purchase contract if it contains any blank spaces. Oral promises are not valid unless contained in the contract in writing.

The sales contract you make with the manufactured housing dealer is an important piece of paper. Any promises that you are given should be put in writing. Remember, oral agreements are very difficult to prove. Before you sign a contract, take your time, read it and understand everything that it says.

• If you don't understand the contract, ask someone to explain it to you. You may wish to consult an attorney.
• Make sure the contract has no blank spaces.
• Make sure the necessary changes are made on the contract and that everyone has initialed the changes.
• Make sure that your copy is the same as the dealer's.

You should determine before you sign the contract who is to arrange for transportation and installation of your manufactured home. Usually the dealer will arrange for transportation and installation and whether these services are included in the price of the home. Be sure and get the agreement in writing.

ESCROW RIGHTS AND RESPONSIBILITIES

When a contract, purchase order or security agreement for the retail sale of a new or used manufactured home (one installed on a nonfoundation system) is signed, the dealer must put the entire down payment and/or deposit, including any cash equivalents, into an escrow account within three working days. The conditions of sale are written into mandatory escrow instructions and require the buyer's signature. Among other things, the escrow instructions shall specify the conditions of delivery for a manufactured home. These escrow rules only apply to the retail sale of manufactured homes. Manufactured homes sold for installation on foundation systems are subject to escrow requirements similar to those of site-built homes.

• An escrow for the sale of manufactured homes by dealers is required by law. Escrow protects the consumer, so if you are told that you can save money by not using an escrow, take your business elsewhere.
• The escrow instructions should state the date escrow is to close. The purchase documents should also include this date. If, for some reason, it is not possible to close escrow by this date, it is possible for both parties to sign written escrow instructions extending the date.
• The value of each accessory in your home must be itemized in the escrow. This is important for your protection. For example, the manufactured home is ready to be occupied, except the air conditioner, which costs $2,500, has not arrived. If you have paid your entire down payment or deposit on the home and your lender has sent the funds to escrow, escrow could close, you could move in, and your $2,500 would remain in escrow until the air conditioner is delivered and installed. However, if you had not specified the amount of the air conditioner, the escrow agent would not know how much money to hold until installation is complete.
• Know the difference between a "deposit" and a "down payment." A down payment is always refundable and must be returned to you automatically if you decide not to purchase the home. A deposit, however, can be held in escrow pending a resolution of any dispute which may develop between you and the dealer. The amount placed as a "deposit" is negotiable and is not set by law. It is to your advantage to have your money characterized as a down payment and as little as possible characterized as a deposit. For example, suppose you have given a dealer $1,000 toward the manufactured home and have agreed to characterize $500 of it as a deposit and $500 as a down payment. If you change your mind about buying the home, the $500 down payment would be returned right away. The $500 deposit, however, would remain in escrow until you and the dealer agreed on all or partial release or until a court decided and ordered the escrow agent to pay out those funds.
• The dealer must deposit all money and cash equivalents into the escrow account within three working days. To ensure protection, make the check payable directly to the escrow company. The dealer cannot, by law, withdraw funds from escrow prior to its close. Make sure the escrow instructions state how the money is to be used.
• If your home is located in a mobilehome park, escrow cannot close until you sign the park rental agreement. A fully executed rental agreement or statement that the buyer agrees to the terms of the rental agreement must be placed into escrow. Otherwise, the buyer does not have rights of tenancy.
• Escrow should not close until the home has been delivered and passes inspection. The only exception is if the buyer installs the home. The escrow instructions must indicate the delivery destination, and after the delivery, escrow may close.
• Do not sign any agreement which limits your escrow protection. Any agreement which limits your escrow rights is prohibited by law, and any dealer who violates any provisions of the Health and Safety Code can be subject to license disciplinary action by the Department of Housing and Community Development (HCD), a lawsuit by the purchaser or both.

Mobilehomes and manufactured homes located on private parcels (not in mobilehome parks) which are placed on a permanent foundation and classified as improvements to the real property are subject to real estate disclosure upon resale. The seller must provide buyers with a real estate disclosure statement (TDS) prior to close of escrow which discloses the features and amenities of the home and any problems and code violations affecting the property. The form is found in Civil Code Section 1102.6. A dealer or real estate agent can assist the seller in completing the TDS.

