BILL ANALYSIS �
AB 379
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 379 (Brown)
As Amended June 12, 2013
Majority vote
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|ASSEMBLY: |75-0 |(April 11, |SENATE: |33-0 |(July 8, 2013) |
| | |2013) | | | |
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Original Committee Reference: H. & C.D.
SUMMARY : Makes technical and clarifying changes to the law relative
to the installation and removal of manufactured housing.
The Senate amendments make additional technical and clarifying
changes.
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
208 Cal.App.4th 584 (2012) 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 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
AB 379
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chilling effect on lenders' willingness to finance manufactured home
purchases in the future.
This bill clarifies that the process set forth in Health and Safety
Code Section 18551 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 Vieria, thus ensuring that consumers will be able to
obtain loans for manufactured homes.
This bill additionally gives enforcement agencies five days after
the issuance of the certificate of occupancy 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, which in practice is
rarely possible.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916) 319-2085FN:
0001100