1-1 AN ACT
1-2 relating to the acquisition of manufactured homes through financing
1-3 or other means and to persons associated with those acquisitions.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 6A, Texas Manufactured Housing Standards
1-6 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
1-7 adding Subsection (c) to read as follows:
1-8 (c) A retailer, broker, salesperson or any person acting on
1-9 behalf of a retailer or broker shall not receive or accept any
1-10 compensation or consideration of any kind or type whatsoever from
1-11 the seller of the real estate or any person acting on the seller's
1-12 behalf. No part of the down payment on the purchase of the
1-13 manufactured home nor the payment of any fees, points, or other
1-14 charges or "buy-downs" shall be from funds from the seller of the
1-15 real estate or any person acting on the seller's behalf.
1-16 SECTION 2. Section 19(l), Texas Manufactured Housing
1-17 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
1-18 amended to read as follows:
1-19 (l) If a manufactured home is permanently affixed or becomes
1-20 an improvement to real estate, the manufacturer's certificate or
1-21 the original document of title shall [may] be surrendered to the
1-22 department for cancellation. This requirement does not apply to an
1-23 owner who is not issued a title under Section 2.001(e) or (f),
1-24 Property Code. The legal description or the appropriate tract or
2-1 parcel number of the real estate must be given to the department
2-2 when the certificate or document of title is surrendered. The
2-3 director may require the filing of other information. The
2-4 department may not cancel a manufacturer's certificate or a
2-5 document of title if a lien has been registered or recorded on the
2-6 manufactured home. If a lien has been registered or recorded, the
2-7 department shall notify the owner and each lienholder that the
2-8 title and a description of the lien have been surrendered to the
2-9 department and that the department may not cancel the title until
2-10 the lien is released. Permanent attachment to real estate does not
2-11 affect the validity of a lien recorded or registered with the
2-12 department before the manufactured home is permanently attached.
2-13 The rights of a prior lienholder pursuant to a security agreement
2-14 or the provisions of a credit transaction and the rights of the
2-15 state pursuant to a tax lien are preserved. The department shall
2-16 issue a certificate of attachment to real estate to the person who
2-17 surrenders the manufacturer's certificate or document of title.
2-18 The certificate of attachment [or document] must contain the legal
2-19 description or the appropriate tract or parcel number of the real
2-20 estate and the identification number of the home, and must certify
2-21 that the manufacturer's certificate or original document of title
2-22 has been canceled. Before the issuance of a certificate of
2-23 attachment, a title insurance company authorized to do business in
2-24 this state which surrenders the manufacturer's certificate or the
2-25 original document of title to the department shall file a notice of
2-26 improvement attachment in the real property records of the county
2-27 in which the home is located. The notice must state that the
3-1 manufacturer's certificate or the original document of title has
3-2 been surrendered for cancellation and a request has been made for
3-3 the issuance of a certificate of attachment. The notice must
3-4 include information sufficient to identify the home and must
3-5 contain the legal description or the appropriate tract or parcel
3-6 number of the real property on which the home is located. The
3-7 notice is valid for all purposes until the certificate of
3-8 attachment is issued and filed in the real property records of the
3-9 appropriate county.
3-10 SECTION 3. The Texas Manufactured Housing Standards Act
3-11 (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
3-12 Section 19A to read as follows:
3-13 Sec. 19A. CERTAIN MANUFACTURED HOMES CONSIDERED REAL
3-14 PROPERTY. (a) A manufactured home that is permanently attached to
3-15 real property is classified and taxed as real property if the real
3-16 property to which the home is attached is titled in the name of the
3-17 consumer under a deed or contract for sale. A manufactured home is
3-18 considered permanently attached to real property if the home is
3-19 secured to a foundation and connected to a utility, including a
3-20 utility providing water, electric, natural gas, propane or butane
3-21 gas, or wastewater services.
3-22 (b) The closing of a transaction for the acquisition of a
3-23 manufactured home considered to be real property under this section
3-24 must occur at the office of a federally insured financial
3-25 institution, a title company, or an attorney at law. If the real
3-26 property is purchased under a contract of sale, the contract must
3-27 be filed in the real property records of the county in which the
4-1 home is installed.