Beginning January 1, 2000, mobile and manufactured homes classified as personal property (on rental land or in mobilehome parks) will also be subject to a resale disclosure requirement.

SPECIAL CONSIDERATIONS TO KEEP IN MIND IN BUYING A MANUFACTURED HOME

• Since manufactured homes may be built in one area and shipped to another, make sure the construction of your manufactured home is appropriate to your location. Manufactured homes built after June 15, 1976 must have a compliance certificate in the home indicating the geographic zone for which they were designed and insulated. You should check the capacity of the furnace and air conditioner and, if necessary, whether or not the air distribution system is designed for the addition of air conditioning equipment. If you are going to live in snow country, be sure the roof has the capacity to hold the expected weight of the snow. Also, you should consider having maximum insulation installed, along with storm windows. These options will not only save energy but will also make your manufactured home more comfortable.
• Usually axles and wheels are removed when owners place their manufactured homes in mobilehome parks. Dealers often will keep the axles and wheels to be recycled and used again unless the homeowner does not agree.
• If a new manufactured home is to be displayed for retail sale in California, the law requires that it must have a label containing the following information:

--Final assembly point.

--Name and location of dealer to whom it was delivered.

--Name of city or unincorporated area to which it was delivered.

--Manufacturer's suggested retail price, which must include the price of:

a. the basic manufactured home unit;

b. extra construction features and materials;

c. the total price of the manufactured home; and

d. a statement of whether the price includes or excludes the towbar, wheels, wheel hubs and axles.

The removal or alteration of the label from the manufactured home by anyone except the buyer is prohibited. However, the label can be removed if a new manufactured home has been attached to a foundation system.

HOW MANUFACTURED HOMES ARE TAXED

Sales or Use Tax

Manufactured homes, upon sale, may be subject to sales or use tax. When you buy a new manufactured home in which you plan to live, it is subject to a sales tax based on the relevant county's sales tax rate on 75% of the manufacturer's invoice to the dealer. The manufacturer's suggested retail price label, which must be on the manufactured home, lists the home's full price, including sales tax. Additional items sold with the manufactured home, such as window awnings and drapes, are subject to sales tax based on their cost. Sales tax on these items is usually stated separately in your contract.

When you buy a used manufactured home subject to an annual license fee you must pay a sales tax based on the relevant county's sales tax rate. The tax is determined by looking at a recognized used manufactured housing value guidebook approved by the California State Board of Equalization. If you buy a used manufactured home that is subject to local property taxation, you do not pay a sales tax.

If you have questions about the sales or use tax, contact your local State Board of Equalization district office. (Look in the telephone book white pages under "State of California" for the address and phone number.)

Property Tax or VLF

A manufactured home first sold before July 1, 1980, is subject to an annual vehicle license fee (VLF), unless it has been installed on a foundation system or it has been voluntarily converted to local property taxation. The license fee consists of a tax paid in lieu of a property tax, based on the home's value as established by law, plus a registration fee. The Department of Housing and Community Development is responsible for setting and collecting the VLF. If you allow the VLF fees to become delinquent for 120 days or more, you will be assessed a penalty of $50 per transportable section, and a lien will be placed on your home in favor of the state.

If a manufactured home is either first sold on or after July 1, 1980, or if it is on a permanent foundation system, the home is subject to local property tax. The tax is based on the home's assessed market value, and local county officials are responsible for determining and collecting it. Mobilehome accessories (awnings, cabana, carports, etc.) are also subject to local property taxes regardless of whether the home is subject to property taxes or the VLF.

REGISTERING AND RECEIVING TITLE TO THE MANUFACTURED HOME

Dealer Sales

When you buy a manufactured home from a dealer, the dealer must apply for the registration and title, and submit the necessary fees to HCD within 10 days after the date of sale (the day escrow is closed). In addition to submitting the application to HCD for the registration and title, the dealer must notify the county assessor in writing about the transaction.

Private Party Sales

When you buy a used manufactured home directly from its owner, the owner must give you a properly endorsed title. Then you must send the title, along with the necessary fees, to HCD to complete the transfer of ownership.

