BILL ANALYSIS �
AB 379
Page 1
Date of Hearing: April 3, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 379 (Brown) - As Amended: March 13, 2013
SUBJECT : Manufactured housing: removal.
SUMMARY : Makes technical and clarifying changes to the law
relative to the installation and removal of manufactured
housing. Specifically, this bill :
1)Clarifies that notwithstanding any other law, prior to a
manufactured home, mobilehome, or commercial modular being
deemed a fixture of improvement to real property the
installation must comply with specified procedures and
requirements.
2)Specifies that the enforcement agency must record with the
county recorder within five business days of the issuance of
the certificate of occupancy for a manufactured home,
mobilehome, or commercial modular that has been installed upon
real property a document that includes the name of the owner
of the real property, a description of the real property, and
a statement that the manufactured home, mobilehome, or
commercial coach has been affixed to that real property by
installation on a foundation system.
3)Requires an owner who intends to remove a manufactured home,
mobilehome, or commercial modular to notify the Department of
Housing and Community Development (HCD) and the county
assessor at least 31 days prior to the removal.
EXISTING LAW
1)Requires the installation of a manufactured home, mobilehome,
or commercial modular as a fixture or improvement to real
property to comply with various requirements (Health and
Safety Code Section 18551).
2)Specifies that the enforcement agency must record with the
county recorder on the same day as the issuance of the
certificate of occupancy for a manufactured home, mobilehome,
or commercial modular that has been installed upon real
property a document that includes the name of the owner of the
AB 379
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real property, a description of the real property, and a
statement that the manufactured home, mobilehome, or
commercial coach has been affixed to that real property by
installation on a foundation system (Health and Safety Code
Section 18551).
3)Requires an owner who intends to remove a manufactured home,
mobilehome, or commercial modular to notify HCD and the county
assessor at least 30 days prior to the removal (Health and
Safety Code Section 18551).
4)Specifies that a thing is deemed to be affixed to land when it
is attached to it by roots, as in the case of trees, vines, or
shrubs; or imbedded in it, as in the case of walls; or
permanently resting upon it, as in the case of buildings; or
permanently attached to what is thus permanent, as by means of
cement, plaster, nails, bolts, or screws; except that for the
purposes of sale, emblements, industrial growing crops and
things attached to or forming part of the land, which are
agreed to be severed before sale or under the contract of
sale, shall be treated as goods and be governed by the
provisions of the title of this code regulating the sales of
goods (Civil Code Section 660).
FISCAL EFFECT : None
COMMENTS :
Health and Safety Code Section 18551 sets forth the procedures
under which a manufactured home may be installed on and become a
fixture to real property. These procedures are important both
for tax purposes for local government entities and for the
financing of manufactured homes. Because manufactured homes are
considered to be chattel and not real property at the time of
purchase, the financing of these homes is different than with
stick built homes. The law recognizes this and allows companies
that finance the purchase of a manufactured home to maintain a
security interest in the home until it is paid off.
A recent California appellate court decision in Vieria
Enterprises v. City of East Palo Alto created uncertainty and
ambiguity with respect to the commercial financing of
manufactured homes. In that case, the court held that since the
owners had installed their manufactured home on their real
estate, Civil Code Section 660, which generally specifies how a
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thing is deemed to be affixed to the land, controlled over
Health and Safety Code Section 18551, which specifically
describes how a manufactured home may be deemed affixed to the
land. While the specific facts in the Vieria case were unique
and are unlikely to be duplicated in the future, the court's
ruling could be read as allowing a borrower to install a
manufactured home on a foundation system and potentially avoid
the lender's security interest. That interpretation could have a
chilling effect on lenders' willingness to finance manufactured
home purchases in the future.
AB 379 clarifies that the process set forth in Health and Safety
Code Section 18511 for "converting" a manufactured home into
real property and thus extinguishing a lender's security
interest applies notwithstanding any other law. The change
clears up the ambiguity created by the Vieria case, thus
ensuring that consumers will continue to be able to obtain loans
to purchase manufactured homes.
AB 379 additionally makes a minor change to the law by giving
enforcement agencies five days to record a document related to
the installation of a manufactured home on real property.
Current law requires the recording to happen on the same day as
the issuance of the certificate of occupancy. This change more
closely reflects current practice because receipt of the
certificate of occupancy and recording of the proper documents
by the enforcement agency on the same day is nearly impossible
and rarely, if ever, occurs.
REGISTERED SUPPORT / OPPOSITION :
Support
California Manufactured Housing Institute (sponsor)
Western Manufactured Housing Communities Association
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085