Originally posted by
@Sandy Uhlmann:
I own a mobile home located in a park that I am currently renting out. Tenants have been paying on a regular basis for approx 2 years. They are interested in buying the trailer on payments. I would like to create a promissory note that relates to this purchase. While I think I have a good understanding of a promissory note for the purchase of real property, I am finding a promissory note related to the purchase of a mobile home in a park a bit of a challenge for me. I guess I don't have a good understanding on what happens to personal property (mobile homes, cars, ect....) when the lien goes unpaid. It seems that there are a lot of things that need to be included in these notes that are not included in promissory notes related to homes. I fear that there are many things related to the sale of a mobile home in a park that I am not considering. I need some help in creating a really good promissory note for a mobile home in a park. Some of the things that I think need to be addressed are:
Payment of lot rent. What happens if lot rent goes unpaid? The park may or may not notify you. Generally, when I was buying homes in parks they would contact me because I had a solid working relationship with the park manager. When the lot rent didn't get paid by the homeowner, they would start the eviction process. If you have a good promissory note and sales contract, it should state that if they don't pay, they are breaching their agreement with you.
What happens if they want to move the trailer? They have to pay you off first prior to moving it. That was standard language in my contract.
What happens if they decide to sell the trailer before they pay it off? Should I consider writing in the note that I have first right of refusal? The note has to be paid off first because there is a lien on the title. Thus, in order to transfer title (and according to your contract), they have to pay off the home just like a normal stick-built home.
I need a clause in the contract that says they agree to carry insurance on the trailer and add me as additionally insured. Yes
I am sure that there are many other clauses that I am not even thinking of that need to be added into this promissory note. Yes
I plan to have the promissory note notarized by all parties and will have a bill of sale that I will take to the DMV. I plan to have the purchasers of the mobile home at the DMV with me and have DMV prepare a new title with my name as the lien holder. I plan to have DMV send the title to me which I will hold until the trailer is paid off. Yes, that's typical.
I have been dragging my feet in the creation of this note. Any input that I can get would be appreciated. Also, should I just purchase a promissory note from online and add the clauses that I need? Also, is it necessary to pay for a servicer? I am not going to be charging an interest rate, just a flat number of payments that is the same amount that they are paying now for their rent. Not in my opinion. You should contact an attorney that specializes in manufactured housing. Call up some of the local mobile home dealers and ask who they use for their legal work.
Thanks in advance for the input!
Sandy