4-2 (c) Installation of a manufactured home considered to be
4-3 real property under this section must occur in a manner that
4-4 satisfies the lending requirements of the Federal Housing
4-5 Administration (FHA), Fannie Mae, or Freddie Mac for long-term
4-6 mortgage loans or for FHA insurance. The installation of a new
4-7 manufactured home must meet, in addition to applicable state
4-8 standards, the manufacturer's specifications required to validate
4-9 the manufacturer's warranty.
4-10 (d) A civil action to enjoin a violation of this section may
4-11 be brought by a purchaser in the county where the violation occurs
4-12 or by the county where the violation occurs.
4-13 (e) A manufactured home permanently attached to real
4-14 property before January 1, 2002, or placed in a manufactured home
4-15 rental community as defined by Section 232.007, Local Government
4-16 Code, is not subject to this section.
4-17 (f) This section does not require a retailer or retailer's
4-18 agent to obtain a license under The Real Estate License Act
4-19 (Article 6573a, Vernon's Texas Civil Statutes).
4-20 SECTION 4. The Texas Manufactured Housing Standards Act
4-21 (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
4-22 Section 21 to read as follows:
4-23 Sec. 21. DISCLOSURE BY RETAILER AND LENDER. (a) Prior to
4-24 the completion of a credit application, the retailer or agent must
4-25 provide to the consumer the following statement that is printed in
4-26 at least 10-point type and not attached to or combined with any
4-27 other written material:
5-1 "When buying a manufactured home, there are a number of
5-2 important considerations, including price, quality of construction,
5-3 features, floor plan, and financing alternatives.
5-4 "The United States Department of Housing and Urban
5-5 Development (HUD) helps protect consumers through regulation and
5-6 enforcement of HUD design and construction standards for
5-7 manufactured homes. Manufactured homes that meet HUD standards are
5-8 known as 'HUD-code manufactured homes.' The Texas Department of
5-9 Housing and Community Affairs regulates Texas manufacturers,
5-10 retailers, brokers, salespersons, installers, and rebuilders of
5-11 manufactured homes.
5-12 "If you plan to place a manufactured home on land that you
5-13 own or will buy, you should consider items such as:
5-14 "ZONING AND RESTRICTIVE COVENANTS. Some municipalities or
5-15 subdivisions may restrict placement of manufactured homes on
5-16 certain lots, may prohibit the placement of homes within a certain
5-17 distance from property lines, may require that homes be a certain
5-18 size, and may impose certain construction requirements. You may
5-19 need to obtain building permits and homeowner association approval
5-20 before you place a manufactured home on a certain lot. Contact the
5-21 local municipality, county, and subdivision manager to find out if
5-22 you can place the manufactured home of your choice on a certain
5-23 lot.
5-24 "WATER. Not all lots have immediate access to water lines.
5-25 You may have to drill a well. Be sure that your lot has access to
5-26 water. If you must drill a well, contact several drillers for
5-27 bids. If water is provided by a municipality, utility district,
6-1 water district, or cooperative, you should inquire about the rates
6-2 you will have to pay.
6-3 "SEWER. If your lot is not serviced by a municipal sewer
6-4 system or utility district, you may have to install an on-site
6-5 sewer facility (commonly known as a septic system). There are a
6-6 number of concerns or restrictions that will determine if your lot
6-7 is adequate to support an on-site sewer facility. Check with the
6-8 local county or a private installer to determine the requirements
6-9 that apply to your lot and the cost to install such a system.
6-10 "HOMEOWNER ASSOCIATION FEES. Many subdivisions have
6-11 mandatory assessments and fees that lot owners must pay. Check
6-12 with the manager of the subdivision in which your lot is located to
6-13 determine if any fees apply to your lot.
6-14 "TAXES. In Texas, real property is taxed annually based on
6-15 its market value. Attaching a manufactured home to a lot improves
6-16 the lot's value and will increase the taxes assessed on the lot.
