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78R5695 T
By: Staples S.B. No. 521
A BILL TO BE ENTITLED
AN ACT
relating to the regulation and acquisition of manufactured housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 7A, Texas Manufactured Housing Standards
Act (Article 5221f, Vernon's Texas Civil Statutes) is amended to
read as follows:
Sec. 7A. CERTIFICATION AND EDUCATION PROGRAMS. (a) [(b)]
The board shall recognize, prepare, and [or] administer continuing
education programs for its license holders. A license holder must
participate in the continuing education programs to the extent
required by the board to retain the person's license. [The
department may recognize, prepare, or administer certification
programs for persons regulated under this Act. Participation in
the programs is voluntary]
(b) For the purposes of this section and other provisions of
the Act relating to the licensees of this department, the actions of
a licensed employee shall not be attributable to the employer if:
(1) the employer requires its licensed employees to
attend a board approved certification and continuing education
program;
(2) the employee has actually attended such a program;
and
(3) the employer has not directly or indirectly
encouraged the employee to violate provisions of this Act.
(4) the employer has no actual knowledge of any
employee actions which violate provisions of this Act. [The board
shall recognize, prepare, or administer continuing education
programs for its license holders. A license holder must
participate in the continuing education programs to the extent
required by the board to retain the person's license.] Any licensee
directly involved in the sale of manufactured housing must complete
8 hours per calendar year of certification and continuing education
programs provided by Subsection (a) that address state laws
applicable to all manufactured housing retailer practices,
applicable consumer protection regulations and ethical standards.
A licensee must complete the certification and continuing education
programs required by this subsection or the license is forfeited
until completion of the course.
(d) [(c)] Upon application to prepare or administer a
certification program or a continuing education program under this
section, the board may contract with a private, nonprofit,
tax-exempt organization listed in Section 501(c)(3), Internal
Revenue Code of 1986, [26 U.S.C. Section 501 (c)(3)] or with an
educational institution. The board may charge an application fee
to be set by the board in such amount as is necessary to defray the
expense of processing the application
(e) [(d)] The department shall issue appropriate
certificates to those persons who complete a certification program
and [or] who participate in a continuing education program under
this section.
SECTION 2. Section 19(l), Texas Manufactured Housing
Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
amended to read as follows:
If a manufactured home is permanently attached [affixed or
becomes improvement] to real estate or real property, as defined by
Chapter 2306.004(26), Government Code, the manufacturer's
certificate or the original document of title may [shall] be
surrendered to the department for cancellation. [This requirement
does not apply to an owner who is not issued a title under Section
2.001(e) or (f), Property Code.] The legal description or the
appropriate tract or parcel number of the real estate must be given
to the department when the manufacturer's certificate or original
document of title is surrendered. If a notice of attachment is to
be filed, a copy of the notice must be submitted with the
manufacturer's certificate or the original document of title
surrendered for cancellation. The director may require the filing
of other information. The department may not cancel a
manufacturer's certificate or an original [a] document of title if
a lien has been registered or recorded on the manufactured home. If
a lien has been registered or recorded, the department shall notify
the owner and each lienholder that the title and a description of
the lien have been surrendered to the department and that the
department may not cancel the title until the lien is released.
Permanent attachment to real estate does not affect the validity of
a lien recorded or registered with the department before the
manufactured home is permanently attached. The rights of a prior
lienholder pursuant to a security agreement or the provisions of a
credit transaction and the rights of the state pursuant to a tax
lien are preserved. The department shall issue a certificate of
attachment to real estate to the person who surrenders the
manufacturer's certificate or original document of title. The
certificate of attachment must contain the legal description or the
appropriate tract or parcel number of the real estate and the
identification number of the home, and must certify that the
manufacturer's certificate or original document of title has been
canceled. Before the issuance of a certificate of attachment, a
person or a title insurance company authorized to do business in
this state which surrenders the manufacturer's certificate or the
original document of title to the department may [shall] file a
notice of [improvement] attachment in the real property records of
the county in which the home is located. The notice must state that
the manufacturer's certificate or the original document of title
has been surrendered for cancellation and a request has been made
for the issuance of a certificate of attachment. The notice must
include information sufficient to identify the home and must
contain the legal description or the appropriate tract or parcel
number of the real property on which the home is located. The
notice is valid for all purposes until the certificate of
attachment is issued and filed in the real property records of the
appropriate county.
