- February 01, 1993
- All Issuing Agents
- Manufactured Housing
There has been a recent increase in the sale of manufactured housing which is perhaps attributable to the growing problem of affordable housing in New Hampshire. Prior to August 17, 1983, mobile homes were motor vehicles subject to the title laws. The typical instruments used to secure a loan on the homes were Uniform Commercial Code financing statement which were filed in the town where the mobile home was located and at the Office of Secretary of State.
Effective August 17, 1983, the New Hampshire legislature redefined mobile homes to be manufactured housing and defined manufactured housing as real estate. Manufactured housing is defined in the statute as any transportable structure built on a permanent chassis with a dimension of 8 or more feet in width, 40 or more feet in length or 320 or more square feet in area. NH Rev. Stat. Ann. Sec 831.11.
Although the changes basically arose s a revenue measure, the real estate lending and legal communities have encountered some difficulties due to the more far reaching aspects of the classification of mobile homes as real estate.
TAXES - The manufactured housing is subject to the state's property transfer tax with one major exception. If the sale is an initial sale by a dealer, the housing does not become real estate until placed on a site and tied to utilities. Thus, in nearly all cases of the sale of new manufactured housing, no transfer tax is due. NH Rev. Stat. Ann. Sec. 78-B:IV (a).
Manufactured housing located in a community as of April 1, is subject to local property taxes. Liability is also extended to property brought in after April 1, but before the following January 1, if it remains for more than ten weeks. Rev. Stat. Ann. Sec. 72:7-a-I et seq. If manufactured housing is being relocated, the law requires a receipted tax bill be produced to the person relocating the housing. NH Rev. Stat. Ann 800? 2-A. This requirement minimizes, at least in theory, the chances of someone selling and removing the housing to another location still subject to a real estate tax lien.
DEED - Since manufactured housing is real estate, a deed is needed to transfer ownership. A standard form for the conveyance of manufactured housing is set forth in the statute. If the housing is to be situated on leased land, the owner of the land must consent to the transfer. The deed should contain the manufactured, model type and serial number of the housing, a description of where it is located and a listing of any encumbrances, exceptions or reservations which apply. NH Rev. Stat. Ann. Sec. 447:44.
If the manufactured housing is to be situated on land owned by the buyers of the home, it is generally recommended that they obtain a separate deed for the manufactured housing and the land. The separate deed establishes a clear chain of title in the event of future sales or loans on the manufactured housing. A single deed, for both the land and the manufactured housing, is not defective, however, as long as the model, manufacturer and serial number are included in the deed.
A few lenders assumed additional risk after the statutory change with the continuing use of Uniform Commercial Code financing statements, not realizing the UCC's contain no waiver or release of the marital homestead interest or statutory power of sale to enable a foreclosure sale of the property.
The confusion over the statutory changes has improved due to the passage of nearly five years since the legislation. The primary problems arise in establishing a chain of title for the housing sold prior to August 17, 1983 and in locating liens and encumbrances in the years preceding and immediately following the change. The continuing problems is that many private parties are uneducated in the current requirements for taxation and conveyancing of manufactured housing under the 1983 legislation.
TITLE INSURANCE - Title Insurance is available to protect the lender whether the housing is on leased or owned land. The endorsement to the title policy (ALTA Form 7) insures that the manufactured housing is within the meaning of the term "land" when used in the policy. In addition, all the usual title insurance protection is extended including the guaranty of priority of a lender's lien on the manufactured housing.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.