The process of converting a mobile home to real property will vary state by state due to various real estate laws and the handling of mobile homes. Despite these differences, however, the conversion process follows a similar framework across the country.
Why Convert a Mobile Home to Real Property?
Mobile homes are considered personal property, a classification that is identical to vehicles, the editors at Triad Financial Services write. They are built on a temporary foundation, allowing the house to move from location to location if necessary. The home will need to sit on a permanent foundation to be considered real property, permanently affixing it to the land.
When a property is designated as "real property," it comes with several advantages. According to the National Consumer Law Center (NCLC), real property can increase favorable financing and titling options, increase the possibility of homestead exemptions, provide better consumer protection and protections for heirs and is more attractive in the resale market.
It is important to note that real property can conversely become a more significant tax burden along with the advantages, leading to the possible loss of certain consumer protections and putting limits on bankruptcy remedies.
Convert Mobile Home to Real Property
Homeowners can begin the filing process to convert mobile homes to real property with the local government once it is proven that the mobile home's wheels, trailer hitch and axles have been removed, and the house now sits on a permanent foundation on real property owned by the mobile homeowner. Utilities should be connected, and the home must be verified as up to code by the county code department, the writers at Triad Financial Services explain.
Once the home is up to code, the owner must submit an Affidavit for Removal of Manufactured Home from Vehicle Registration Files to verify that the mobile home is eligible and that the owner is surrendering the title, the lawyers at JDSupra write. Once submitted, the DMV will cancel the title. If there is an outstanding lien on the title, then the DMV will hold off on canceling unless they receive the lienholder's written consent.
Assuming all is accepted, the affidavit is then recorded with the Register of Deeds to ensure there is a record that the mobile home is now part of the real property the same way a house would be. By this point, all liens on the real property transfer to the mobile home and any future liens on the home must be applied to the real property as well. If the mobile home is untitled, owners must record a Declaration of Intent to Affix with the Register of Deeds. Once approved, the mobile home will be considered as an "improvement" to the real property, according to JDSupra.
Varying Conversion Processes
Since the process to convert mobile homes to real property can vary by state or even county, it is essential to check local laws since one size does not fit all. However, most states will require filing a Certification of Location, proving that the mobile home is fixed to a land parcel, verifying its eligibility for conversion, according to Triad Financial Services.
Other common documents include the mobile home decal number, the last issued HCD certificate of title and the original HCD registration card. The writers at Triad Financial Services also note that the mobile home title and the land ownership deed need to be identical for the conversion to real property to be approved.