SECTION 3. Section 19A(a), (b) and (c), Texas Manufactured
Housing Standards Act (Article 5221f, Vernon's Texas Civil
Statutes) are amended to read as follows:
Sec. 19A. (a) A manufactured home that is permanently
attached to real property is classified and taxed as real property
if the real property to which the home is attached is titled in the
name of the consumer under a deed or contract for sale and the
consumer has elected to file a notice of attachment with the
department. A manufactured home is considered permanently attached
to real property if the home is secured to a foundation and
connected to a utility, including a utility providing water,
electric, natural gas, propane or butane gas, or wastewater
services.
(b) The closing of a transaction for the acquisition of real
property and a manufactured home considered to be real property
under this section must occur at the office of a federally insured
financial institution, a title company, or any attorney at law. If
the real property is purchased under a contract of sale, the
contract must be filed in the real property records of the county in
which the home is attached [installed].
(c) Installation of a manufactured home considered to be
real property under this section must occur in a manner that
satisfies the lending requirements of the Federal Housing
Administration (FHA), Fannie Mae, or Freddie Mac for long-term
mortgage loans or for FHA insurance. Additionally, the
installation of a new manufactured home must meet, [in addition to
applicable state standards,] the manufacturer's specifications
required to validate the manufacturer's warranty.
SECTION 4. The Texas Manufactured Housing Standards Act
(Article 5221f, Vernon's Texas Civil Statutes), Section 21 is
amended to read as follows:
Sec. 21. (a) Prior to the completion of a credit
application, the retailer or agent must provide to the consumer the
following statement that is printed in at least 10-point type and
not attached to or combined with any other written material:
"When buying a manufactured home, there are a number of
important considerations, including price, quality of
construction, features, floor plan, and financing alternatives.
"The United States Department of Housing and Urban
Development (HUD) helps protect consumers through regulation and
enforcement of HUD design and construction standards for
manufactured homes. Manufactured homes that meet HUD standards are
known as 'HUD-code manufactured homes.' The Texas Department of
Housing and Community Affairs regulates Texas manufacturers,
retailers, brokers, salespersons, installers, and rebuilders of
manufactured homes.
"If you plan to place a manufactured home on land that you own
or will buy, you should consider items such as:
"ZONING AND RESTRICTIVE COVENANTS. Municipalities [Some
municipalities] or subdivisions may restrict placement of
manufactured homes on certain lots, may prohibit the placement of
homes within a certain distance from property lines, may require
that homes be a certain size, and may impose certain construction
requirements. You may need to obtain building permits and
homeowner association approval before you place a manufactured home
on a certain lot. Contact the local municipality, county, and
subdivision manager to find out if you can place the manufactured
home of your choice on a certain lot.
"WATER. [Not all lots have immediate access to water lines.
You may have to drill a well.] Be sure that your lot has access to
water. If you must drill a well, contact several drillers for bids.
If water is available through [provided by] a municipality, utility
district, water district, or cooperative, you should inquire about
the rates you will have to pay and costs to join the water system.
"SEWER. If your lot is not serviced be a municipal sewer or
utility district, you will [may] have to install an on-site sewer
facility (commonly known as a septic system). There are a number of
concerns or restrictions that will determine if your lot is
adequate to support an on-site sewer facility. Check with the local
county or a licensed private installer to determine the
requirements that apply to your lot and the cost to install such a
system.
"HOMEOWNER ASSOCIATION FEES. Many subdivisions have
mandatory assessments and fees that lot owners must pay. Check with
the manager of the subdivision in which your lot is located to
determine if any fees apply to your lot.
