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Manufactured Home Closings

By William M. Burstein & Owen F. Mangan

Chapter 322 of the Laws of 1993 radically changed the way in which a lien on a new mobile or manufactured home must be perfected.

The statute defines "mobile home" or "manufactured home" interchangeably, as a "structure, transportable in one or more sections...built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation..."

The law applies to all mobile or manufactured homes except those manufactured prior to July 1, 1994 and designated by the manufacturer as being a 1994 or earlier model, as well as any manufactured prior to January 1, 1994 for which the manufacturer has not designated a model year. With respect to such homes, the law provides that the method set forth in Article 46 of the Vehicle and Traffic Law (the Uniform Vehicle Certificate of Title Act) for perfecting and giving notice of security interests is exclusive. In other words, a security interest in a mobile or manufactured home must be perfected in the same manner as a security interest in a motor vehicle. No matter how long the mobile home has been affixed to realty, it is forever subject to this requirement.

Heretofore, when dealing with a mobile or manufactured home we have made a distinction based upon whether the home was permanently affixed to the land on which it sat. It was never entirely clear just what constituted "permanent" and what did not; but certainly a structure without wheels which was bolted to a poured concrete foundation was at one end of the spectrum, and a structure with wheels, perched on a slab with a skirting around the undercarriage, was at the other.

Here is an example of the danger inherent in insuring title with a manufactured home:

The Albany office of Chicago Title insured a mortgage on a parcel of land improved by a mobile home. At the closing, an affidavit was obtained that the home was permanently affixed to real property. It turned out, however, that the owner of the land who had had an inadequate credit rating to obtain financing for the mobile home, had his girlfriend purchase the home in her name. The lender filed a UCC-1 in the County Clerk's Office naming her as the debtor. Later, the owner of the land applied for a mortgage, and Chicago Title did its customary title search. Because the indices at that County Clerk's Office are set up alphabetically by name of owner rather than by section, block and lot, the UCC-1 against the girlfriend was not turned out. Subsequently, when the mobile home lender commenced an enforcement action, it claimed lien priority over the insured mortgage lender.

From now on, when a new mobile or manufactured home is sold, the dealer or purchaser will file with the Department of Motor Vehicles a statement of origin, an MV-82 vehicle title application, proof of payment of sales tax, and an MV-900 notice of lien, if applicable. The Department of Motor Vehicles then issues a certificate of title (not to be confused with "our" title certificate or title report), endorsed if appropriate with the name of the lienholder. Although this process feels strange to us as real estate practitioners, the result is that when we are presented with a certificate of title to a mobile or manufactured home we will have reliable evidence of its ownership - and a search in the Department of Motor Vehicles against the home, by manufacturer and serial number, will turn out any and all liens against the home.

Additional steps need to be taken when insuring an enforceable lien on the premises improved with a "mobile" or manufactured home that is produced after July 1, 1994. When you open a title application, you should be on the lookout for the following types of terms if used in correspondence or phone conversation giving the particulars to prepare your certificate of title:
"This is a manufactured home."
"This is a mobile home."
"This is a modular style home."
"We need the loan proceeds for the driver when he delivers the home from the factory"
This kind of information will alert you that the following steps need to be taken to perfect the lender's lien along with the usual steps taken to examine the real estate title:

Arrange to have:

The completed MV-82 (Vehicle Registration/Title Application) signed on the back by the purchaser.
The MSO (Manufacturer's Statement of Origin) or MCO (Manufacturer's Certificate of Origin) assigned on the back to the purchaser. The MSO or MCO must include the model year, make, serial number, width and length of the manufactured home.
Proof of Sales Tax Payment. A certification signed by the manufactured home dealer which includes their NYS sales tax identification number and which states that all New York State and Local taxes have been collected from the purchaser.
The MV-900 (Notice of Lien) to record the lien. A $5.00 lien filing fee is also required. The fee can be paid by check or money order, payable to the Commissioner of Motor Vehicles. This filing fee cannot be paid by the purchaser/borrower. The $5.00 fee must consequently be paid by our insured, the lienholder.
The Twenty-Five Dollar ($25.00) title application fee for a manufactured home. Payment can be made by check or money order, payable to the Commissioner of Motor Vehicles.

The Department of Motor Vehicles has set up a Title Bureau in Albany where the application, other paperwork and fees are to be sent directly. Their address and phone number are: Title Bureau, NYS Department of Motor Vehicles, Empire State Plaza, Albany, New York, 12228-0330, (518)486-4714. You cannot process this paperwork through your local bureau of motor vehicles where you normally register your automobile. In fact, the mobile or manufactured home we are dealing with is not registered like your automobile. The Department of Motor Vehicles office in Albany is being used merely because the legislature thought it was better equipped to handle the paperwork. Due to space constraints, we have not shown you examples of the above forms but we will be happy to mail or fax a set upon request.

A footnote: If you do not file the "Notice of Lien" as described above, the insured lender will have an unenforceable lien against the mobile or manufactured home, no matter how securely it is bolted or cemented to the land.

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