6-17 You are liable for the payment of all ad valorem taxes assessed
6-18 against your home by the municipality, county, school district, and
6-19 other tax authorities (utility district, community college, etc.).
6-20 As with other residential structures, the applicable tax rate will
6-21 apply to the market value of the home. You should contact the
6-22 local chief appraiser or the county tax assessor-collector for
6-23 specific tax information. They will need to know the price you
6-24 paid for, and the specific location of, the home. If the
6-25 manufactured home is your principal place of residence, you should
6-26 be able to claim a HOMESTEAD EXEMPTION. You should also make
6-27 certain that the lot or land you are purchasing is not subject to
7-1 any rollback tax liability because of the change in use of the
7-2 property."
7-3 (b) A retailer may not transfer title to a manufactured home
7-4 or otherwise sell, assign, or convey a manufactured home to a
7-5 consumer unless the retailer delivers to the consumer a written
7-6 document disclosing:
7-7 (1) the total purchase price of the manufactured home,
7-8 as adjusted for:
7-9 (A) any agreed interest rate and any points or
7-10 fees; and
7-11 (B) the length of time for any loan repayment;
7-12 and
7-13 (2) regardless of whether the real property proposed
7-14 as the site for the manufactured home has been sold through an
7-15 executory contract for conveyance, any responsibility of the
7-16 consumer to:
7-17 (A) pay property taxes associated with the
7-18 manufactured home;
7-19 (B) maintain private roads proximate to the
7-20 manufactured home's location;
7-21 (C) maintain a contract for an on-site sewage
7-22 disposal system;
7-23 (D) obtain property damage insurance; and
7-24 (E) obtain mortgage insurance.
7-25 (c) If the information is available, a person making a loan
7-26 to a consumer to fund acquisition of a manufactured home shall also
7-27 make the disclosures described by Subsection (b) before the
8-1 consumer signs documents relating to the closing of the loan.
8-2 (d) A federally insured financial institution or lender
8-3 approved or authorized by the United States Department of Housing
8-4 and Urban Development as a mortgagee with direct endorsement
8-5 underwriting authority that fully complies with federal Truth in
8-6 Lending disclosures concerning the terms of a manufactured housing
8-7 transaction is exempt from the disclosure provisions of this
8-8 section.
8-9 (e) Failure to comply with the disclosure provisions of this
8-10 section does not affect the validity of a conveyance or transfer of
8-11 title of a manufactured home or otherwise impair a title or lien
8-12 position.
8-13 SECTION 5. Section 2.001, Property Code, is amended to read
8-14 as follows:
8-15 Sec. 2.001. MANUFACTURED HOUSING. (a) Except as provided by
8-16 Subsection (b), a manufactured home is real [personal] property.
8-17 (b) A manufactured home is personal [real] property if the
8-18 home is placed:
8-19 (1) on a lot, whether permanently or temporarily, that
8-20 is not titled in the name of the consumer under a deed or contract
8-21 for sale [the home is permanently attached to real property]; or
8-22 [and]
8-23 (2) in a manufactured home rental community as defined
8-24 by Section 232.007, Local Government Code [the manufacturer's
8-25 certificate of origin or the original document of title is
8-26 surrendered for cancellation and a certificate of attachment
8-27 described by the Texas Manufactured Housing Standards Act (Article
9-1 5221f, Vernon's Texas Civil Statutes) is filed in the real property
9-2 records of the county in which the home is located].
9-3 (c) In this section, "consumer," "document of title," "first
9-4 retail sale," "manufactured home," and "mobile home" have [has] the
9-5 meanings [meaning] assigned by the Texas Manufactured Housing
9-6 Standards Act (Article 5221f, Vernon's Texas Civil Statutes).
9-7 (d) This section does not affect or change the
9-8 classification of a manufactured home as personal or real property
9-9 if the manufactured home was permanently affixed to real property
9-10 before January 1, 2002 [1996].
