The Sale of Manufactured & Mobile Homes By Real Estate Brokers
NOTE: HB 2072 will become effective August 2017. This bill provides that licensed real estate brokers and licensees may sell manufactured/mobile homes under certain circumstances. For more info, go here.
An ADOH license is generally required to sell manufactured/mobile homes
Generally, a license issued by the Office of Administration of the Arizona Department of Housing (“ADOH”) is required to act as a broker or salesperson in the sale of manufactured homes, mobile homes and factory-built buildings (also known as modular) and subassemblies. Pursuant to A.R.S. §41-4047(3-4), it is unlawful to “engage in the business of a salesperson of manufactured homes, mobile homes or factory-built buildings . . .” or engage in the business of contracting to sell any new or used manufactured home, mobile home, factory-built building or subassembly (hereinafter collectively referred to as “manufactured/mobile home”) without a license issued by the ADOH.
There is a limited exemption from the ADOH licensing requirements for real estate licensees
There is a limited exemption for real estate licensees in the ADOH licensing requirements. Pursuant to A.R.S. §41-4028(B) (1), the requirements of licensure from the ADOH do not apply to:
Real estate brokers and real estate salesmen licensed under section 32-2122 . . . with respect to used manufactured homes, mobile homes, factory-built buildings or subassemblies, if the manufactured home, mobile home, factory-built building or subassembly is listed in a contract for transfer of an interest in real property executed by its owner and is installed on the real property.
FAQ’s on qualifying for the ADOH licensing exemption
(1) What are the statutory requirements of the ADOH licensing exemption?
- The manufactured/mobile home must be “used”
- The manufactured/mobile home must be “installed” on the property
- The manufactured/mobile home must be “listed” in a contract for transfer of an interest in real property executed by its owner
(2) When is a manufactured/mobile home “used”?
A used manufactured/mobile home is one “which has been sold, bargained, exchanged or given away from a purchaser who first acquired the unit which was titled in the name of such purchaser” “in good faith from a licensed dealer or broker for purposes other than resale.” See A.R.S. §41-4001(27) and A.R.S. §41-4001(39).
(3) When is a manufactured/mobile home “installed” on the property?
Pursuant to A.R.S §41-4001(18) a manufactured/mobile home is installed on the property when it is:
- connected to on-site utility terminals.
- placed on a foundation system.
- secured by ground anchoring.
“Installation” does not require the filing of an affidavit of affixture for purposes of the exemption.
(4) When is a manufactured/mobile home “listed” in a contract for transfer of an interest in real property executed by its owner?
This occurs when both the manufactured/mobile home and the real property interest is transferred in the same purchase contract. In order to transfer both the manufactured/mobile home and an interest in the real property in the same purchase contract, the seller must either own the real property or have the right to directly assign the lease for the property.
(5) What is the significance of recording an affidavit of affixture?
Except in limited circumstances set forth in A.R.S §33-1501 , an affidavit of affixture may be recorded by a person who owns a mobile home that is installed on real property owned by the owner. A.R.S §42-15201 et. seq. A mobile home that has been permanently affixed to real property and for which an affidavit of affixture has been recorded:
- will be assessed as real property A.R.S. §42-15202, and
- any liens against the mobile home must be perfected in the same manner as real property or a fixture. A.R.S. §28-2135.
So when can a real estate broker sell a manufactured/mobile home?
According to the ADOH, a real estate licensee may list and sell a manufactured/mobile home without a ADOH license only if:
- the manufactured/mobile home is:
- installed on the real property and
- listed in the purchase contract for the transfer of an interest in the real property executed by its owner (i.e., the seller owns the real property or has the right to directly assign the lease for the property), or
- an affidavit of affixture has been recorded against a used manufactured/mobile home so that it is considered real property.
For Additional Information
For information on obtaining a license, visit The Arizona Department of Housing website at: https://housing.az.gov/general-public/manufactured-housing/licensing
To review the Arizona statutes governing the sale of manufactured/mobile homes, visit the State Legislature website at: www.azleg.state.az.us/ArizonaRevisedStatutes.asp
i The Manufactured Housing Division of ADOH maintains standards of safety for all manufactured homes, mobile homes and factory-built buildings. These standards promote the health, safety and welfare of Arizona citizens and are consistent with the U.S. Department of Housing and Urban Development (HUD) standards.
ii Pursuant to A.R.S §33-1501 a person who owns a mobile home located in a mobile home park on real property that is not owned by that person may file an affidavit of affixture with the county recorder of the county in which the real property is located if: (1) the mobile home has been installed on the real property with all wheels and axles removed in compliance with applicable state and local mobile home installation standards; (2) The owner of the mobile home has entered into a lease for the real property on which the mobile home is located for a primary term of at least twenty years and the lease specifically permits the recording of an affidavit of affixture; (3) Before filing the affidavit of affixture, a memorandum of lease is recorded that includes all of the requirements set forth in the statute. Once recorded the mobile home and the leasehold interest to which it is affixed shall be treated as real property.