Bulletin: DE000005

In the past year we have received many requests to insure transactions involving a manufactured housing units, prefabricated homes and mobile homes.

In certain cases, the determination as to whether a house or dwelling unit located on the land constitutes real property may not be an easy task. Nowadays, houses or dwelling units can be built totally on the land (on-site construction), or they can be built wholly on a different location (out-site construction.) Occasionally, the two methods of construction are combined (component housing.)

While those houses or dwelling units that are totally built on the land present no problem in qualifying as real property, those completely built outside the land do present some serious difficulties in order to have them divested of their condition of personal property and have them qualified as part of the land.

The term "land" is defined in the Conditions and Stipulations section of the ALTA title insurance policies as follows:

"(d) "land": the land described or referred to in Schedule A, and improvements affixed thereto which by law constitute real property...."

DE-DTIRB endorsement 15 (ALTA 7) can be used on an Owner's or a Lender's Policy.   This endorsement insures the insured that the definition of land includes the manufactured housing unit which is on the land.  The following are the underwriting requirements in order to issue the DE-DTIRB 15 endorsement (ALTA 7):

(1) The Owner calls the county.  For a $50 fee, and the title to the unit, the Office of Inspections and Enforcement will inspect the unit for compliance with the requirement for affixation to the land, which are:

• Removal of the axles, wheels and the tongue.
• Setting on a permanent foundation.
• Connection to sewer system and public utilities.

(2)  The County Office of Inspections and Enforcement then issues a letter confirming the affixation to the land and that the unit is no longer mobile.

(3) This letter and the title is sent to the Department of Motor Vehicles who will retire the title and issue a receipt.

(4) The receipt must then be taken to the County's assessment office for a reassessment of the real estate taxes.

(5) You must verify that the title has been retired by copy of the receipt therefore and verify the reassessment for real estate taxes.

(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 certificate and add the following exception to Schedule B:

"The land shall not be deemed to include any house trailer, manufactured home, mobile home or mobile dwelling on the land."

(7) You must verify that the tax assessor has assessed the manufactured home as a real property improvement.  If not make the following exception:

"Taxes for the year ___________ and prior years, due to failure to assess the house trailer, manufactured home, mobile home or mobile dwelling on the land."

Please contact a Stewart Delaware underwriter if you have any questions concerning this or any other topic for which you need assistance.  For on-line viewing of this and other bulletins, log onto http://vuwriter.com .