Manufactured Homes Guidelines

• Guidelines

  BCFSA’s Guidelines provide a practical application of the information and give suggested best practice guidance to assist real estate professionals. These guidelines provide BCFSA’s interpretation of RESA and all other applicable legislation.

  In addition, BCFSA’s Guidelines may be a useful information source for the general public looking for information about standards of conduct for real estate professionals.

Purpose

The purpose of this guideline is to help you understand the regulatory framework which regulates manufactured homes in B.C. It outlines the governing requirements for the purchase and sale of manufactured homes and ensures you know that facilitating this type of transactions requires specialized expertise.

Should you be listing a manufactured home, you must ensure that all requirements have been met before you list it, or before you work with a buyer to purchase it.

You must always provide reasonable care and skill in the execution of your duties and provide competent service. This may include asking a seller if their home is a manufactured home when you are not sure because many manufactured homes are built to look like traditionally built homes.

Information on mandatory electrical inspections and labels can be found in the Electrical Safety Regulations which are part of the Safety Standards Act that are enforced in B.C. by Technical Safety BC. and, in some instances, the municipality the manufactured home is located in. A list of municipalities that are delegated portions of the Safety Standards Act to issue electrical permits and perform assessments is located on Technical Safety BC’s website.

Remember that manufactured homes can include prefabricated homes, tiny homes, and homes on wheels such as mobile homes. Many different types of land ownership can be connected to a manufactured home transaction. Please read the Land Ownership Guideline for more information.

1. Verify that the manufactured home is eligible for sale in B.C.;
2. Verify that a manufactured home does not require registration under the Manufactured Home Act;
3. Understand and confirm assignment and pad rental on leased pads.

Guidelines

Verify that the Manufactured Home is Eligible for Sale in B.C.

At the outset of your agency relationship with a seller it is important to ask questions about the possibility that a home is manufactured. If your client indicates that the property is a manufactured home, or if, through your due diligence, you determine the property to be a manufactured home, you must take a number of steps to determine if the manufactured home can be listed for sale. Some of the questions you may need to get answers to include:

• Is there a CSA sticker or other approval mark in the home?
• Is there a Manufactured Home Registry (“MHR”) sticker?
• Have there been alterations?
  • If alterations to wiring were done under permit, the original CSA sticker is valid;
  • If alterations were done without a permit, the home must be inspected by a licensed electrical contractor.

In some instances, your client may have the appropriate electrical certification sticker and have the home registered with the Manufactured Home Registry. You still must confirm that no alterations to the electrical wiring has been done without permit since the original certification was granted. Alterations without permit would render the certification invalid and a new inspection would be required.

Sometimes consumers may be unaware that their manufactured home is not compliant with provincial legislation and sometimes they are aware but wish to proceed with the transaction. If your client is unwilling to bring their manufactured home into compliance with the Manufactured Home Act and Safety Standards Act, the manufactured home cannot be listed for sale or sold.

If you are unfamiliar with how to determine if a manufactured home complies with these pieces of legislation, the Real Estate Services Rules (“Rules”) state that you must not act outside your area of expertise. Doing so can put your client at risk.

Verify if the Manufactured Home Does not Require Registration Under the Manufactured Home Act

When manufactured homes are sold with land, often they will not be registered at the mobile home registry. This will either be because the manufactured home owner has applied for it to be deregistered, or it was built with the intention of assembling it on the homeowner’s land in which case the home would not require registration under the Manufactured Home Act (this does not exempt the mobile home from the requirements under the Manufactured Home Act).

If the manufactured home is not registered with the Manufactured Home Registry (“MHR”), it may be difficult for you to ascertain whether the home is actually a manufactured home. You should start by looking at the BC Assessment roll report which, in the legal description, should indicate a MHR number, specifically if the owner used the status of the manufactured home to qualify for a CMHC-insured mortgage of the land and premises. The MHR number is numeric and will not contain any letters.

You must also be aware of “dummy numbers” issued by BC Assessment when they are assessing properties and observe a manufactured home on the land that do not have a MHR number. These dummy numbers are indicated by an alphanumeric entry beginning with an A, B or Z, and do not mean that the manufactured home has been de-registered. They are, however, are a good indication that the manufactured home was likely built prior to April 1, 1978 and has remained on the property since then. As such, the manufactured home has likely never been registered with the Manufactured Home Registry and may not meet CSA standards.

For more information on the Manufactured Home Registry please click here.

Understand and Confirm Assignment and Pad Rental on Leased Pads

Real estate professionals involved in the sale of manufactured homes on leased or rented land belonging to a third party must take a number of precautions at the time of taking the listing and when writing the Contract of Purchase and Sale. If you are creating a custom contract, you must ensure it is reviewed by your managing broker and a lawyer to ensure that it protects your client and is legally enforceable.

To protect your client, you should do a title search on the land containing the rental pad to ascertain ownership and the presence of any head leases or options which could have an impact on future rents. The sale of the park may compromise rental agreements that are not properly in force. Provision for future escalation in rents or lease payments between the landowner and tenant may come as a surprise to inadequately informed tenants.

If the buyer wants to keep the home in the park and continue to rent the site that it sits on, the tenancy agreement for the site (or pad) should be assigned to the buyer. Assigning the tenancy agreement ensures the rent and the schedule of rent increases remains the same for the new tenant.

If for some reason the assignment cannot take place, or the pad rental is not assigned properly, the buyer may face significant rent increases that could make the home unaffordable. Without an assignment, a buyer would need to agree to a new tenancy agreement with the landlord. This can result in an increase in the rent payable, and there is no restriction to how much that increase may be.

Relevant Cases

Case #1: Invalid B.C. Electrical Safety Number on Listing

The real estate professional provided an invalid B.C. electrical safety number, which was similar to the property’s manufactured home registration number, in the listing information for the property.

The real estate professional stated that he observed a sticker on the outside of the electrical panel of the manufactured home which looked like one of the many acceptable stickers on a document put out by the safety authority, and which the real estate professional believed was the electrical number required to list the home for sale. In fact, that number was the manufactured home registration number.

Contravention: Section [Duty to act honestly and with reasonable care and skill] of the Real Estate Service Rules

Read the full case

Case #2: Real Estate Professional Providing Services through Unlicensed Salespeople

The real estate professional had a partnership with an unlicensed company that was in the business of listing and selling manufactured homes. An unlicensed individual at the company would obtain a listing, complete a listing agreement with the seller for the real estate professional, and market the property. When the unlicensed individual had a buyer, he would prepare a contract of purchase and sale as a limited dual agent and process the transaction through the real estate professional’s brokerage.

Listing and selling manufactured homes are activities which of themselves do not require licensing under the Real Estate Services Act or an exemption from licensing, unless there is a component of real estate involved, such as a leased pad. However, unlicensed salespeople at the company were making representations about the real estate on which the manufactured homes were located and as such, were engaging in trading services for which a license was required.

Contravention: Sections [Duty to act in the best interests of client] and [Payment to unlicensed persons prohibited] of the Real Estate Services Rules.

Read the full case

Case #3: Failure to Provide for Pad Rental and Pad Assignment and Failure to Refer to Rules of Mobile Home Park in Contract

When drafting the contract of purchase and sale, the real estate professional failed to provide for pad rental and pad assignment, and failed to refer to the rules of the mobile home park, among other things.

Contraventions: Sections [duty to act in best interests of client] and [Duty to act honestly and with reasonable care and skill] of the Real Estate Services Rules, among other provisions

Read the full case

Managing Broker Considerations

As a managing broker, you should be aware that the sale of manufactured homes requires added due diligence that does not exist with traditionally constructed properties. Technical Safety BC, along with some municipal governments are responsible for enforcing compliance when it comes to the right of a property owner to sell a manufactured home.

It is important that your real estate professionals know the requirements around electrical inspections and certifications, as well as required manufactured home registration before a manufactured home can be sold. Consideration must also be given to manufactured homes where the pad is either rented or leased. A failure to ensure that a home can be legally sold could result in a finding of professional misconduct and could subject your real estate professional to possible sanction.

You and your real estate professionals should be familiar with the following organizations and legislation:

1. BC Assessment;
2. Manufactured Home Registry;
3. Manufactured Home Act and Manufactured Home Regulation;
4. Manufactured Home Park Tenancy Act and Manufactured Home Park Tenancy Regulation;
5. Standards Safety Act and Electrical Safety Regulation;
6. Technical Safety BC.

A robust policies and procedures manual will help ensure that your real estate professionals know what is expected of them in relation to manufactured homes. Your real estate professionals must also remember that if they are unfamiliar with the requirements associated with manufactured homes sales, trading outside their area of expertise could put them and their clients at risk.

Applicable Section of RESA/Real Estate Services Regulation/Real Estate Services Rules

• Section 30, Real Estate Services Rules, Duties to clients
• Section 33, Real Estate Services Rules, Duty to act honestly
• Section 34, Real Estate Services Rules, Duty to act with reasonable care and skill
• Section 35, Real Estate Services Act, Professional Misconduct

Definitions

Manufactured home: means any structure, whether ordinarily equipped with wheels or not, that is designed, constructed or manufactured to provide residential accommodation and to be moved from one place to another by being towed or carried

Professional misconduct: in relation to a real estate professional or former real estate professional, means professional misconduct within the meaning of section 35 (1) [misconduct by licensee]

A real estate professional commits professional misconduct if the real estate professional does one or more of the following:

1. contravenes this Act, the regulations or the Real Estate Services Rules;
2. breaches a restriction or condition of their licence;
3. does anything that constitutes wrongful taking or deceptive dealing;
4. demonstrates incompetence in performing any activity for which a licence is required;
5. fails or refuses to cooperate with an investigation under section 37
6. fails to comply with an order of the real estate council, a discipline committee or the superintendent
7. makes or allows to be made any false or misleading statement in a document that is required or authorized to be produced or submitted under RESA

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