Manufactured Homes: What Happens If I'm Behind on My Land Lease Payments?

Manufactured homes, formerly called "mobile homes," are constructed on a permanent chassis, with a tongue, axles, and wheels that are transported to a residential site in one or more sections. These homes either sit on land the homeowner owns, on private land owned by someone else, or in manufactured home communities. The definition of a manufactured home "community" varies from state to state. At a minimum, a manufactured home community is a piece of land with two or more manufactured homes. As of 2021, according to the National Consumer Law Center, approximately 43% (2.9 million) of existing occupied manufactured homes are located in manufactured home communities, also called "parks" or "land-lease communities."

If you own a manufactured home on land owned by someone else, you most likely lease or rent the land. And if you fall behind on the payments for the site, you might be evicted and required to move your manufactured home.

What Are Land Lease Payments for Manufactured Homes?

With a traditional, stick-built home purchase, you own both the house and the land it sits on. With a land-lease property, you'll own the manufactured home but not the land it sits on.

A land lease agreement is a contract between the manufactured home owner and the land owner. The manufactured home owner gets to use the land (that is, the manufactured home gets to stay on the property) for a specified period of time in exchange for rent payments. The lease agreement will also have the terms and conditions of the lease, including rent amount, lease duration, tenant responsibilities, and restrictions for using the land.

Land lease payments for manufactured homes are the monthly (or annual) fees paid to lease the land a manufactured home is located on. These payments are like rent. A land lease might involve additional costs, over and above rent, such as homeowners' association (HOA) fees. These fees often pay for shared amenities in a manufactured home community, such as a pool, gym, or playground.

Getting a Loan to Buy a Manufactured Home

Many manufactured homes are financed with chattel loans. "Chattel" is a legal term that means personal property rather than real property. Chattel loans are different than mortgages; they're more like auto loans. They tend to have a shorter loan term (such as 20 years instead of 30) and a higher interest rate. Because fewer lenders offer chattel loans than traditional mortgages, a consumer's opportunity to shop for a competitive loan is limited.

You can also buy a manufactured home with a personal loan, FHA, or VA loan.

What Happens If I Fall Behind on Payments for a Manufactured Home?

A manufactured home may be assessed as real or personal property, depending on the situation, and can be foreclosed (or repossessed, depending on how the home is assessed, if you have a loan on the home and you stop making the payments.

What Happens If I Fall Behind on My Land-Lease Payments?

If you skip a land-lease payment or two, you'll probably incur late fees. Habitually failing to make your land lease payments can eventually lead to eviction.

Can I Be Evicted for Not Paying Land Lease Payments?

If you stop making the payments for the land, you can be evicted and might have to relocate the manufactured home. Moving a manufactured home can cost $5,000 to $10,000 (many years' worth of equity for homeowners) and can permanently damage the home. It can also be very difficult, if not impossible, to find another location for the home because available lots might be limited to newly manufactured homes.

How Can I Avoid Falling Behind on My Land Lease Payments?

If you're behind in the land lease payments for your manufactured home, you might be able to avoid an eviction by working out a deal with the land owner (the lessor). Contact the lessor and ask if you can work out a deal to make the payments more affordable. For example, the lessor might be willing to give you an extended grace period (an allotted amount of time during which you're not expected to make payments) or modify the terms of your agreement to reduce the monthly payment amount.

If the lessor agrees to change the repayment terms, be sure to get the agreement in writing and keep a copy for your records.

Special Protections for Homes Located in Manufactured Home Parks

Manufactured home owners generally must move their home off the land following an eviction. However, once a manufactured home has been deposited in a park and hooked up to electricity, sewer, and water, it can be quite difficult to relocate the home. Again, moving the home might cause permanent damage to the structure.

So, some states strictly regulate manufactured home parks to protect manufactured home owners from eviction.

Evictions and Manufactured Home Parks

Manufactured home parks generally can't evict a resident for no cause. For example, certain states provide that a manufactured home owner who rents a space or site in a licensed manufactured home park can only be evicted for "just cause" such as:

• nonpayment of rent
• not living up to a condition in the lease agreement (like not maintaining your space), or
• conduct in the park that constitutes an annoyance or danger to other tenants.

Generally, the park owner has to file an action in court to evict you. Some states have a procedure similar to regular landlord and tenant actions, while others have particular laws that address manufactured home park evictions. Some laws might even permit the park owner to seize your home.

Residents' rights in manufactured home parks usually differ from those of manufactured home owners who don't live in a park. Also, laws vary from state to state.

How Does the Manufactured Home Eviction Process Work?

You could be evicted if you live in a manufactured home park and don't pay your lot rent. Once you fall behind in rent payments, the land owner will typically have to send you a written eviction notice, sometimes called a "Notice of Termination of Tenancy" or a "Notice to Quit," that begins the eviction process. Next, the owner usually must file a lawsuit asking the court to order you to remove the home from the site and leave.

Again, the procedure is similar to regular landlord/tenant actions in some states. However, some states have specific laws that address manufactured home park evictions.

You'll get a specific number of days to respond to the suit. If you don't file an answer, the court will grant a default judgment in favor of the owner, and you'll have to move the home. (Some laws might permit the park owner to seize your home.)

Even if you respond to the lawsuit, the court might still decide in favor of the land owner and order you to leave the site, taking the home with you. (If you're a tenant renting both the space and the manufactured home, generally, you'll be treated in the same manner as an apartment tenant in an eviction. To learn how that works, visit our Renters' and Tenants' Rights area.)

Resident-Owned Manufactured Home Communities

Small mom-and-pop business owners operate many of the country's manufactured home parks, while large corporations own others. Either of these third parties may implement excessive rent increases or fees from residents to generate profits.

To avoid rent and fee increases, a growing trend is for residents to come together to purchase the manufactured home park in which they reside. They then own shares of the community. This arrangement is often referred to as a "resident-owned community."

The residents form a board of directors, which determines the bylaws for how the park will operate as a cooperative. After the park becomes a co-op, any new person moving into the park is normally required to become a member.

Benefits of Living in a Resident-Owned Manufactured Home Community

Resident-owned communities are becoming more popular because they protect residents from many downsides of renting from a park owner. For instance, the community members, rather than a third-party park owner, decide matters like rent escalations.

Also, sometimes third-party park owners choose to sell the park's land to developers to make way for expanding commercial development or other growth, forcing residents to move. When residents own the community, there's little risk of this event occurring.

Get More Information About Evictions and Manufactured Home Parks

For general information regarding manufactured homes, go to HUD's website and enter "manufactured home" in the search box to find a list of relevant links.

If you rent a space for your manufactured home in a park or another site and are behind in the rent, talk to a local lawyer knowledgeable about these issues in your state. You might also be able to get information from a manufactured home park tenants' association or a manufactured home owners' association.