Recent fraud cases in Iowa show the dangers of buying mobile homes on contract

Mobile homes can offer an affordable alternative to a traditional single family home for Iowa home buyers with limited financial resources, but contract buyers of these types of homes need to be very careful that they have proper title to the property or they could lose their entire investment and have little recourse.

Yesterday, November 15th, in the Des Moines Register, the pitfalls and dangers of these types of purchases were detailed in an article entitled Abandoned homes are sold illegally. The piece detailed the practices of a local trailer park, Radio City in Des Moines, where the park owners regularly sold abandoned homes to new residents on contract without having clear title to them. Meaning that the purchaser could never move the home and would lose all the money invested because the homes were not the owners to sell. This article comes a few months after similar cases were reported at the Regency mobile home park outside of Iowa City. Subsequent investigations by the Iowa Attorney General have determined that the practice is widespread in Iowa.

Buyers of mobile homes can protect themselves however with a few simple steps.

#1 If you're buying a mobile home on contract, hire an attorney to review the agreement. Think it's a needless expense? In the Register article it details the story of Shannon who lost $21,000 when her mobile caught fire and she learned the seller did not even legally own it. $500 for an attorney could save you a ton of heartache and thousands of dollars. Additionally, homes sold without titles can have back taxes on them you may not be aware of. A good attorney will make sure all taxes are brought current and that you will be the rightful owner.

#2 Make sure your name is on the title. Mobile homes are registered with the county treasurer and are regulated by the department of motor vehicles. Every home has a title. You need your name on the title just like you are buying a car. The seller would then be listed as a lien holder, just like a bank would be on a car title. You will pay use taxes as you would on a car as well.

#3 If you are buying a mobile home with real estate on contract, make sure you have title to the vehicle and that you record the contract with the county recorders office. To record the contract you will need a declaration of value and groundwater hazard form which you can find at the recorders website. There is a $35 recording fee, but by recording the contract your ownership interest becomes a matter of record. You'll want an attorney to help you with this type of purchase as well. And if you use an attorney they will also usually take care of recording the agreement for you.

If you take a few simple steps you can protect your investment, make sure you are the rightful purchaser and avoid any unpaid back taxes.

A few facts about mobile homes from the Manufactured Housing Institute:

Homes built before 1976 are called "trailers", those built from 1976 to 1997 are called "mobile homes," and those built from 1997 on are called "manufactured homes."

Trailers built before 1945 had a life span of 10.4 years.

Trailers built from 1945 to 1964 had a lifespan of 33.8 years.

Current manufactured homes have a life span of 55.8 years. (Source: Des Moines Register)