Lot rent or Home Owners Association?
Which one is right, which one is wrong, and what does this all mean when looking to buy a mobile home located on leased land within the greater Sarasota Florida area?
When looking at buying a mobile home in the greater Sarasota Florida area one has to first decide on whether or not they want to own the land the home sits on or rent the land and buy the home within the mobile home park.
In the state of Florida, when one buys a mobile home and leases the land that it is located on this is viewed and taxed as personal property and not real property. The purchase process of this type of home attaches a title with the home purchase and not a deed and is thus the same transaction type as buying a vehicle.
Here, the title will need to be transferred from the Seller to the Buyer and registered with the state.
When purchasing this type of property lot rent is the payment made each and every month to the mobile home park. This lot rent payment may include several different services such as the residents’ water bill, sewer bill, trash bill, lawn care, and usage and upkeep of all the park amenities such as the pool and walking trails.
If a Buyer is looking to buy a mobile home where they own the home and the land that is attached to the home then this will be viewed as real estate as there is a purchase of land that is included in the sale of the home.
This purchase has a land deed attached to the ownership of the property and is transferred to the new Buyer at the time of sale.
Here, in this purchase, the mobile home with land attached to it will have an HOA payment attached to the property. This HOA payment will usually cover the upkeep of the community such as the streets, common areas, and amenity services but will usually not cover the services attached to the actual unit itself such as the water, sewer, or trash bills.
What is HOA?
Home Owners Association (HOA) is an organization in a subdivision, housing community, or condominium that creates and enforces the rules for properties and their residents. Those who buy properties within the jurisdiction of an HOA automatically become members and are obligated to pay the association’s dues, according to Investopedia.
According to the Home Owners Association in the United States, as of 2020, there were around 370,000 HOAs in the United States and more than a quarter of the American population lived in community associations.
When you buy a property, be aware of the membership of the HOA of the community which is generally a requirement to buy a house, depending on the neighborhood where you want to live. There are associations of single-family housing or condominiums of multiple units. HOAs are created to develop a series of rules that must be followed by all residents in a particular housing community.
Being inside an HOA community has the advantage of preserving and improving property standards since they require that the appearance of the neighborhood is uniform, and concerned about cleaning, maintenance, and repair.
Many HOAs provide comforts such as a pool, clubhouse, or tennis courts. They also often handle routine issues such as landscaping and garbage collection and some maintenance works, usually external repairs such as ceilings and snow removal, according to Fox Business.
However, not everything is honey on flakes. HOA has some disadvantages that keep people away from it. On many occasions, HOA dues and payments are not voluntary and can be expensive.
In the same way, depending on the association, there are some regulations that could be considered very restrictive: for example, not having pets.
Keep in mind that HOAs are organizations that could be considered small political groups for the benefit of their community, but can be prone to corruption and have inefficient operations or lack of leadership and management that could cause more damage than benefits.
It would seem that the majority of people who have had experiences with HOAs have encountered some kind of problem. In some instances, these problems are so bad that the people affected by them vehemently loathe any HOA.
Now, in theory, HOAs are a good idea, but the execution of their operations and power most often leaves much to be desired.
Many people don’t want to buy a house or a mobile home from an HOA-controlled community because of many reasons including but not limited to the following
- Paying for amenities that you do not use.
- Some HOAs have the power to foreclose your home
- Lack of freedom in your own home (ie. colors, guests, home improvements, etc)
- Restrictions in your own yard like fencing, lawn care, vehicles, plants, etc.
- HOA can limit how many pets you own
- You can rent out your home
- You can be liable for the previous owner’s unpaid fees
When looking at buying a mobile home in Sarasota Florida it is important to realize that lot rent and HOA payments are not the same and that the difference between the two largely depends on who owns the land the home resides on.
Mobile home park lot rent and Homeowners Association (HOA) fees can be confusing for potential homeowners. The main difference between the two is that park lot rent is used to pay for the land that a mobile or manufactured home is situated on, while HOA fees are used to pay for the upkeep of common amenities in a residential complex.
Park lot rent typically covers costs associated with the park, such as taxes and infrastructure maintenance. It is usually paid monthly or annually and can range from a few hundred to several thousand dollars each year. It’s important to know that park lot rent can increase over time, which should be taken into account when budgeting for a new home.
HOA fees are used to maintain amenities such as swimming pools, playgrounds, and parks in residential complexes. They are usually paid monthly or quarterly and usually range from a few hundred to a few thousand dollars per year depending on the amenities included. Unlike park lot rent, HOA fees are generally fixed and will not increase over time.
In conclusion, park lot rent is used for the actual land a mobile or manufactured home is situated on, while HOA fees maintain common amenities in residential complexes. Park lot rent can increase over time, while HOA fees are generally fixed.
This is Mark Kaiser with The Mobile Home Dealer and we help mobile home Buyers and Sellers get to a better place in life.