Manufactured Home Parks
In-Park Sale of a Manufactured Home
An in-park sale occurs when a resident sells the his or her home to a buyer who wants the home to remain in the same park. A resident has the right to sell the home within the park regardless of the home’s age.
The park cannot:
- Charge more than a $25 application-processing fee when a resident wants to sell a home within the park.
- Require a resident to sell the home to the park.
- Require a resident to use the park as a listing or selling agent.
If a park owner is licensed as a dealer, a park owner may agree in writing to broker the in-park sale of a resident’s home.
The park can:
- Charge up to $25 for processing a prospective buyer’s application to become a resident.
- Allow a home to remain vacant for 90 days or longer as specified by park rules.
- Require rent to be paid on time and the lot to be properly maintained.
- Approve a buyer as a resident.
When selling a home through a broker, the broker must be a licensed manufactured home dealer or a licensed real estate broker. A resident can sell the home they own and live in. If a home or lot does not meet existing park rules, the park can require the owner to follow the rules before the park approves the sale of the home.
The park owner may require a prospective buyer to agree to rules different from those that applied to the resident who is selling the home. However, the park owner cannot enforce any rule adopted or amended after the resident entered into the rental agreement that would:
- Significantly increase the difficulty or time involved in selling the home.
- Significantly decrease the price at which the home can be sold.
- Involve any other significant cost for either the resident or buyer, except the cost to bring the home into compliance with preexisting maintenance rules.
However, if a home, shed, or other structure has become so dilapidated that repair is impractical and total replacement is necessary, the park may require replacement by the resident or prospective buyer in accordance with a generally applicable rule adopted after the resident initially entered into an agreement with the park.
Park’s Approval of a Buyer for Residency
The park has the right to approve a buyer as a resident. The seller must tell the prospective buyer, in writing, that the sale is subject to final approval by the park.
When the prospective buyer seeks to become a resident, the park owner may require the prospective buyer to submit certain information. The required information may include:
- The purchase price of the home.
- The amount of monthly payments on the home.
- Any relevant documentation necessary to verify the information.
- The creditworthiness of the prospective buyer.
The park must comply with the following when processing a buyer’s application:
- The park must explain, in writing, its decision-making process for approving or rejecting new residents.
- The park must make copies of this explanation available without charge and include a copy with rental applications.
- The written policies for approving or rejecting residents must be reasonable and apply uniformly to all applicants.
- If the park owner requires a personal interview, the park owner must be available for interviews at reasonable times.
- The park must make a decision within 14 days after receiving the buyer’s completed application. If a delay occurs, the park must give the seller and the buyer a written explanation and make a decision as soon as possible.
- The park cannot be any stricter in approving a prospective buyer than it is in approving other prospective residents.
- If the park denies a buyer’s application, the denial must be reasonable. The park owner cannot deny residency to a prospective buyer for any reason prohibited by federal, state, or local law.
- If a buyer gives the park a written request for an explanation of the park’s decision, the park must provide it within three days.
Safety Disclosure and Repairs
The Legislature repealed the law that previously required the seller of a manufactured home within a park to provide a “safety feature disclosure form” to any prospective buyer. Sales of used manufactured homes manufactured after June 14, 1976, must comply with the Notice of Compliance Form.
A manufactured home can be repossessed under the following circumstances:
- If the resident-owner defaults on the security agreement for the manufactured home;
- If the resident-owner defaults on another security agreement for which the manufactured home has been used as collateral; and
- If the owner who does not reside in the home defaults on the security agreement for the manufactured home.
