Mobile Homes and Recreational Vehicles: Title Issues

Sean G. O’HairSean G. O’Hair

It is often said that mobile home and recreational vehicle parks are "in the business of making money." However, certain things when not done diligently can cost park owners and operators money. Title issues may not seem like a "sexy" issue or concern, but title problems can impact park operations. While parks are not in the business of "monitoring" title, there are at least three scenarios that will be outlined below that can that can impede the park’s primary business if neglected: 1) following through on transferring title of a mobile home sold by a resident or third party to the mobile home park or vice versa; 2) ensuring that title is properly passed in any sales within the park from an existing resident to a new resident; and 3) with respect to recreational vehicles specifically, obtaining title paperwork before allowing such a vehicle to remain in the park for an extended period of time.

It is fairly common in litigation or disputes involving mobile home tenancies for title to a home to change hands, whether pursuant to a "warehouse lien" authorized by statute after an unlawful detainer judgment is obtained against a defaulting tenant, or by reason of a settlement between the parties or a surrender of a home to the park by heirs of a deceased tenant. A park should always ensure that title is properly transferred from a current or former owner to the park pursuant to all applicable laws (e.g., Department of Housing and Community Development requirements in California). Failing to do so runs the risk of problems occurring later. For example, if the park places a new tenant in the newly purchased home, thinking that the park owns the unit but later finds out that it does not have title to the unit issues can arise. In a scenario where a home has not been transferred properly the park can ordinarily obtain title by way of an Abandonment Petition (in California at least) if the home is unoccupied. However, by placing a tenant in a recently purchased home, the park is denied this simple avenue of transferring title and may have to pay to relocate the new resident and there is no guarantee that the tenant will cooperate. At the very least he or she will be very unhappy. Following through and making sure that the park has proper title can save this and other unforeseen headaches. Indeed, an eviction might be impaired without proper title documents.

Mobile home residents are often unaware (or uncaring) of the trouble they can cause a park owner by selling their mobile home without notifying or getting the approval of the park (as most parks require). Such individuals are also likely to fail to transfer title properly. When the new owner defaults on payment of the rent, the failure to transfer title properly can cause an eviction headache for the park. One example is having an individual, whose identity is wholly unknown to the park, insert himself or herself as a defendant in an unlawful detainer case even after the case is essentially completed and lockout is scheduled. This individual claims that he or she is the owner of the mobile home (though not on title) and that park management knew or should have known that he or she was living there and should have been served with the notice to pay rent or quit. This happens notwithstanding that all legal documents were served on the unit itself, some addressed to "all occupants." If the judge allows this new "stranger" into the eviction lawsuit, further legal fees will be expended to resolve the situation. This is especially true when a dismissal of an eviction action might entitle one or more of the individuals to seek attorneys’ fees. Attorneys’ fees statutes exist in many settings, such as in California’s mobile home park statutes. The foregoing scenario is less about following through on title and more about keeping up with who lives in the units in your park as well as knowing who is on title. The above scenario could have been nipped in the bud had the Park been aware that the individual on title was no longer living in the unit and that a new individual was living in the unit. The park would seek to force the new owner to complete the title transfer process and require the new individual to apply for and qualify for residency within the park. Requiring use of a bona fide escrow office can alleviate 90% of these potential problems.

Many parks have recreational vehicles (and other motor vehicles including boats and dune buggies) in addition to mobile homes, either as residences, for short term stays, or for long term storage. Parks should require all title and registration information before such vehicles are allowed to enter the park. Some of these vehicles, for one reason or another, will be abandoned in the park. The law often does not allow the park to simply discard these vehicles when they are abandoned. Obtaining either court authority or other legal authority to discard or sell abandoned vehicles usually requires pieces of information about them such as the make, model, VIN, or registered owner that are not readily apparent by physical inspection either because of accumulated dirt or rust, or because the information is not displayed on the vehicle at all. Getting this kind of information up front can save all sorts of time and expense down the line, including trips to the Department of Motor Vehicles to obtain information. The sooner the park can rid itself of abandoned vehicles, the sooner the park can get back to the business of renting that space in exchange for rent.

The above situations illustrate just a few of the benefits of paying attention to the issue of title and registration. The park may not be in the business of concerning itself with title to personal property within the park, but paying attention to title issues can save the park considerable time (and legal fees) in the future.

Sean G. O’Hair is a litigation associate with the Southern California law firm of Hart | King and a member in the firm’s manufactured housing industry practice group. He can be reached at (714) 432-8700, (657) 622-4716 direct dial or at [email protected]. This article is for general information purposes and is not intended to be and should not be taken as legal advice for any reader.