Mobile Home Investing: Beware of Hidden Liens

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Investors that do not learn from their past mistakes are doomed to repeat them.  I recently helped a newer investor (Tim) close on a slam-dunk mobile home deal inside of a preexisting family mobile home park in his town.  The negotiation and acquisition went as smoothly as planned.  It was not until after the closing that a previous lien holder (Ron) came out from the woodwork demanding Tim satisfy the lien that the current seller (Gail) promised to pay him back in 2005.

Let’s dissect this problem together:

Gail ‘the current seller’ was 2 months behind on her lot rent to the park where she lived when she contacted Tim to purchase her mobile home.  Typically when sellers are behind on lot/pad rent they want to sell their property in a hurry.

Once Tim saw and walked through Gail’s property, he made an offer to purchase the home.  After negotiations, Gail agreed to sell Tim her property for only $2,000 in as-is condition.  Gail had both titles in her hand (one title for each half of the double-wide home) to prove she was indeed the owner and that the home was ‘free and clear’ of any liens that would have to be repaid before the title was transferred into Tim’s corporate name. “What a fantastic deal!” Tim thought.

The definition of a lien holder is a person or institution holding a mortgage or having a legal claim on the specific property of another person as security for a debt.  Most states typically have a ‘Lien Holders’ section on every mobile home title that lists every lien holder on record for that home.  If there are names in this ‘Lien Holders’ section of the title it is necessary that they release their claim to the property (usually by signing their names to the appropriate line of the title) before the seller may transfer the title to another name.

The very next day Tim had the title transferred into his corporate name ‘Mobile Home Innovators’ and proudly hung a copy of the title on his office wall.  Later that day Tim got an outraged call from Ron (the prior previous owner) demanding Tim pay for his lien of $4,500 which Gail had promised to pay him upon selling the subject home.  Ron was even threatening to take Tim to court if he did not pay!

What just happened: Back in 2005 when Ron sold Gail his mobile home, as terms of the sale Gail promised to pay him $4,500 when she resold the home down the road.  This Note agreement was signed and notarized but it was never recorded or attached to the title.  Therefore Ron made the costly mistake of never listing himself as equitable lien holder on the physical title and therefore had no way of letting the general public or the state know he had an interest in the property.

It was at this point I received a frantic call from Tim explaining the huge mistake that he had just made in purchasing his first deal.  Tim was completely unsure of his next move; should he pay the $4,500 or not?

I quickly reassured Tim that it was not he that made a mistake.  The mistake had been made by Ron; by not insisting his name be listed as lien holder on the physical title, Ron was solely trusting Gail’s word to pay him the $4,500 when she resold the home.  Once the name transfers on the title there was nothing Ron could do to cause Tim legal worry.  Gail lied to Tim about not owing anyone money for the home.  Tim then instruct Ron to direct his anger to whom it was deserved.

Concerning mobile homes that are located on rented land; in many states a lien must be printed on the physical title in order to be enforced prior to title transfer.  It is unfortunate what happened to Ron, he trusted his buyer blindly enough to not list himself as lien holder.  Doing so cost him $4,500.

– John

Of course, as with any legal matters, you may should consult with an attorney if this situation comes up for you.

About Author

John Fedro

Investing since 2002, John started in real estate accidentally with a 4-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to his cash-flowing portfolio. Since these early years, John has gone on to help 150+ sellers and buyers sell their unwanted mobile homes and obtain a safe and affordable manufactured home of their own. Years later, John keeps to what has been successful—buying, fixing, renting, and reselling affordable housing known as mobile homes. John shares his stories, experiences, lessons, and some of the stories of other successful mobile home investors he helps on his blog and YouTube channeland has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest here and on other prominent real estate podcasts, authored a highly-rated book aimed at increasing the happiness/satisfaction of average real estate investors, and spoken to national and international audiences concerning the opportunities and practicality of successfully investing in mobile homes.


  1. Robert, LOL! Damn right 🙂

    Greg, This has happened to me personally once before as well. There are still many people that do deals on a handshake these days and unfortunately everyone do not always tell the truth. In this case I guess you could say it is “Seller Beware”

    – John Fedro

  2. I am in the middle of a situation that is very interesting to say the least. My wife’s aunt purchased a double-wide in Feb. ’04’ from a retailer who is still in business. She was given clear title from the state of TX at the time of purchase. We purchased the home from her on a note and recently paid the note off. When we recently tried to get a new title we were notified that there were outstanding taxes due from another county from 2001 and 2002. Even though the retailer had clear title and then the wife’s aunt had clear title, the tax assessor is refusing to release the leins. Any ideas??

  3. Hey Brianboe,

    This isn’t the first time I have heard of this happening. In late 2003 TX switched from titles to Statements of Ownership and Location (SOL) this helped create a more regulated online database for past due taxes owed etc. I can’t say why these outstanding taxes weren’t spotted when the dealer applied to retitle the home.

    Hmmmmm… You may have to be patient and talk to someone above the $8 per hr clerk at the recording office if you haven’t already Or you may have to go to the other county to clear up this mess.

    A similar instance I know of happened in Potter Co. TX for the same reason. My friend had to provide evidence she did not own the home during these years and complained until someone listened but she did not have to pay the outstanding taxes.

    Interesting question. Please comment back with your ongoing results to help others experiencing the same trouble. 🙂

    – John

    • Resolution. In order to keep from paying an attorney more than was due, we reached an agreement directly with the Tax Assessor (ultimate decision-maker). We split cost of taxes only with retailer. County waived penalties and interest. Expensive lesson. In this case, the retailer paid any taxes that were posted as due at the time they bought it from the bank. These taxes were not posted with the State until 2005. Apparently our legislature passed a bill @ 2005, that enabled Counties to RETROACTIVELY go after back taxes. I have written a letter to my State Congressman. Doubt I will get any answer, but we will see. Thanks.

  4. camela johnson on

    I have the same situation..I bought a doublewide from a friend get the title on my name no liens listed. The mobile home is in a mobile home park and saying that i cant purchase the mobile home…but too late already did. Their saying to me i cant change the lock because its not mine. They fix the mobile home inside and their saying they spent $6000 on the home. before reading this article i was so scared that i think im loosing money but now that i know i feel better. Thanks I think i will do this again…..

    • Thanks for commenting Camela,

      I am surprised this happens so often. As seller it is important to know how you are protected and not protected. Some sellers are greedy and lie and will not pay back the original seller who originally sold them the home with money still owed. Thanks for commenting and mentioning how you were scared at first. Glad it worked out for you.

      All the best,

  5. I have a similar situation. I bought a mobile home that didn’t have a title. Instead I was offered a supposed notarized court document that claimed the owner as having owning it. The story I was told was that his bank he financed it from demanded the previous owner to provide a title. He didn’t. so they went to court and got this document. I then bought the home and he gave this document to me and a bill of sale. I try to pay the taxes and this is where it gets crazy. They tell me I cant because of I don’t own it and they cant find the title. I am told I have to do a assurity bond, which I do, then today they tell me they find the title in the system and that it has a lien. Now that I have to have the company that has the lien to turn loose of the lien. This bank is in New York and was wrote in 91. I live in Ga. I just spent 8 months and 15000 grand remodeling this home. Not to mention the bond wasn’t cheap.

  6. i have a question if your moblie home is mortgaged do you keep the title or does the mortgage company keep it until its paided off and if they didnt take it and you have the title how is that possible to have the title if mortgaged?

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