A secured party may commence repossession of a manufactured home by personally serving upon, or by sending by certified or registered United States mail and concurrently sending a copy of the notice by first class mail to the occupant of the manufactured home a notice and, if the occupant is not the debtor, by sending a registered or certified letter to the last known address of the debtor under the security agreement. The notice must set forth the circumstances constituting the default and state that the secured party will, at the expiration of a 30-day period following receipt of the notice, seek a court order removing the occupant from the manufactured home and repossessing the manufactured home, unless the debtor or the occupant acting on behalf of the debtor cures the default prior to that time. The notice of default must contain the following language:
“Your loan is currently in default. Contact us immediately at [insert phone number] to discuss possible options for preventing repossession. We encourage you to seek assistance from the foreclosure prevention counseling program in your area. Nearby community agencies will answer your questions, offer free advice, and help you create a plan. You can contact the Minnesota Home Ownership Center at (866) 462-6466 or www.hocmn.org to get the phone number and location of the nearest foreclosure prevention organization. Call today. Waiting limits your options. IF YOU DO NOT BECOME CURRENT ON YOUR LOAN WITHIN 30 DAYS, WE WILL SEEK A COURT ORDER REPOSSESSING THE HOME, AND BY COURT ORDER YOU WILL HAVE TO VACATE THE HOME.”
A debtor, or an occupant of a manufactured home acting on behalf of a debtor, may within the 30-day period, cure a default by tendering full payment of the sums then in arrears under the terms of the security agreement, or by otherwise remedying the default, and by paying the reasonable costs, not to exceed the sum of $100, incurred by the secured party to enforce the security agreement. Cure of a default shall suspend the secured party’s right to seek repossession of the manufactured home.
In addition, if the debtor does not cure the default within the 30-day period, the secured party must also send a registered or certified letter and concurrently send a copy of the notice by first class mail to the occupant of the home and, if the debtor is different than the occupant, to the debtor, stating that the debtor has 30 days to reinstate the loan by paying the defaulted amount plus additional allowable fees incurred by the secured party in order to regain possession of the home.
The reinstatement notice shall contain, at a minimum, the following information:
- The name of the secured party, the debtor, each current assignee of the loan, if any, and the original or maximum principal amount secured by the loan;
- The date of the loan;
- The amount in arrears on the loan as of the date of the notice;
- A description of the manufactured home upon which the loan is secured; and
- The amount of allowable fees incurred by the secured party in order to regain possession of the home prior to the court order.
The reinstatement notice must also include the following language:
“Your manufactured home is currently being repossessed. Contact us immediately at [insert phone number] to discuss possible options for reinstating your loan. We encourage you to seek counseling with the foreclosure prevention counselor in your area. Nearby community agencies will answer your questions, offer free advice, and help you create a plan. You can contact the Minnesota Home Ownership Center at 866-462-6466 or www.hocmn.org to get the phone number and location of the nearest counseling organization. Call today. Waiting limits your options. If you do not become current on your loan within 30 days, including any additional fees, you will no longer be entitled to reinstate your loan. We are seeking a court order repossessing the home, and by court order you will have to vacate the home.”
Except in cases of voluntary repossession, upon expiration of the 30-day period specified in the notice of default, a secured party must apply to the district court in the county in which the manufactured home is located for an order directing the seizure and delivery of the manufactured home, so long as the right to reinstate has not been exercised. The exercise of the right to reinstatement suspends the secured party’s right to seek repossession of the manufactured home and shall immediately terminate any court action filed.
The party repossessing the home has the right to sell the home through an in-park sale if the following conditions are met:
- After repossessing the home the secured party must notify the park owner that the home has been repossessed.
- The park owner must receive this notice before the park owner has begun eviction proceedings.
- The secured party must pay up to three months of the resident’s past due rent. This liability for past rent does not include late fees.
- The secured party must make monthly rent payments until the park owner approves a buyer for the repossessed home.
- The secured party must comply with all park rules relating to lot and home maintenance.
A secured party offering a home for an in-park sale may be evicted for the same reasons a resident could be evicted.
To repossess a home, the repossessor must bring the resident to court in the county where the home is located, rather than any county the repossessor might choose.
Removal of a Home After Repossession
When a secured party repossesses a manufactured home and removes the home from the park, the secured party owes the park owner rent for the period beginning with repossession and ending on the last calendar day of the month the home is removed. However, the secured party would not owe past due rent prior to the time the secured party accepted voluntary repossession or took action if:
- Within seven days after accepting repossession, the secured party notifies the park owner in writing that the home is being repossessed.
- The secured party pays each month’s lot rent as it becomes due.
- The secured party removes the home from the park within seven days after repossessing it.
If the secured party fails to meet any of these conditions, the secured party would owe the park owner up to three months of past due rent, excluding late fees or other charges.