Posted by RobertR CO on April 27, 2000 at 20:09:20:
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Why am I legal owner and not lien holder? - Posted by Lisa in Oz
Posted by Lisa in Oz on April 26, 2000 at 18:47:09:
Hi All,
When I went to HCD (first time) to submit the paperwork on the deal I had just done–the government employee confused me a bit. On the back of the title, I just assumed that my buyer was the registered owner and that I would be the lien holder. I was told to fill out the legal owner section instead. This concerned me from a liability issue. Was this the correct thing to do? If not, can it be changed without having to pay a bucket full of dough?
Thanks,
Lisa Charles
‘Lisa in Oz’
you did the right thing… - Posted by chris_wa
Posted by chris_wa on April 26, 2000 at 19:59:45:
up in washington, we do these deals via a title just like a car. being the secured party, we sign on as the legal owner…after all…we do still own the thing until we recieve our final payment from the buyers. we kind of use those terms interchangabley up here as well. for example, i go on the insurance policy as the secured party or another term, “lien holder.” essentially, you share liability on the home with your buyers…so be sure to keep on them about insurance! and you are also on the hook if they stop paying rent…which recently happened to me…but how sweet that is! in my case, we got the home back in better condition than originally sold for…they left quietly without raising a stink…and had already paid me back all the money i had invested in the deal. hope that money pump turns out to be one like lonnie had that keeps coming back and back and back and back!
at any rate…sounds like you are on the right track…keep your paperwork straight…ducks in a line and go out and do another!
good luck.
chris_wa
Are you sure about that? - Posted by Karl (Oh)
Posted by Karl (Oh) on April 26, 2000 at 22:29:29:
If you sell a mobile home on a note, you don’t want to be the owner on the title. You want to be the lender with a lien on the title. If the furnace in your house dies, would you call your mortgage company to get if fixed? No. What if there?s a fire due to faulty wiring and someone dies? Can you sue your bank? Of course not.
In Ohio the mobile home titles are also just like auto titles. I put the title in the name of the owner/occupant, then record a lien on the title, just like I was a bank making a loan on a car. Then I keep possession of the title until its paid off, just like the bank. If you put the mobile home in your name, you?re more of a landlord than a lender, and your liability increases. Lonnie covers this in Deals on Wheels.
When I sell a mobile home on a note, I have my buyer sign the promissory note, along with two power of attorney forms. One form allows me to title the home in the buyers name, and the second allows me to put it back into my name if they default on the note. At the time I do the title work for the buyer, I give the title folks a copy of the promissory note and they record the lien. Then I give my buyer a copy of the title. When the loan?s paid off, the lien is cancelled and the owner gets the real title. This is how the other guys in Ohio taught me how to do it (thank you John Hyre and Bob McNeely).
I wouldn?t trust some clerk down at the county office to give recommendations on protecting your business interests, they probably don?t understand exactly what you?re doing.
Karl Kleiner
interesting… - Posted by chris_wa
Posted by chris_wa on April 27, 2000 at 10:55:27:
karl
i do the same thing as you. maybe i didn’t write that so clearly. however, i have found that the banks and lending companies here do put their business name in the “legal owner” part of the title and the buyer puts his on the “registered owner” (just had one signed off from associates and another from conseco) You are right about holding the title…i keep that until it is paid off, then just sign off on the title and give it to my buyers. As for your first paragraph…of course you wouldn’t call your bank to fix your wiring. things are spelled out clearly in my promissory note(as i’m sure they are in yours) that we aren’t responsible for anything more from this point than collecting a check. and if they do default, we get the darn thing back. i do like your power of attorney idea. that must make things easier if something were to go sour and you weren’t on good terms with your buyers any longer. thanks for the tip.
So are you saying that your name(or biz name) is not anywhere on the title? period? hmmmm… I could see where that could have some benefits…but ultimately, regardless if you are the Lien holder or legal owner, wouldn’t you be responsible for any past due rents,etc if the buyer skips?
chris_wa
Re: Are you sure about that? - Posted by CH-CA
Posted by CH-CA on April 26, 2000 at 22:54:39:
Just wanted to say you spelled that out very well, and since I think things are done the same here in CA (actually I don’t know for sure), your message clarified a lot for me.
CH
yes it is - Posted by Karl (Oh)
Posted by Karl (Oh) on April 27, 2000 at 21:39:15:
It sounds like your state’s titles have a few more blanks to fill in than mine. Our titles just show the owner of the home, the previous owner, and the lienholder, all on the front. So my name is on the title, but as the lienholder.
As far as responsibility for past rent if buyer skips, it depends on what your agreement is with the PM. If you take back a home and want to resale it, the PM has to be happy, cause they’re approving your next buyer. I think its standard practice to guarantee the PM lot rent if you repo a home until you resale. Thats how you get them to agree to let you do your thing in their park. Lenders like Conseco are also stuck paying the lot rent on their repos.
I got very lucky with one of my parks. The manager doesn’t charge me lot rent on any of my homes until I sell. I have an account with the park for ordering materials (skirting, roof coating, etc), and the manager bills me at the end of the month. I hire the two on-site maintenance guys to do work for me. (I helped one of these guys buy a home through my broker last week). I’m even taking over an empty office in the PM?s office building rent free. Why? Because so far I?ve moved 5 mobile homes into his park and put them on empty lots that weren’t making him any money, and he knows I?m bringing more in. He’s very motivated to help me do my thing.
Now another park I work in, they barely know who I am. I guess I need to work on them a little more.
Karl Kleiner
As lienholder, you are responsible for lot rent if… - Posted by JHyre in Ohio
Posted by JHyre in Ohio on April 27, 2000 at 19:06:34:
you wanna be. It’s not your home, so if the owner skips, you are not legally obligated to pay (in OH) by mere virtue of the fact that you are a lienholder- the banks would NEVER permit such a law to exist (at least outside of the Peoples Republic of California, et al). However, as a practical matter you are on the hook for past-due rent when you repo…if you want that home to stay in the park, that is. And you want the park to play nice with you. Even the big banks that do not depend on parks to bring them buyers the way we do customarily pick-up past-due lot rent. This is one reason why my people do not get behind by more than one month on lot rent- I’m on the hook for practical purposes, though not legally compelled to pay.
John Hyre