Legal Question in Real Estate Law in California

I would strongly encourage you to contact a local attorney right away to review this transaction - not because the Seller did anything wrong (I can't say whether they did or not from the information you provided), but because you don't appear to fully understand what you are buying into.

First, yes all mobile home sales should be handled by an escrow. Without escrow, you cannot be fully assured that you will receive valid title to the home, and additionally, something like the past-due taxes could come back to haunt you without use of an escrow. Also, if the home was sold by a licensed Manufactured Home Dealer (licensed by HCD), then the transaction has to go through escrow by law. Further, you should always use an escrow so you do not get ripped off by someone taking your money, and not delivering title to the home. If you paid $1.00 or $1,000,000.00, it should go through an escrow for your protection.

Second, you need to review your contract to buy the home, as compared to the escrow "Estimated Buyer's Closing Statement." What are the $1,000 in charges? One-half of escrow for a manufactured home in a park does not cost $1,000. $500 for escrow fees is more likely. You need clarification as to what the additional fees are, and did you agree to pay them in the purchase contract.

Third, as for property taxes, the bill you received is for "Unsecured Property Taxes," not Real Property taxes. Manufactured homeowners pay one of two types of taxes - either "In Lieu Taxes" ("ILT") or "Local Property Taxes" ("LPT"). ILT is really just a registration fee paid to HCD in Sacramento each year. It goes down every year like a registration on a car. The problem is that when a home is on ILT instead of Local Property Taxes, you must pay sales tax each time the home is sold (i.e., 7.75% of the home's purchase price). For your home purchase, that may not seem like a big deal, but on say a $100,000 manufactured home, the sales tax could be a lot of additional cost. So, very likely, at some point the home you are buying was converted to LPT, and whomever owns that home now pays taxes each year to the County, and it goes up every year under Proposition 13.

So, are you liable for the taxes? Depends. You need to find out if these are past-due taxes, or prospective taxes. Could be a little of both. To close escrow, the escrow company must get a "Tax Clearance Certificate" from the County in which the home resides. To do so, you must pre-pay (usually) one year's property taxes on the home. That, however, should not be $500. Find out from the escrow company if you are paying only the prospective, new taxes, or the old taxes. Then read your purchase agreement - if you did not agree to pay the past-due taxes, then they should be charged to the Seller, not you. My guess, given how little you are paying for the home, is that you are responsible for paying most costs associated with transferring the home to you.

Fourth, space rent and taxes are two totally different things. You are not paying taxes because you own (or are buying) the land. You are paying taxes on the home, just like you pay taxes on your car, boat, airplane, etc... in the form of registration fees. You will pay space rent, and property taxes for as long as you own the home.

Finally, as for the insurance, unless it is required by the park (which it very well could be), or by the purchase agreement, then you can tell escrow that you do not intend to insure it. I would strongly recommend that you carry full liability and casualty insurance, as failing to do so regardless of what you paid for the home, is just not very smart. Insurance is a small price to pay to avoid losing everything you own in a fire, earthquake or because someone falls inside your house and sues you.

Again, I strongly recommend you consult with someone who can review these papers for you.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.