Escrow for manufactured and mobile homes

California law calls a home built on or after June 15, 1976 a manufactured home, and one built before that date a mobilehome. Both are built on a permanent chassis and can be moved (Health and Safety Code §18007).

Most are personal property. HCD, the California Department of Housing and Community Development, issues the title and the registration card and keeps the record of who owns the home and who has a loan on it (HCD). A sale isn’t complete until the seller signs off the title and hands over the registration card.

Some homes are real property. When a home is set on a permanent foundation under the state’s rules, a document is recorded with the county, HCD cancels the title, and the home becomes part of the land (§18551). From then on it’s taxed like a house.

When a dealer sells the home, yes. Every sale of a new or used manufactured home by or through a dealer has to go through escrow, and the buyer can’t give up that protection (§18035). We don’t handle dealer sales.

In a private sale between owners, no state law we found requires escrow. That’s the kind of sale we handle: homes in a park, on their own land, or on a permanent foundation. Escrow holds the money until the title, any loans, the taxes and the park’s approval are in order, and then pays the seller.

1. 01

   Step 1: Escrow opens

   The buyer’s money goes to escrow, not to the seller. We send HCD the notice that escrow has opened. While it’s open, HCD generally won’t record other transfers or liens on the home, for up to 120 days (§18100.5).

   HeldThe deposit is made out to escrow, not to the seller.

2. 02

   Step 2: The title search and the loans

   We run an HCD title search with the home’s decal number or serial number, to see who owns it and who has a loan on it. Each lender is asked for a payoff, and the lender that holds the title, called the legal owner, signs it over when it’s paid (§18035.5).

3. 03

   Step 3: The taxes are cleared

   If the home pays local property tax (its HCD decal starts with “L”), HCD won’t transfer it without a tax clearance certificate from the county tax collector. We order it, the county answers within 5 working days, and taxes owed can be paid from the sale (§18092.7, Revenue and Taxation Code §5832). In Orange County the first certificate is free (Orange County Treasurer-Tax Collector).

   CheckedTaxes owed are paid before the home changes hands.

4. 04

   Step 4: The park approves the buyer

   If the home stays in a park, the park’s management approves the buyer, on a schedule set by law. A copy of the signed rental agreement, or a statement the park and the buyer both sign, goes into the escrow (Civil Code §798.74, §798.75). See the next section.

5. 05

   Step 5: The disclosure is signed

   The seller gives the buyer the Manufactured Home and Mobilehome Transfer Disclosure Statement. If it arrives after the buyer’s offer, the buyer has 3 days to cancel, or 5 days if it was mailed (Civil Code §1102.6d).

6. 06

   Step 6: Closing and the HCD transfer

   Loans and taxes are paid, and the seller is paid. We prepare and send HCD the transfer: the signed title, the registration card, the Multi-Purpose Transfer Form (HCD RT 476.6G), the tax clearance and the fees. HCD wants it within 20 days of the sale, or a penalty is added (HCD RT 804).

   ReleasedLoans and taxes are paid, then the seller.

Ask the park for its “Information for Prospective Homeowners.” It has to give it within 2 business days, and it lists the starting rent and fees. Rent increases need 90 days’ written notice (Civil Code §798.30). In resident-owned parks, the owners may require their approval of a buyer, but they can’t require the home to be removed on a sale (§799.4).