Resident-Owned Manufactured Home Communities in California: What You Buy and How to Check

Buying into a resident-owned community in California usually means buying two things: the home, and an interest in the park. That interest is either a share or membership in the corporation that owns the land, or a deed to a lot or condominium interest. It is what makes the community resident-owned, and it is the part a listing explains least.

Before you make an offer, find out which kind of interest comes with the home, whether it is in the asking price, and what the records say about who owns the land.

The home and the park interest are separate purchases

The home is the familiar part. California titles and registers manufactured homes through HCD (the Department of Housing and Community Development), not the DMV, and that does not change because the community is resident-owned. California HCD title basics covers what to check on the home’s record.

The park interest is what differs from one community to the next. For how resident ownership compares with renting a space, see how resident-owned communities work.

What comes with the home under each structure

Either kind of ownership interest carries a stake in the common areas, meaning the streets, the clubhouse and the utility lines, and a share of the cost of keeping them up.

California law treats these communities as their own category. The Mobilehome Residency Law has a separate article for mobilehome subdivisions, cooperatives, condominiums and resident-owned parks, beginning at Civil Code section 799. Read it, or ask an attorney, before assuming the rules for rental parks apply to you.

A converted park can have owned and rented spaces side by side

Many resident-owned parks in California began as rental parks. When a park is converted by subdividing it, state law requires that each existing tenant be offered the choice to buy the lot or “to continue residency as a tenant” (Government Code section 66427.5). Not everyone buys. The result can be a park described as resident-owned in which the space under a particular home is still rented.

The label can also describe a park bought with public help. HCD’s MORE program helps finance the purchase and conversion of mobilehome parks, and its applicants are typically resident organizations, nonprofit housing sponsors or local public entities. Only the first of those is ownership by the residents.

How to check a California community

Start with the names. Every record is filed under a legal name, which is often not the name on the entrance sign.

Confirming what you are buying into

1. Get the legal names Ask the seller or the community office for the park’s official name and the name of the entity that owns the land.
2. Find the park in HCD’s records HCD issues each mobilehome park a permit to operate. Its mobilehome park search lets you confirm the park’s state record.
3. Look up the owner with the Secretary of State The business search shows what kind of entity owns the park. A nonprofit corporation or cooperative formed by residents reads differently from a limited liability company.
4. Check the parcel with the county assessor or recorder One parcel for the whole park points to ownership by a single entity. Separate parcels for each lot point to lot ownership. Owner names are not always shown online, so you may need to call or visit the office.
5. Get what transfers in writing The purchase agreement should say whether a share, a membership or a deed transfers with the home, and at what price.

Costs beyond the price of the home

• The price of the interest. Some listings fold the share or lot into the asking price. Others quote the home alone, and the share or lot is extra.
• Property tax on the interest. In a subdivision or condominium, your lot is assessed to you. In a park bought by an entity its residents formed, state law treats the transfer of a share or membership as a change in ownership of “a pro rata portion of the real property of the park” (Revenue and Taxation Code section 62.1), so that portion can be reassessed when you buy. Ask how property tax is billed to members.
• The monthly fee and the reserves. The fee typically pays the community’s own costs: any loan on the park, taxes, insurance and upkeep. Thin reserves can mean a special assessment later.

This is general information, not legal or tax advice.

What a share or a deed means for the loan

A lender starts with what secures the loan, and in a resident-owned community that depends on what you hold.

With a share or membership, you own the home but not, individually, the land. The home is generally financed on its own as personal property with a home-only loan, often called a chattel loan. Ask whether the share price can be included in the financing or has to be paid in cash.

With a deeded lot, the question is how the home is recorded. In California, HCD Form 433A is used to report the installation of a manufactured home on a foundation system and is recorded with the county when applicable. It is an important property record, but it does not by itself guarantee financing. What a 433A is explains the form.

When the home and lot are real property together, land-and-home financing may be an option. If the home is still titled through HCD, ask how the home and the lot will each be handled.

In either case, the monthly fee or dues count toward the housing cost a lender compares with your income, and the community’s approval of you as a member is a separate review from loan approval. Programs for California manufactured home loans vary, and all financing is subject to credit approval.

Documents to read before you make an offer

These papers show how the community is owned, what it costs to belong and how it is run.

The record searches and the terms are different across the state line. If you are also looking there, see resident-owned communities in Arizona.