The registration card and title certificate for the home are issued by HCD. The title is issued to the registered owner of the home, if the home was not financed. If the purchase of the manufactured home was financed, title is issued to the primary lien holder. The registration is issued to all parties of record. If you are the sole owner, only your name appears on the registration. If the home was financed, all lien holders are named and each is issued a copy of the registration.

If you have not received the registration and title (if title is to be issued to you) within 60 days after the sale, notify HCD. Contact your nearest HCD office for assistance or call toll free 1-800-952-8356.

THE WARRANTY ON A NEW MANUFACTURED HOME

When you buy a new manufactured home, the dealer must give you a written, one year warranty when you sign the sales contract. This warranty from the manufacturer and dealer must be a separate written document entitled "Manufactured Housing Warranty." It states the specific legal obligation of the manufacturer and dealer. A copy of the warranty must be displayed in the dealer's business office. In addition, the dealer or manufacturer cannot require you to give up the warranty required for new manufactured homes.

For your protection, find out how extensive the warranty's coverage is, and how and by whom repair work is done. Examine the warranty for duration, terms and an assurance that the manufacturer and dealer guarantee the manufactured home to be free from any substantial defects in materials or workmanship.

A manufactured housing warranty must by law contain, but is not limited to, the following provisions stating that:

• The manufactured home is free from substantial defects in materials or workmanship.
• The manufacturer or dealer, or both, will take appropriate corrective action at the manufactured home's site to correct substantial defects in materials or workmanship. (The defects which appear within one year from the delivery date of the manufactured home to you must be repaired, provided you give written notice of the defects to the manufacturer or dealer at their business address no later than one year and 10 days after the delivery date.)
• The manufacturer and dealer will be jointly liable to you to fulfill the warranty terms, and you may notify either one or both of the need for appropriate corrective action in instances of substantial defects in materials or workmanship.
• The address and phone number of where to send written notices of defects.
• The one year warranty period applies to the structures, plumbing, heating, electrical systems and all appliances and other equipment installed in the manufactured home by the manufacturer or dealer.
• While the manufacturers of any or all appliances may also issue their own warranties, the primary responsibility for appropriate corrective action under the warranty rests with the dealer and manufacturer, and the buyer should first report all complaints to the dealer and manufacturer of the manufactured home.

If you have problems, you should act quickly to ensure that they receive attention. Normally, the manufacturer or dealer must complete any warranty service within 90 days of receiving the buyer's notice. Remember, the required warranty is good for only one year.

If your manufactured home needs repairs:

• Read your warranty.
• Make a list of all the problems--be specific, but remember that the warranty may only cover "substantial defects." It is wise to keep an ongoing list for the first few weeks or as new problems appear.
• Write to the dealer and the manufacturer immediately. Enclose your list of problems and ask that a repair person be sent as soon as possible. Be sure to keep copies of all correspondence.
• If possible, be at home when the repair person arrives.
• If the dealer and manufacturer fail to answer your first letter, write again. Tell them that you wrote before and received no reply. Set a time limit and tell them you will contact the Department of Housing and Community Development (HCD) if they don't answer. (You may want to use certified mail, return receipt requested, to prove when your letters were sent and received.)
• If you don't receive assistance, or are not satisfied, contact the HCD Ombudsman at 1-800-952-5275.

State law requires a permit to install any manufactured home that is more than 8 feet wide or 40 feet long. The manufactured home must be installed accordingly to the manufacturer's installation instructions and state regulations. An inspection and approval by the state or local enforcement agency is required before the manufactured home may be occupied. You should receive a copy of the inspection report, or a copy of the statement of installation acceptance (also known as Certificate of Occupancy).

Damage and defects caused by improper installation are covered by the terms of a new manufactured home warranty if installed or arranged to be installed by the dealer.

CONSUMER SERVICES

The state Department of Housing and Community Development (HCD) licenses dealers, licenses and inspects mobilehome parks, inspects manufactured home installations, issues certificates of occupancy, and processes and issues registration and titles for mobile and manufactured homes. Complaints concerning these matters may be addressed to the Mobilehome Ombudsman:

Telephone: 1-800-952-5275, 8 am - 5 pm weekdays.

Mail: Mobilehome Ombudsman
P.O. Box 31
Sacramento, CA 95812-0031.