Is There Any Lender Responsibility For Lot Rent.
I just compleated my first deal. The Buyers look good and seem responsible, and are very happy with their new home.
I called the Park Manager to let them know that we had closed the deal with the new owners (yes, park application and approval was obtained). During that conservation the manager indicated that I as the lean holder was responsible for the Lot rent if the Owner did not pay. I have no written agreement with the park on any subject or matter.
I guess I feel that I have NO responsibility for their lot rent. If at such a time I must foreclose and take the home back I would agree that I would be responsible for the lot rent from the day I got title back until sold again, however, I do not feel that I should be responsible for and back lot rent not paid, nor penalties........
Am I wrong here? This just may be a mis-communication between us, but before I stick my foot in my mouth with the park manager, I wanted to find out how others are operating...
Thanks
Jeff
I worked for a mobile home lender for years. Any time we forclosed on a property we, as the lein holder, had to pay back lot rent. Often they would work with us and make a deal, give us a discount, whatever. Try to stay on good terms with them, they doun't want an empty space just like you don't want an empty home.
Congratulations Jeff on your first deal!
Yes in many cases you as the lender can be held liable for the park fees.
When I do deals like this as the note holder I include the lot space fee as a separate charge in the agreement this way I will be sure the space rental is paid.
[addsig]
While the lender wouldn't technically be liable for the MHP rent, he/she's going to be on the hook for any unpaid rent because if it's NOT paid, the MHP will seize the MH for the unpaid rents due.
So if the L doesn't cover it, he's going to lose his security.
This is why it's such a good idea to put into the loan agreement, note, that the MHP rent has to be timely paid as it's due, and failure ot MH buyer to do this will be grounds to call the note due and repo the MH.
I own a MHP and yes you are responsible to pay any back rents. You also can move your home out of the park with out paying the back rents the MHP can not stop you from moving the home even if you owe back rents. The MHP although can not stop you from moving the home off, it must take you to court to collect any of the arrears in rent. I found this out the Hard way as most lessons are learned.
Good Luck,
Robert