Buyers of single homes, duplexes, townhouses, condominiums, and other permanent structures should purchase title insurance. Title insurance is to protect homeowners from claims to ownership or use. Claims include assertions by prior owners, third-parties, creditors, and others that they have an interest in the property. Buyers want their real property to be free and clear of any claims to ownership or use of the property they buy.
Often, a lender will require that a buyer obtain title insurance as a condition of the loan. If it turns out that someone other than the seller was the true owner of the home, then the title insurance company should pay the lender the balance of the loan. The amount of payment will be the loan sum due to the value of the loan. The buyer may get any excess policy coverage.
Title company research
The title company will research any claims against the property such as outstanding lawsuits, past deeds, the existence of wills and trusts, divorce orders, bankruptcies, and tax claims. The title company will need to resolve any open claims (usually by the seller and the title company) before the title company will agree to insure the property.
So the question begs – can buyers of manufactured homes get title insurance.
Definitions of mobile homes and manufactured homes
Florida Statute 320-01 (2) defines a mobile home as
(a) " 'Mobile home' means a structure, transportable in one or more sections, which is 8 body feet or more in width and which is built on an integral chassis and designed to be used as a dwelling when connected to the required utilities and includes the plumbing, heating, air-conditioning, and electrical systems contained therein.”
(b) “ 'Manufactured home’ ” means a mobile home fabricated on or after June 15, 1976, in an offsite manufacturing facility for installation or assembly at the building site, with each section bearing a seal certifying that it is built in compliance with the federal Manufactured Home Construction and Safety Standard Act."
Manufactured homes are mobile homes. Mobile homes are not necessarily manufactured homes.
Title transfer
A manufactured home can only be sold if the owner has a title to the home. The new owner can then obtain the title through a transfer. Title in this sense is akin to the title to a car or truck.
Retiring title to mobile homes
According to statemaster.com, 10.4 % of all homes in Florida are mobile homes.
Under Florida Statute 319.261, there is “a process by which the owner of a mobile home which is permanently affixed to real property owned by that same person may permanently retire the title to the mobile home.”
Owners should complete the process formalities with the help of a Florida real estate lawyer. This includes proving ownership of the real property.
Title insurance in a manufactured home
Generally, mobile homes are either mobile or they’re not. Mobile homes that can move from one mobile park to another, are not “real estate." Title insurance for a movable home is generally not available.
Manufactured homes that have been “retired” or are otherwise considered “real estate” may be eligible for title insurance.
Mobile home buyers should review with their Florida real estate lawyer whether the mobile home is property or real estate. They should likewise review whether title insurance for the manufactured home is available.