Mobile Home Notes in Florida - Posted by David Auten

Posted by David Butler on March 22, 2006 at 14:07:14:

Thanks Bob,

And you are right on here in large part. I hastily gave the best answer for working with real estate notes :-(, rather than the more appropriate ground you covered here (glad to say I rememberd to cover it in the Appendix of Tin Can Alley a bit though ;-)…).

I’ll use the time of night, and my ongoing recovery from heart surgery (reduced oxygen to the brain) as my primary excuse.

But as I mentioned previously, as is almost always the case, careful reading of the statutes usually reveals the exceptions - and that applies here too.

For some reason, you hopped over Sec. 520.02 (15) “Motor vehicle retail installment seller” or “seller” means a person engaged in the business of selling motor vehicles to retail buyers in retail installment transactions.

Applying that with in the context of the other definitions and discussion above, puts things back in proper perspective, and context. Too many folks make mistake of taking the law in vacuous parts, rather than in the full context of what makes regulations what they are (many state officials routinely do this too:-(…)

In any event, you are correct in that regularly purchasing “retail installment contracts” from “…persons ENGAGED IN THE BUSINESS OF selling motor vehicles to retail buyers in retail installment transactions. …” would limit you to only acting as a “finder” under the common law “finder’s exception” doctrine, when working with retail dealers (and possibly "Lonnie dealers too under certain circumstances) to buy that paper. Or, you could elect to obtain a license.

But two things - first, it is NOT clear that [all] mobile home notes are “retail installment contracts” as defined under full scope of the Statutes at Sec. 520 described above. Second, it IS clear, also by definition under Sec. 520 - that private sales, per se, are not covered.

Subsequently, if I purchase notes from private sellers, (NOT persons ENGAGED IN THE BUSINESS OF selling motor vehicles to retail buyers in retail installment transactions), I can go on about my business. And this is where a lot of the note investing (for your own account) starts out for smaller, and/or beginning investors. We also purchase notes from Park owners who aren’t regularly engaged in the business of retail sales transactions, but merely took back a home for delinqeunt space rent or abandonment, resold it and carried the paper. (Some park owners ARE engaged in the business of retail sales transactions, but less than 30% in my experience).

Hopefully that will clarify further and also help insure that nobody simply excludes themselves from taking advantage of what they CAN do - by not fully understanding what THAT is. And thanks Bob for forcing us to explain this better!:slight_smile:

Best of success and Many Happy Returns to you and David!

David P. Butler

Mobile Home Notes in Florida - Posted by David Auten

Posted by David Auten on March 21, 2006 at 18:29:24:

I was wondering if anyone knows if you need a license in Florida to buy and sell Mobile Home notes. I would like to begin brokering Mobile Home notes and then move into buying for my own investment. Any information would be greatly appreciated.

Thank You

David Auten

Re: Mobile Home Notes in Florida - Posted by Bob Smith

Posted by Bob Smith on March 21, 2006 at 23:44:18:

With all due respect to Msrs Butler and Faulkner, I believe you do in fact need a license in FL to buy and sell MH notes (assuming we’re talking about MHs that aren’t real estate). Florida Statutes Chapter 520, Retail Installment Sales. It takes some unwinding of the statute but the gist is that buyers of MH notes are sales finance companies, which must be licensed. Some supporting references follow (

520.02(9): “Motor vehicle” means any device or vehicle, including automobiles, motorcycles, motor trucks, trailers, mobile homes,…

520.02(13): “Retail buyer” or “buyer” means a person who buys a motor vehicle from a seller not principally for the purpose of resale, and who executes a retail installment contract in connection therewith or a person who succeeds to the rights and obligations of such person.

520.02(14): “Retail installment contract” or “contract” means an agreement, entered into in this state, pursuant to which the title to, or a lien upon the motor vehicle, which is the subject matter of a retail installment transaction, is retained or taken by a seller from a retail buyer as security, in whole or in part, for the buyer’s obligation.

520.02(16):“Retail installment transaction” means any transaction evidenced by a retail installment contract entered into between a retail buyer and a seller wherein the retail buyer buys a motor vehicle from the seller at a deferred payment price payable in one or more deferred installments.

520.02(17): “Sales finance company” means a person engaged in the business of purchasing retail installment contracts from one or more sellers. The term includes, but is not limited to, a bank or trust company, if so engaged.

If you’ve gotten this far, it is clear that mobile home notes are retail installment contracts. Note there’s no requirement that the seller of the contract be a licensed motor vehicle dealer, so even private sales are covered. As to the license itself:

520.52(1): A person may not engage in the business of a sales finance company or operate a branch of such business without a license as provided in this section; however, a bank, trust company, savings and loan association, or credit union authorized to do business in this state is not required to obtain a license under this part. Any person authorized as a licensee or registrant pursuant to ss. 494.006-494.0077 is not required to obtain a license under this part in order to become an assignee of a home improvement finance seller.

Getting caught is a first degree misdemeanor (520.98): maximum $1,000 fine per offense, plus court costs.

Re: Happy Hunting! - Posted by David Butler

Posted by David Butler on March 21, 2006 at 20:55:22:

Hello David,

A driver’s license might be helpful;-)

Marc?s answer is on the money, but I thought it might be helpful to expound on it a bit.

A careful reading of the Florida Statute in Ch. 494, Sec. 494.001 of the Banking title, indicates that Florida has some limitations on certain activities with regard to mortgage notes. However, the applicable statutes apply almost exclusively to the act of originating mortgages, not the purchase and sale of existing mortgages (though a few states do have some limited restrictions on those acts too ? along with many exceptions to their regulations).

According to the Annotations found on page 7 in Ch. 494, Sec. 494.001, the Annotated Florida Statutes which offer the long standing favorable opinion of the Florida State Attorney General’s office regarding what we do in the private cash flow industry, to wit:

  1. Mortgage brokers - Person acting on his own behalf (paragraph 2):

“An investor or dealer in EXISTING mortgages who purchases mortgages as an investment or for resale, for his own account, is not within the purview of this chapter, and need not and should not, be registered as a mortgage broker. (Op.Atty.Gen., 059-189, Sept. 24, 1959).”

  1. Purchase of existing mortgages, mortgage brokers:

“Persons who, as brokers or agents of others, purchase existing mortgages as investments or for resale are not within the purview of this chapter, and need not and should not be registered thereunder, so long as such transaction is not a scheme to procure a mortgage from another, within the purview of said mortgage brokerage act. (Op.Atty.Gen., 059-189, Sept. 24, 1959).”

Although I am not one to back away from a legal argument when necessary… in Florida at least, I am inclined to defer to the State’s Attorney General’s office:-).

Also, while acting as an agent for another doesn?t appear to be a licensing factor in Florida according to the Florida Attorney General?s office (though it is in California and several other states); as we have pointed out here in previous discussions on the topic, the ?law of agency? doctrine itself does apply in all states. So? most of us in the private cash flow industry go to great lengths to avoid acting as anybody?s agent or representative. Whether brokering, or buying notes for our own account, we deal purely on our own behalf in terms of negotiating note deals, using the ?duty of fair dealing? as our primary guideline.

Hope that helps, and as you?ll learn from spending a little more time here researching previous discussions, some of us love to purchase well-secured private MH paper. Maybe we?ll be doing some deals with you in the near future. Looking forward to your success!

David P. Butler

Re: Mobile Home Notes in Florida - Posted by Marc Faulkner

Posted by Marc Faulkner on March 21, 2006 at 18:57:04:

You do not need a License in Florida to buy or sell mobile home notes.


Marc Faulkner