Underwriting Manual: Mobile And Manufactured Homes

The term "Land" is defined in the Conditions section of the ALTA title insurance policies as follows:

n.  "Land”: The land described in Item 5 of Schedule A and improvements located on that land at the Date of Policy that by State law constitute real property. The term “Land” does not include any property beyond that described in Schedule A, nor any right, title, interest, estate, or easement in any abutting street, road, avenue, alley, lane, right-of-way, body of water, or waterway, but does not modify or limit the extent that a right of access to and from the Land is insured by this policy.

In certain cases, the determination as to whether a house or dwelling unit located on the land constitutes real property may not be an easy task. Nowadays, houses or dwelling units can be built totally on the land (on-site construction), or they can be built wholly on a different location (out-site construction.) Occasionally, the two methods of construction are combined (component housing.)

While those houses or dwelling units that are totally built on the land present no problem in qualifying as real property, those completely built outside the land do present some serious difficulties in order to have them divested of their condition of personal property and have them qualified as part of the land.

In addition to complying with specific provision established by state law, verify the following matters prior to insuring that a mobile home or any other kind of manufactured housing unit is an integral part of the land:

• Same party owns of both the land and the mobile home or similar housing unit (see the title registration, bill of sale, or certificate of sale).
• Manifest intent to dedicate the mobile home or similar housing unit for the exclusive purpose of a permanently located dwelling area.
• Cancellation of the motor vehicle registration of the mobile home or similar housing unit.
• Mobile home or similar housing unit is taxed in conjunction with the land as a single parcel of real property.
• Completion of permanent affixation of the mobile home or similar housing unit to land. This affixation entails:
  
  
  • Removal of the axles and wheels.
  • Setting on a permanent foundation.
  • Connection to sewer system and public utilities.
  • Compliance with any other statutory requirements.
  
  
• Cancellation of any lien, security interest, or encumbrance that is shown in the title registration, or bill of sale, or certificate of sale.
• Complete a U.C.C. filing search, that meets statutory requirements.
• Compliance applicable U.C.C. state law that covers an out-of-state purchase of a mobile home or similar housing unit.
• If the mobile home or similar housing unit is affected by any of the matters listed below, show as exceptions in commitment and title policy:
  
  
  • Any security interest, lien or, encumbrance that affects mobile home or similar unit and appears in the title registration, bill of sale, or certificate of sale.
  • Any security interest revealed by the U.C.C. filing search.
  • Any personal property or motor vehicle taxes assessed against the mobile unit or similar housing units.
  • That any mortgage being insured contain the following clause:

The real property described in this mortgage includes as an improvement to the land set forth herein a (mobile home) (description of any other similar housing unit) permanently affixed to such land.

After your examination and above compliance you may issue the ALTA endorsement 7.

Exception: The Land shall not be deemed to include any house trailer, mobile home or mobile dwelling.