Chapter 3 of 16
Understanding community requirements
If your home is on a leased lot, your community is a party to your sale, find out how before you list.
2 min read
A community can influence or block your sale in several ways, and you need to know which apply to you before a buyer is standing in your living room. Ask the community management directly and get the answers in writing.
The questions that matter: must the community approve your buyer, and against what criteria? Is there a transfer or resale fee, and who pays it? Does lot rent reset for the incoming owner, and to what? Are there conditions the home must meet before a sale, skirting, roof, exterior condition, anchoring? Is there an age limit for homes remaining on the lot? And can a buyer take over your existing lease, or must they sign a new one on current terms?
The rent reset question deserves particular attention. If a buyer will pay materially more in lot rent than you do, that reduces what they can pay for the home, because they are budgeting a total monthly cost. You need to know the number your buyer will actually face, not the one you currently pay, and you should tell prospective buyers the truth about it.
Some communities also assert a right of first refusal, or will offer to buy the home themselves. That is worth knowing about early. It can be convenient, and it is rarely the highest price available.
Key points
- Get the community's requirements in writing before listing.
- Find out whether lot rent resets for your buyer, and to what figure.
- Ask what condition standards the home must meet before a sale.
- Check whether the community has a right of first refusal.
Watch out
Buyer approval is the clause that most often surprises sellers. If your community screens incoming residents, your buyer pool is smaller than you think and your marketing should reflect it.
Questions to ask
- Must you approve my buyer, and against what criteria?
- Is there a transfer or resale fee, and who pays it?
- What will lot rent be for the incoming owner?
- What condition requirements must the home meet before a sale?
- Can a buyer assume my lease, or must they sign a new one?