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Legal Breakdown: Mobile Homes

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This is the transcript of the Legal Breakdown video on mobile homes. If you prefer to watch the video, please click here

Welcome back for another Legal Breakdown. We are going to talk about mobile homes, and more particularly, can a Realtor sell a mobile home with their real estate license? And the answer is, it depends. What you all know as real estate licensees, Iowa code 543B gives real estate licensees gives the authority to perform acts on behalf of others with respect to real property. So, what is real property? Real property under the Iowa code means. Real estate means real property wherever situated and includes any and all leaseholds or any other interests or estate in land, and business opportunities which involve any interest in real property. So, again, you, as a Realtor, you as a real estate licensee have the power to perform acts with respect to real estate. Real estate includes real property. What you know is real property, that is most general level, means land or property that is affixed or attached to the land.

Personal property, on the other hand, is very different. It is not attached to the land. It is moveable. It is freely able to go different places. What is a mobile home more like? A mobile home, under the Iowa code, means any vehicle, any vehicle without motive power used, or so manufactured, or constructed as to permit It is being used as a conveyance upon the public streets and highways. So, again, per the Iowa code, a mobile home is not defined as real estate. It is defined as a vehicle. It has a certificate of title. And when we see mobile homes, often times, like in a mobile home park, some people might think that that's actually sitting on a foundation, but oftentimes, it is not. There is actually wheels underneath that mobile home. And there is, oftentimes, a skirting that covers a person from seeing that. And most oftentimes, the person in a mobile home park is actually paying to rent in the mobile park, the space to park or put their mobile home.

So, that is why mobile homes are more like personal property. They are not affixed to the land. They are not attached to the land. And what is critical that every single Realtor has to know is there is a totally separate licensing process for people to sell mobile homes. A person wishing to sell mobile homes must make application for a mobile home retailer's license with the Iowa state building code commissioner. For information about that website and that application process with the building code commissioner, visit this website: https://dps.iowa.gov/divisions/state-fire-marshal/factory-built-structures. You will be able to see those licensing requirements in more detail. After reading that information you might ask, "All right, if I'm just selling one mobile home, if I'm just writing one offer on one mobile home, am I really a mobile home retailer?"
We need to look at what the code says a mobile home retailer is. "A mobile home retailer means a person who, for a commission or other thing of value, sells, exchanges, or offers, or attempts to negotiate a sale or exchange of an interest in a home, or who is engaged wholly, or even in part, in the business of selling these mobile homes, whether or not the homes are owned by the retailer." So, the question - can I make an offer for a client on a mobile home? You are basically acting as a retailer when you are doing that. And I have heard people say things like, "Well, you might need a retailer's license to list them. But as long as I just am representing a buyer who wants to make an offer, I'm not really acting as a retailer." And I submit to you, when you read the code, any person making an offer or even attempting to negotiate the sale of a mobile home is acting as a mobile home retailer.

And here is a list of exemptions below of situations where you can sell an interest in a mobile home without a mobile home retailer's license. But these are very limited circumstances.  

“Manufactured or mobile home retailer” does not include any of the following: a. A receiver, trustee, administrator, executor, guardian, attorney, or other person appointed by or acting under the judgment or order of a court to transfer an interest in a home. b. A person transferring a home registered in the person’s name and used for personal, family, or household purposes, if the transfer is an occasional sale and is not part of the business of the transferor. c. A person who transfers an interest in a home only as an incident to engaging in the business of financing new or used homes. d. A person who exclusively sells modular homes.

And those are just ones that you might want to be aware of. But what you have to know, if there is one thing you take away from this topic - there is a provision which actually makes it a crime, a serious misdemeanor, to sell any interest in a mobile home without a mobile home retailer's license. So, please, please be aware of that and understand that. Now, the question is, “so no mobile homes are ever able to be sold with a real estate license?” There was one reason we had that as “it depends." And that is because there is one limited exception. There is a situation under Iowa code 435B where a mobile home, an interest in a mobile home, can actually be converted to real property for purposes of taxation. It is a tax section of the code.

Under that code section, what the code says is that if you take a mobile home, and you have it outside a mobile home park, and permanently fix it to a foundation, at that point, it can be converted to real property if you meet a whole bunch of other elements that you would want to talk to an attorney about in 435B to make sure It is fully been converted to real estate. But generally speaking, once a property is outside a mobile home park, and has been fixed to a foundation, and a person goes through that steps to convert it to real property, at that point, it is considered real property for tax purposes. It would seem, in such a situation, that the property has now become real property, and that it no longer would require a mobile home retailer's license because It is not a vehicle. At that point, it is real property. It is fixed, It is situated. It is not moveable.
Now, there might be some arguments. Somebody might say, "Well, Gabe, 435B is just a section of the code that talks about property taxes. And just because it is converted for property tax purposes doesn't mean that it is actually real estate for purposes for a real estate person being able to sell it." Those arguments could be made. They certainly are ones that you might consider. But I think, at the end of the day, it is, at least my opinion, that once it is outside that park, once it is on a permanent foundation, once it is being taxed as real property, it makes sense that it is less like personal property, and less like a vehicle, and more like real property permanently affixed to the land on which it sits. 

So, again, the key takeaways:
• Make sure you know the status of the mobile home.
• Make sure you are not writing offers on something you are unlicensed to do. 
• And if you have further questions, please reach out to the legal hotline or reach out to your broker or encourage your clients to seek legal counsel for advice, and do the right thing.