What Happens to Your Loan When a Mobile Home Park Is Sold?
A park sale changes who owns the land and who collects the space rent. It does not change who owns your home, and it does not change your loan. Your balance, rate, term and payment are set by your loan documents, and the sale of the land is not part of them.
What deserves your attention is the rental agreement for your space and the community’s rules, because those are what a new owner works with. This applies to homeowners in land-lease communities in California and Arizona. A park closing is a different event from a park being sold, and it is covered further down.
Your home and your loan are separate from the land
In most communities you own your home and rent the space it sits on. That one fact explains almost everything about a park sale.
- The home is yours. It is titled or registered in your name, separately from the land: through HCD (the Department of Housing and Community Development) in California and through the MVD (ADOT Motor Vehicle Division) in Arizona. A change in who owns the land does not transfer or cancel that.
- The loan is a contract between you and your lender. It is secured by the home, not by the land. You keep making the same payment to the same place.
- The space is rented. The rental agreement, the rules and the rent are where a new owner comes in.
What a park sale does and does not change
| Item | Does the sale change it? | What to do |
|---|---|---|
| Ownership of your home | No | Keep the title or registration with your home records. |
| Loan balance, rate, term and payment | No | Keep paying your lender as before. |
| Who owns the land and manages the community | Yes | Note the new owner’s and manager’s contact details from the written notice. |
| Where space rent is paid | Often | Follow the community’s written instructions and keep proof of every payment. |
| The amount of space rent | Not automatically, but it can change later | Read the rent provisions in your rental agreement. |
| Rules, upkeep and utility billing | They can, over time | Ask management in writing what, if anything, is changing. |
What a new owner can change
A new owner may bring in a different management company, change how the office runs, spend more or less on upkeep, and take a different approach to rent increases and to enforcing the rules. All of that happens within limits set by your rental agreement and by state and local law.
Do not assume the sale cancels or rewrites the agreement you signed. Read what it says about its term, renewal and rent increases, and ask the new management in writing whether anything is changing.
The legal framework depends on the state. In California it is the Mobilehome Residency Law, which HCD links from its page on your rights as a mobilehome park resident; cities and counties may have their own ordinances as well. In Arizona it is the Arizona Mobile Home Parks Residential Landlord and Tenant Act, Title 33, Chapter 11 of the state statutes.
This article is general information, not legal advice. For a question about your own agreement, talk to a qualified professional in your state.
Occasionally the buyer is the residents themselves. A resident-owned community works differently, because the homeowners collectively own the land.
What to do when the notice arrives
Five things to do when your community is sold
- Gather your records Find your rental agreement, the current rules, proof of your recent rent payments, the home’s title or registration, and a recent loan statement.
- Read the notice itself Note the new owner or management company, the date of the change and where rent is to be paid. Go by what is in writing, not by what is going round the neighborhood.
- Confirm where rent goes before you change anything If the instructions are unclear, ask the office in writing, and keep proof of each payment you make.
- Ask what is changing Request written confirmation of your current rent and of any planned changes to rent, rules or utility billing.
- Keep paying your loan as usual, and redo your budget if the rent changes The loan payment is unaffected, but your full monthly cost is the loan payment plus space rent plus utilities. If a new rent figure strains your budget, speak to your lender before you miss a payment, not after.
If you plan to sell your home
A change of owner does not stop homes in the community from being bought and sold. The community’s rules continue to apply to a sale, including its approval of your buyer as a resident.
If you were planning to sell soon, talk to the office early. Ask whether the application process has changed and what rent an incoming buyer would be quoted, since both affect who can buy your home.
A sale alone is not a reason to refinance
Nothing about a park sale requires you to change your loan. If you were already wondering about your financing, the ordinary questions still apply: ask whether a refinance could lower your monthly payment or shorten your loan term.
Refinancing may be available depending on the home, land status, and current guidelines, and all financing is subject to credit approval. Space rent is counted in a refinance review as well, so a higher rent affects that calculation. The refinance options page sets out what to compare before you decide.
If you would like to go through where your loan stands, talk with a specialist at Santiago Financial, Inc.
