Bulletin: CT000016

Dear Associates:

Mobile manufactured homes are an important housing resource for many Connecticut residents.  Whether sited on individual lots or within mobile manufactured home communities, they offer an appealing alternative to conventional housing for first time buyers, as well as those seeking to downsize.

Prior to 1986, mobile homes were motor vehicles subject to title laws and typically, the loan instrument used to secure a loan on the home were Uniform Commercial Code financing statements filed in accordance with the code.

Effective July 01, 1986, the Connecticut legislature redefined mobile homes to be mobile manufactured homes and defined mobile manufactured homes (hereinafter MMH) as real estate if connected to utilities and used as a residence. (CGS § 12-63a) A MMH is defined as a detached residential unit, intrinsically mobile, with or without a wheeled chassis containing sleeping, plumbing and electrical systems designed and ready for long-term occupancy after connection to utilities systems. (CGS §21-64)

TAXES - when sold new by a manufacturer, the MMH is subject to the state sales and use tax at seventy percent (70%) of the value. (CGS §12-412c)Once connected to utilities and used as a residence on either leased or owned land, the MMH is taxed as real property by the town where it is located. (CGS §12-63a) If not used as a residence, municipal tax assessors will tax as personal property using "Bluebook" values for used mobile homes. Upon resale, if the MMH is located in a MMH park or on a single-family lot, it is exempt from sales/use tax and taxed as a conveyance of real property. A MMH located on owned land is taxed the same as any dwelling house. (CGS §12-63a) NOTE: CGS §12-63a allowed municipalities to convert taxation from personal property to real property by October 01, 1986 or upon the first resale after that date. Therefore, in those towns where the municipality chose to wait until the first resale, there are still a certain number of MMH's that have not been resold after October 01, 1986 and thus, remain taxed as personal property. You must check with the town assessor.

CONVEYANCING - when the conversion took place in 1986 whereby a MMH was now considered real estate, MMH Park owners were required to file a list (one time filing) of MMH owners on the town's land records where the MMH Park was located. (CGS §21-67a) That statute also required MMH owners to file evidence of ownership (certificate of title/bill of sale) on the land records in the town where the MMH was located.

Thereafter, all transfers of ownership of MM''s were considered real property conveyances requiring a deed be filed on the land records of the town where the MMH is located. CGS §21-67a lists the information required in the deed. State and municipal conveyance taxes apply pursuant to CGS §§ 21-412c and 12-294. Third parties may only market re-sales of MMH's if they hold a valid Connecticut real estate license. CGS §20-311.

FINANCING - Lenders may secure loans on MMH's using a statutory real property mortgage deed or continue to use UCC financing statements. However, after 10-01-1993 all security instruments (mortgages/security interests/chattel mortgages or attachments) creating an encumbrance on a MMH must be recorded on the land records in the town where the MMH is located including perfection of an encumbrance under the UCC. CGS §21-67a.

UNDERWRITING - ALTA 7 (ALTA 7-06) Manufactured Housing Endorsement is an approved Connecticut form. This endorsement provides that the definition of ?land? in the policy includes the manufactured housing unit located on the land. To issue ALTA 7 you must do the following:

(1) Verify the 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).

(2) Verify the manufactured housing is attached to the property as a permanent improvement; for example, you may verify by inspection, affidavit and survey, or affidavit and pictures.

(3) Verify the manufactured housing is not treated under state law as personal property; for example, you must verify that any title certificate previously issued has been canceled or it is taxed as real property.

(4) Verify any liens on the title certificate are satisfied and that any sales or personal property taxes on the transfer of the manufactured housing are paid.

(5) Verify no UCC filing has been made in the land records in connection with the manufactured housing unit.

(6) Even if you are not asked to issue this endorsement, you should, whenever insuring land with manufactured housing attached as a permanent improvement, verify that there are no liens on the title (either on the title certificate if applicable or as reflected by a UCC search) or you should make a general exception to any such possible liens.

(7) Verify the assessor has assessed the manufactured home as a real property improvement

For more information, the Stewart Title Guaranty Company Underwriting Manual (Virtual Underwriter) Sections 12.24.1 and 12.24.2 contains an excellent discussion of the requirements to issue the ALTA 7 Endorsement. In addition, you should consult Chapter 412 (Sections 21-64 to 21-84a); Chapter 413 (Sections 21-85 to 21-89) as well as Chapter 203 (Sections 12-63a and 12-412c) of the Connecticut General Statutes. The underwriting manual can be accessed at http://www.vuwriter.com.

Finally, the State of Connecticut has established the Mobile Manufactured Home Advisory Council through the Department of Consumer Protection. This fifteen-member council monitors the implementation of statutes and regulations as well as promotes MMH education and housing for the entire state. The Advisory Website is an excellent source of information at http://www.ct.gov/dcp/cwp/view.asp?a=1624&q=289810.