9-11 (e) The Texas Department of Housing and Community Affairs
9-12 may not issue a document of title for a new and untitled
9-13 manufactured home at the first retail sale of the home if the home
9-14 is to be permanently installed by a retailer directly on real
9-15 property titled in the name of the consumer under a deed or
9-16 contract for sale. Before installation, the consumer must provide
9-17 the retailer with a legible copy of the deed containing a legal
9-18 description of the real property. The retailer is not required to
9-19 determine the validity of the legal description of the real
9-20 property. A title company or attorney at law conducting the
9-21 closing of a transaction under Section 19A, Texas Manufactured
9-22 Housing Standards Act (Article 5221f, Vernon's Texas Civil
9-23 Statutes), or the retailer or retailer's agent shall file in the
9-24 public land records for the county in which the real property is
9-25 located a notice of installation not later than the 30th working
9-26 day after the date the installation is completed and shall forward
9-27 the manufacturer's certificate of origin and a copy of the notice
10-1 of installation to the Texas Department of Housing and Community
10-2 Affairs. The notice of installation serves as a completed
10-3 cancellation application.
10-4 (f) For a manufactured home that is being resold by a
10-5 financial institution or a retailer and that is to be permanently
10-6 installed directly on real property titled in the name of the
10-7 consumer under a deed or contract for sale, a title company or
10-8 attorney at law conducting the closing of a transaction under
10-9 Section 19A, Texas Manufactured Housing Standards Act (Article
10-10 5221f, Vernon's Texas Civil Statutes), or the retailer or
10-11 retailer's agent shall file in the public land records for the
10-12 county in which the real property is located a notice of
10-13 installation not later than the 30th working day after the date the
10-14 installation is completed and shall forward the document of title
10-15 and a copy of the notice of installation to the Texas Department of
10-16 Housing and Community Affairs. The notice of installation serves
10-17 as a completed cancellation application.
10-18 (g) A notice of installation filed under this section must:
10-19 (1) be notarized;
10-20 (2) be on a form prescribed by the Texas Department of
10-21 Housing and Community Affairs;
10-22 (3) contain a description of the manufactured home,
10-23 including, as applicable, the home's make, model, dimensions,
10-24 federal label number, state seal number, and identification or
10-25 serial number;
10-26 (4) include a verification of the installation of the
10-27 manufactured home as prescribed by Section 19A(c), Texas
11-1 Manufactured Housing Standards Act (Article 5221f, Vernon's Texas
11-2 Civil Statutes);
11-3 (5) include the wind zone designation of the county in
11-4 which the manufactured home was installed, if known; and
11-5 (6) be signed by:
11-6 (A) the retailer, for a manufactured home
11-7 described by Subsection (e); or
11-8 (B) the installer, for a manufactured home
11-9 described by Subsection (f).
11-10 (h) Subsections (e), (f), and (g) do not apply to a mobile
11-11 home.
11-12 (i) This section does not require a retailer or retailer's
11-13 agent to obtain a license under The Real Estate License Act
11-14 (Article 6573a, Vernon's Texas Civil Statutes).
11-15 SECTION 6. Section 62.004, Property Code, as added by Chapter
11-16 742, Acts of the 76th Legislature, Regular Session, 1999, is
11-17 amended to read as follows:
11-18 Sec. 62.004. REFINANCING OF LIEN. (a) A person who provides
11-19 funds to refinance a lien secured by a manufactured home is
11-20 subrogated to the lien position of the previous lienholder.
11-21 (b) If the holder of a lien secured by a manufactured home
11-22 transfers loan or credit advance documents to a lender refinancing
11-23 the lien, that lender and a title insurance company, title
11-24 insurance agent or direct operation, or attorney to whom the loan
11-25 or credit advance documents are delivered holds the loan or credit
11-26 advance documents in trust for that lienholder. In this
11-27 subsection, "direct operation" has the meaning assigned by Article
12-1 9.02, Insurance Code.
12-2 (c) A lien that is converted to a purchase money lien on
12-3 real property under Section 62.003, or a lien for the debt for new
12-4 improvements thereon under Section 62.005, may be refinanced with
12-5 another lien on the real property to which the manufactured home is
12-6 permanently attached as provided by Section 2.001 [2.001(b)].
