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During the time they are located on the sales lots that ADI
leases, model manufactured homes are owned by and titled to ADI.
The independent salespersons, not ADI, are responsible for
local media advertising costs, wages, if any, paid to sales
assistants, sales commissions, sales taxes, and utility fees and
insurance premiums on the sales lot.
As indicated, ADI enters into the sales lot lease agreements
with owners of the real property, and ADI, not the independent
salespersons, makes the lease payments due on these leases.
Also, ADI pays some miscellaneous costs relating to the
model manufactured homes that are placed on the sales lots.
For the majority of its income relating to the purchase and
sale of manufactured homes, ADI receives various incentive
payments from the manufacturers and from lenders (e.g., on each
manufactured home sold ADI might receive a cash incentive payment
from the manufacturer of 10 percent of the total purchase price
paid to the manufacturer). Incentive payments that ADI receives
are referred to in the record as “retail” incentives, and it
appears that these payments represent incentives typically given
by manufacturers and lenders to retail sellers of manufactured
homes.
ADI also receives from the independent salespersons a $300
processing fee for each manufactured home sold.
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Last modified: May 25, 2011