Manufactured Homes
A Legal Moment

Some Laws Regarding Manufactured Homes

   Identifying Whether the Home is "Mobile" or "Modular" is Just the First Step in Understanding What the Law Requires.

   Manufactured homes present unique challenges in a variety of legal contexts such as transfers of ownership, treatment under restrictive covenants, zoning, and disposal.  This article will highlight some of the general rules in each of these areas.

   First, it is important to understand a couple of definitions related to manufactured homes.  Manufactured homes can either be mobile homes or modular homes.
   "Mobile homes" are what people traditionally call trailers.  To identify them with legal specificity, a mobile home is any housing constructed and labeled to indicate compliance with the HUD-administered National Manufactured Housing Construction and Safety Standards Act of 1974.  Each home constructed to this standard must have a HUD data plate permanently attached near the main electrical panel.  This can be critical to finding the serial number that identifies the home, but often this “permanent” data plate is missing.  In that case, the serial number can be located by crawling under the home and viewing the front cross-member where it must be stamped into the metal.
   "Modular homes" are what people usually think of as homes assembled in sections that, when completed, result in a home that looks like a traditional stick-built home; technically, they are defined as homes constructed and labeled indicating compliance with the North Carolina State Building Code, Volume VII—Residential.
   The key factor in identifying whether a home is modular is whether a building permit was issued prior to its installation.
   For this article, I will be using the terms “mobile home” for HUD homes, and “modular homes” for manufactured homes assembled under a traditional building permit.
Transferring Ownership of Mobile Homes
   The critical factor in transferring ownership of a mobile home is whether the home is titled as a vehicle or as real estate.  If the home is brand new, it will have a certificate of origin for the initial transfer.  The home can be sold as a motor vehicle in which case the Division of Motor Vehicles (“DMV”) will issue a certificate of title to the new owner and the home will remain titled just like a car.  Alternatively, the home can immediately be permanently affixed to real estate and become part of the real estate.  This act is accomplished by completing and filing in the Register of Deeds a document titled, “Declaration of Intent to Affix Manufactured Home to Real Property.”  Note that a current owner can cancel a DMV title at any time and convert the mobile home to real estate.
   For subsequent sales, the current owner may very well be aware of whether the home is characterized as a vehicle or as real estate.  In the case of the former, the owner will most likely produce the DMV title; in the case of the latter, the owner will produce the previously recorded Declaration of Intent converting the mobile home to real estate.
   If the home has a DMV title, that title is signed over just like in the sale of a car.  If the mobile home has been converted to real estate, the home is conveyed with the deed that transfers the real property. 
   However, there are also many times when a mobile home is titled through DMV as a vehicle, but the owner does not have the title or even realize that it is titled as a vehicle.  The misconception is compounded by the fact that the county is already taxing the mobile home as real estate even though it is still personal property.  Title searching, and inquiring of DMV, can frequently clarify the ownership status.  Depending on the results, there are a host of actions that may be necessary to properly convey the mobile home.  These can range from simply filing a Declaration of Intent, to requesting a replacement title, to creating a new title by applying to DMV and posting a bond for the appraised value of the home.  The action will be specific to each situation.
Manufactured Homes Under Restrictive Covenants
   Many neighborhoods with restrictive covenants have rules banning manufactured homes.  The rules are often not clearly written and lead to disputes between the owners’ association and an owner wishing to place either a mobile home or a modular home.  The clearest way to resolve these disputes is to have well-drafted rules -- either from the outset or by amending current restrictions with clear rules.
    Defining manufactured homes using the definitions adopted in this article goes a long way to eliminating disputes because there is no argument over whether a home is “manufactured” or is a “trailer.”  Instead, the determination turns simply on whether the home is HUD-labeled or received a building permit.  Those are objective facts that cannot be disputed.  If HUD-labeled homes are banned, one merely needs to check to see if the home in question has a HUD label to decide if it will be allowed or not.
   Without clear definitions, the courts have provided a number of factors to consider in light of ambiguous restrictions.  In the leading case, the covenants banned “structures of a temporary character [and] trailers.”  One lot owner in the subdivision began to install a modular home under the definitions of this article and several neighbors sued claiming it was a “trailer.”  The court analyzed whether the home at issue: (1) had to comply with the building code, (2) was attached to a permanent foundation, (3) could be easily moved in the future, (4) had a DMV title, and (5) was delivered intact or assembled.  The court ruled the modular home was not a trailer under the covenants before it.
   Mobile homes get treated differently than other dwellings under zoning codes.
   In the City of Asheville, in general, mobile homes are permitted only through a special application procedure to amend the zoning map of Asheville.  The available areas are those that meet all of the following criteria: (1) the area already contains mobile homes comprising at least twenty percent of the housing in the area, (2) the area exceeds five acres, and (3) the area has vacant land for the installation of new mobile homes.  In addition, there are numerous design and appearance requirements for each home installed.
   In Buncombe County, mobile homes are more generally allowed.  Individual mobile homes are permitted by right in the R-LD (low density), the R-3, the EMP (employment), and the OU (open use) districts.
   Disposal of old or abandoned mobile homes often presents a challenge to property owners.  Buncombe County has a program to assist in this process by paying for the disposal provided certain conditions are met as follows: (1) the owner must have clear ownership of the mobile home and the land where it is located, (2) the applicant is not applying for a mobile home park, (3) the owner will not sell or develop the property for twelve months after removal, and (4) the owner will maintain the property following removal


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Greg Gregory is an attorney and shareholder at Marshall, Roth & Gregory, PC. Greg's practice encompasses all forms of business and real estate transactions.
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