12-7 SECTION 7. Chapter 62, Property Code, is amended by adding
12-8 Section 62.005 to read as follows:
12-9 Sec. 62.005. CONVERSION OF LIEN FROM A PERSONAL PROPERTY
12-10 LIEN TO A REAL PROPERTY LIEN FOR THE DEBT FOR THE NEW IMPROVEMENTS
12-11 THEREON. (a) A manufactured home becomes a new improvement to the
12-12 homestead of a family or of a single adult person upon the filing
12-13 of the certificate of attachment as provided in the Texas
12-14 Manufactured Housing Standards Act (Article 5221f, Vernon's Texas
12-15 Civil Statutes). As such, if the debt for the manufactured home
12-16 was contracted for in writing, that debt is considered to be for
12-17 work and materials used in constructing new improvements thereon
12-18 and thus constitutes a valid lien on the homestead when the
12-19 certificate of attachment is filed in the Official Public Records
12-20 of Real Property in the county in which the land is located.
12-21 (b) When the manufactured home converts to real property as
12-22 provided by Section 2.001 of this code, the lien on the property
12-23 exists independently of any existing lien on the real property to
12-24 which the home is permanently attached.
12-25 SECTION 8. Section 32.014, Tax Code, is amended to read as
12-26 follows:
12-27 Sec. 32.014. TAX LIEN ON MANUFACTURED HOME [SUBJECT TO
13-1 SECURITY INTEREST]. (a) If the ownership of the real property on
13-2 which a manufactured home is affixed and the manufactured home are
13-3 the same, the manufactured home shall be appraised and taxed as an
13-4 improvement to the real property, and the tax lien attaches to the
13-5 real property on which the manufactured home is located regardless
13-6 of the classification of the manufactured home under the Property
13-7 Code [A tax lien to secure the payment of a tax and any penalties
13-8 and interest imposed on a manufactured home does not attach to the
13-9 real property on which the manufactured home is located, even if
13-10 the manufactured home is affixed to the real property by
13-11 installation on a permanent foundation, if on the January 1 on
13-12 which the tax is imposed, the manufactured home is subject to a
13-13 lien of record on a document of title issued on the manufactured
13-14 home by the Texas Department of Housing and Community Affairs. If
13-15 such a lien is not of record on January 1 and the ownership of the
13-16 manufactured home and the real property is the same, the
13-17 manufactured housing may be appraised and taxed as an improvement
13-18 to real property, notwithstanding any other law relating to the
13-19 classification of manufactured housing as real or personal
13-20 property].
13-21 (b) If the ownership of the manufactured home, whether by
13-22 deed or contract for sale, and the real property on which the
13-23 manufactured home is affixed are not the same, the personal
13-24 property manufactured home shall be separately appraised and taxed
13-25 at the same rate and on the same ad valorem basis as other
13-26 single-family residential structures. The tax lien on the
13-27 manufactured home does not attach to the real property when the
14-1 ownership of the manufactured home and real property are different.
14-2 (c) In this section, "manufactured home" has the meaning
14-3 assigned by Section 3, Texas Manufactured Housing Standards Act
14-4 (Article 5221f, Vernon's Texas Civil Statutes).
14-5 SECTION 9. The change in law made by this Act applies only
14-6 to a manufactured home that is acquired by a consumer on or after
14-7 the effective date of this Act.
14-8 SECTION 10. (a) Except as provided by Subsection (b) of
14-9 this section, this Act takes effect January 1, 2002.
14-10 (b) Section 1 of this Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1869 was passed by the House on May
1, 2001, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1869 on May 25, 2001, by a non-record
vote; and that the House adopted H.C.R. No. 327 authorizing certain
corrections in H.B. No. 1869 on May 28, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1869 was passed by the Senate, with
amendments, on May 17, 2001, by a viva-voce vote; and that the
Senate adopted H.C.R. No. 327 authorizing certain corrections in
H.B. No. 1869 on May 28, 2001, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor