LONNIE DEALS - SPECIAL CLAUSES - Posted by Rev. Jimmy Mack

Posted by Rev. Jimmy Mack on January 19, 1999 at 13:12:10:

Thanks Soapymac for that wise counsel. I MUST deal with this today. I’ll let all of you know how it works out.

LONNIE DEALS - SPECIAL CLAUSES - Posted by Rev. Jimmy Mack

Posted by Rev. Jimmy Mack on January 17, 1999 at 14:58:41:

Greetings in the lovely name of the Lord Jesus Christ!

We just completed our first Lonnie deal recently. After transferring the title to our buyer’s name and placing a lien on the title we heard something a little distressing. The new “owners” are planning to do some remodeling that we wish they wouldn’t. AND we haven’t received a notice that they have purchased insurance with us as having a lien. We must have missed that in Lonnie’s books — we will handle the insurance differently on the next deal.

Is there any legal way that we can put a contingency clause - or a clause of some sort - that the buyer can’t remodel until the home is paid for?

If you use other special protective clauses please tell us about them.


Rev. Jimmy Mack & Janet

The idea is to sell not rent - Posted by Dirk Roach

Posted by Dirk Roach on January 18, 1999 at 18:10:25:

As many have already stated in this thread. It is their home. Whatever they do in it you really have little say in the matter. As long as they fulfill their contract obligations to you,l and as long as they do not violate the contract that entered into the park with. You have no say in what they do in THEIR home.
I say good for them that they want to do the improvements. Shows where their head is at as far as ownership goes.
Also who to say that something may happen a year or so down the road (ie. job transfere etc.) Now you can take this IMPROVED home back which will affect the price you sell it for on the next go around.
As for insurance, Why did you let these people take pocession without getting insurance? I think that it’s safe to bet that Ford Motor Credit would not let you drive a car off the lot (which you purchased on terms) without insurance.
Many insurance companies will issue a policy right over the telephone and fax you over the paperwork in like ten minutes. This should have gone this way. Anyhow. Now I would get it done. I would not wait around for someone to handle this when you can do this yourself with a couple of phone calls.
From your post it sounds like you might have either used a typical contract out of Lonnie’s book (and not read it carefully) or made one up yourself. Cool on both, but your going to want to understand every aspect of the contract (if you used one of Lonnie’s or made one up) and your going to want to include everything that you and the homeowner agree on in it.
Good luck and keep us posted on how it all works out,

Prego… - Posted by Soapymac

Posted by Soapymac on January 17, 1999 at 21:18:46:

with regard to the way to protect yourself by requiring homeowners insurance on the MH…

It’s in there.

Without reviewing my copies of Lonnie’s books, I remember the admonition as being only one or two sentences long, though.

Fact is, I betcha won’t do THAT twice.


Roy MacLean


Posted by David S on January 17, 1999 at 19:02:10:

the insurance matter should be spelled out in your sales agreement (contract) and promissory note. include the amount of insurance, type of insurance, and loss payee. also the remedies for not having insurance; who is responsible for buying and maintaining the policy to cover the loss payee in the event the buyer does not, and the remedies available if such event should happen.
as for the remodel, I agree with David and Piper, it’s their home.

David S


Posted by Laure on January 17, 1999 at 15:20:42:

Yea, I sold a home on contract last month and my attorney added a clause that states they may not do any improvements or changes over 2,000 without written permission from me.

Laure :slight_smile:

My thoughts… - Posted by David Alexander

Posted by David Alexander on January 17, 1999 at 15:14:04:

For what there worth, of course I’m not an expert.
It’s there home, as a Lonnie Deal, you become the lien holder (the Bank). The bank doesn’t tell you you can’t
spruce up your home. If you don’t want them to, L/O it to them, or rent it to them, don’t sell. I have a similar situation where the buyers of a MH asked me if it was ok for some friends to stay with them, and also made the comment that as soon as they paid me off in six years they had big plans on enlarging the bathroom,
etc. My comment to them on both instances was that “this is your home, not mine and as long as you make me timely payments you won’t here from me”. It is a young couple in this home and they were so happy when I said that, it made me feel good. I hope they fix up
the home. They will want to stay and pay if they put there money and time into it. It just makes my note more secure.

David Alexander

Re: Prego… - Posted by Rev. Jimmy Mack

Posted by Rev. Jimmy Mack on January 17, 1999 at 21:37:29:

Thanks Roy! I found it on page 85 in DOW. Lonnie says, “I collect the money for the insurance policy and call the insurance agency myself when we sell a home. That way, I know the insurance is in force.”

It is in the Promissory Note that they are supposed to get it but they haven’t. Do you think I ought to send them a registered letter about it — or go by and see them — or what? I value your opinion. I want to handle this right since this is our first Lonnie deal.

There’s a difference… - Posted by Soapymac

Posted by Soapymac on January 17, 1999 at 21:13:58:

between a mobile home sale and a contract for deed sale, Laure.

A mobile home is PERSONAL property, just like a car. As was stated below, in this situation, you are acting just like a bank; as long as the payments are made, you shouldn’t give a rip.

A contract for deed is a “whole 'nother sitchyation,” to quote one of my investors. As I understand the use of this method, YOU still own the home. It’s perfectly legitimate to protect yourself with a clause like you have…'cause they are messing with YOUR property.

MH’s and regular home contracts, in this instance, are like comparing apples and bananas…they are both fruit (homes) but they are different.


Roy MacLean

Yea but, - Posted by Laure

Posted by Laure on January 17, 1999 at 15:24:00:

What if they have no skills and really screw it up? Then it is not an improvement to the house. I have seen so many schlock jobs, it scares me ! I hardly ever let my Tenants paint anymore ! I used to think anybody could paint a wall. NOT !

Laure :slight_smile:

What you will want to do… - Posted by Soapymac

Posted by Soapymac on January 18, 1999 at 17:35:51:

is to provide things honest in the sight of all men.

Use the procedure described in Matthew 6 about restoring a brother when he has erred. Point out to your purchasers that this was a part of the contract…that you put it in there to protect THEIR interests and your own. Ask them if they have enough money to go buy another MH if the one they now live in was to burn.

Ask them what they would do if a friend of theirs was bitten by a dog that was theirs. Do they have the money to pay the medical? What if the dog was NOTY theirs? Could they STILL pay the medical?

Most people think insurance just protects the financial end of any transaction…and it does. But it also will protect them from the LIABILITY they are responsible for if SOMETHING occurs on their property.

So…you have explained this. They would like to get the insurance, BUT they do not have the money.

Here is a quick solution for you. Have them sign a note for the amount of the insurance. Secure the note with the MH. Run the numbers…then add on the MONTHLY payment they would have to make to you…to what they are paying you now.

Sometimes it is difficult to come up with $300-400 (whatever the premium is) in one chunk. But they can swing $25-30 a month more without too much of a problem.

OK…so you have made that suggestion…and been rebuffed. Politely tell them that the insurance IS part of the paperwork they signed. Should they STILL choose not to get it…even after you have tried to help them get it…you just have no choice in the matter; you’ll have to repossess.

Use your people skills here. They work in the ministry, and they work here, too.



Re: Yea but, - Posted by JPiper

Posted by JPiper on January 17, 1999 at 15:46:57:

I agree with you. I have seen paint jobs that look like they were applied with a broom.

But what house have you ever sold where you successfully kept the “buyer” from painting?? Doesn’t sound like a “sale” to me.