Mobile or Modular?

By James L. Goldsmith, Esquire

Mobile or modular, what is the difference?  This article is not intended to define the two types of structures or to educate how they are distinguished.  In less than one minute an internet search can provide such information, which you should review.  But if you plan to dabble in these markets, forget about “should” and think “must.”

I could regale you with horror stories involving the misidentification of these homes.  Most that I am familiar with involve lawsuits against sellers, appraisers, home inspectors and real estate salespersons where a lower cost mobile home, also known as a trailer, or “manufactured home,” was misidentified as a permanent modular home.  They typically involve claims seeking payment for diminished value.  The bright note is that most mobile homes and modular units are low ticket items and damages are relatively small, say under $70,000.  Sound small?

What is evident is that too many licensees are not able to recognize issues involving mobile and modular units.  While you don’t have to be an expert on the subject, you must have sufficient knowledge to raise certain questions for the unit to be properly identified and loss avoided.  The results of an internet search may help you better understand the differences, so I will avoid the temptation of broaching that subject here.  I would rather discuss what the articles will not tell you.

First, don’t believe the seller.  I have been involved in suits where the seller identified the property as a modular unit rather than a double-wide or mobile.  The seller would have passed a lie detector test, because he truly believed what he represented.  And who was the source of the seller’s information?  His source was the previous seller.  Guess what, that seller had it wrong, too.  Misinformation had been handed down from seller to buyer, and so on.

Second, don’t believe the tax assessment office or the municipality.  I have been involved in cases where not only the seller but also the local assessment office and municipality were mistaken as to the nature of the home.  If the house appears that it may be either a mobile or modular unit, assume that it is a mobile home until you prove otherwise.  The absence of a placard or plate does not mean that the home is modular and not mobile/manufactured.  Nor does the fact that the property comes without a title (yes, a vehicle title) mean that the property is modular and not mobile/manufactured.

Third, don’t expect the appraiser or home inspector to identify the type of unit.  By the time the appraisal is performed, it is rather late anyway.  Regardless, the property should be identified before the buyer commits to its purchase or, at the latest, during the home inspection process.  During the home inspection period, a buyer may engage the services of a mobile home lot owner or salesperson.  These persons are licensed and can better assist in making the proper identification.  If you rely on a home inspector to note the distinction, make sure that the home inspector has the authority to do so. Your request should be in writing so that any misidentification cannot be wiped away by an inspector claiming that it fell outside of the scope of his investigation.  Keep in mind, too, that home inspectors use contracts that limit their liability for errors.

You will note that I have said nothing about how to distinguish a mobile home from a modular unit.  I don’t think that is your obligation.  Your obligation is to recognize issues and understand the importance of not relying upon unverified information.