We continue to experience a steady volume of title insurance claims in connection with the issuance of both owner’s and loan policies insuring real property improved by manufactured housing. Despite the fact that in 1994 New York State amended the Banking Law, Personal Property Law and Vehicle and Traffic Law to define all manufactured housing built after July 1, 1994 as “motor vehicles”, our title policies involving manufactured housing are still being incorrectly issued without completion of the necessary filing of both owner and loan documentation with the Department of Motor Vehicles. A two-step process which includes both (1) the recording of a deed and/or mortgage at the county clerk’s office AND (2) the simultaneous filing of a seller executed Certificate of Title, Buyer Application for Title and Lender / Borrower Notice of Lien at the New York State Department of Motor Vehicles is required in every transaction which involves manufactured housing.
- PRE-JULY 1, 1994 MANUFACTURED HOUSING -
Manufactured Housing units manufactured prior to July 1, 1994 are treated as fixtures on real property with title to the real property passing by deed and ownership of any manufactured housing unit permanently affixed to the land passing by a bill of sale from the seller to buyer. In connection with pre-July 1, 1994 manufactured housing, the seller is required to execute an affidavit of affixation verifying that the wheels and axles have been removed from the manufactured housing unit and that the unit is permanently affixed to a foundation as a fixture on the real property. Based upon the recording of a deed for real property and delivery of the bill of sale for the pre-7/1/94 manufactured housing together with an affidavit of affixation, title insurers will insure the ownership of both real property as well as the pre-7/1/94 manufactured housing unit located thereon. Thereafter, loans secured with the real property and pre-7/1/94 manufactured unit located thereon may be secured with a recorded mortgage on the real property and filed UCC documentation in connection with the pre-7/1/94 manufactured housing unit located on that real property.
- POST JULY 1, 1994 MANUFACTURED HOUSING -
Effective July 1, 1994, manufactured housing units are treated as motor vehicles under amendments to the New York Banking, Personal Property and Vehicle and Traffic Laws under which manufactured housing is defined as “. . . a structure, transportable in one or more sections, which in the traveling mode, is 8 body feet or more in width or 40 body feet or more in length, or when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to required utilities, and includes the plumbing, heating, air conditioning and electrical system contained therein.” Attached hereto is a brief 2 page summary of the key MANUFACTURED HOUSING STATUTORY PROVISIONS under current New York State Law. Also attached is a copy of the New York State Department of Motor Vehicles booklet entitled “What Lender’s Should Know About The New York State Vehicle, Boat and Manufactured Home Title Program” (23 pages).
Each manufactured housing unit manufactured after July 1, 1994 is issued a Certificate of Origin by its manufacturer which sets forth the manufactured housing unit’s make, color, size and manufacture year as well as the HUD Serial Number now required for every manufactured housing unit. In order to obtain the initial Department of Motor Vehicles (DMV) Certificate of Title for a post 7/1/94 manufactured housing unit, a Manufacturer’s Certificate of Origin together with an Application for Title (Form MV-82TON) must be filed with the New York State Department of Motor Vehicles (DMV). A new Certificate of Title (Form MV-999) is then issued by DMV. If a lien is to be placed upon the new manufactured housing unit, a Notice of Lien (Form MV-900) signed by the new unit owner and new lienholder must accompany the Certificate of Origin and Application for Title filed with the DMV. Upon processing by the DMV, a Notice of Recorded Lien (Form MV- 901) is issued to the lender who is the new lienholder on the manufactured housing and the identity of the lienholder is printed on the newly issued Certificate of title (Form MV-999). The Notice of Recorded Lien thereafter is utilized to provide notice to the DMV when a lien against a manufactured housing unit is paid in full by noting that payment where provided on the form and filing it with DMV.
In order to transfer ownership to a manufactured housing unit after the Department of Motor Vehicles has previously issued a Certificate of Title (Form MV-999), the seller and buyer both must complete and sign the back of the existing Certificate of Title, and a new Application for Title (Form MV-82TON) is filed and any existing lienholder noted on the existing Certificate of Title must be notified and paid in full. A new Notice of Lien (Form MV-900) signed by the purchaser of the manufactured housing and any new lienholder must be submitted to the DMV. A new Certificate of Title (Form MV-999) is then issued to the new owner with the new lienholder noted thereon and a new Notice of Recorded Lien (Form MV-901) is delivered to the new lienholder. All of these procedures and forms are set forth in full in the attached DMV booklet.
In the event that a manufactured housing unit is repossessed by a lienholder, an Affirmation of Repossession and Bill of Sale (Form MV-950) must be completed by all required parties. A Notice of Repossession of Motor Vehicle or Motorcycle (Form MV-327) verifying: (1) notification of the repossession has been delivered in person to the police agency in the locality where the repossession occurred, (2) notification of repossession has been delivered to a New York Motor Vehicle Issuing Office and, (3) notification of repossession has been delivered (within 24 hours) to the manufactured housing unit owner, must be also completed and submitted to DMV.
A mortgage must be recorded in the county clerk’s office in connection with any real property owned by a borrower in order to secure a mortgage loan on that real property when it has been improved with a manufactured housing unit located on the property in accordance with standard mortgage recording procedures. Any mortgage foreclosure action concerning real property improved by manufactured housing should include a reference to any manufactured housing located on the real property and clearly state that a repossession of the manufactured housing has occurred with a copy of the Notice of Repossession (Form MV-327) included as an exhibit to the foreclosure complaint.
All Stewart Title related entities participating in the issuance of Stewart Title owner and / or loan policies in connection with real property improved with manufactured housing located thereon must verify full compliance with these dual filing requirements at both (1) the county clerk’s office and (2) the New York State Department of Motor Vehicles under the applicable provisions of the Real Property Law as well as the Vehicle and Traffic Law when any post-July 1, 1994 manufactured housing unit intended to be included as security for a mortgage loan being insured by Stewart Title.
If you have any questions please contact Barry Balonek at firstname.lastname@example.org or call 212-922-0050 and speak with any Agency Legal Services counsel.