"TAXES. Your home will be appraised and subject to ad valorem
taxes as other single-family residential structures. These taxes
must be escrowed with your monthly payment. Upon closing, you will
be notified of all provisions pertaining to federal Truth in
Lending disclosures. [In Texas, real property is taxed annually
based on its market value. Attaching a manufactured home to a lot
improves the lot's value and will increase the taxes assessed on the
lot. You are liable for the payment of all ad valorem taxes
assessed against your home by the municipality, county, school
district, and other tax authorities (utility district, community
college, etc.). As with other residential structures, the
applicable tax rate will apply to the market value of the home. You
should contact the local chief appraiser or the county tax
assessor-collector for specific tax information. They will need to
know the price you paid for, and the specific location of, the home.
If the manufactured home is your principal place of residence, you
should be able to claim a HOMESTEAD EXEMPTION. You should also make
certain that the lot or land you are purchasing is not subject to
any rollback tax liability because of the change in use of the
property."]
"INSURANCE. Your lender may require you to obtain insurance.
You should get quotes from the agent of your choice to obtain
insurance that meets lender requirements and protects your
investment."
[(b) A retailer may not transfer a title to a manufactured
home or otherwise sell, assign, or convey a manufactured home to a
consumer unless the retailer delivers to the consumer a written
document disclosing:
the total purchase price of the manufactured home, as
adjusted for:
(A) any agreed interest rate and any points or
fees; and
(B) the length of time for any loan repayment;
and
(2) regardless of whether the real property proposed
as the site for the manufactured home has been sold through an
executory contract for conveyance, any responsibility of the
consumer to:
(A) pay property taxes associated with the
manufactured home;
(B) maintain private roads proximate to the
manufactured home's location;
(C) maintain a contract for an on-site sewage
disposal system;
(D) obtain property damage insurance; and
(E) obtain mortgage insurance.
(c) If the information is available, a person making a loan
to a consumer to fund acquisition of a manufactured home shall also
make the disclosures described by Subsection (b) before the
consumer signs documents relating to the closing of the loan.
(b) A federally insured financial institution or lender
approved or authorized by the United States Department of Housing
and Urban Development as a mortgagee with direct endorsement
underwriting authority that fully complies with federal Truth in
Lending disclosures concerning the terms of a manufactured housing
transaction is exempt from the disclosure provisions of this
section.
(e) Failure to comply with the disclosure provisions of this
section does not affect the validity of a conveyance or transfer of
title of a manufactured home or otherwise impair a title or lien
position.]
SECTION 5. Section 2.001, Property Code, is amended to read
as follows:
Sec. 2.001. MANUFACTURED HOUSING. (a) Except as provided
by Subsection (b), a manufactured home is personal [real] property.
A manufactured home is real property if:
(1) the home is permanently attached to the real
property;
(2) the manufacturer's certificate of origin or the
original document of title is surrendered for cancellation and a
notice of attachment or a certificate of attachment, as described
by the Texas Manufactured Housing Standards Act (Article 5221 f,
Vernon's Texas Civil Statutes), is filed in the real property
records of the county in which the home is located, or
(3) The owner of a manufactured home has entered into a
lease for the real property on which the manufactured home is
located and the lease specifically permits the recording of a
certificate of attachment.
[(b) A manufactured home is personal property if the home is
placed:
(1) on a lot, whether permanently or temporarily, that
is not titled in the name of the consumer under a deed or contract
for sale; or
(2) in a manufactured home rental community as defined
by Section 232.007, Local Government Code.]
(b) In this section, "consumer," "document of title,"
"first retail sale," "manufactured home," and "mobile home" have
the meanings assigned by the Texas Manufactured Housing Standards
Act (Article 5221f, Vernon's Texas Civil Statutes).
(c) This section does not affect or change the
classification of a manufactured home as personal or real property
if the manufactured home was permanently affixed to real property
before January 1, 2002.
(e) Except as provided by subsection (b), the [The] Texas
Department of Housing and Community Affairs shall [may not] issue a
document of title for a new and untitled manufactured home at the
first retail sale of the home or for a titled manufactured home that
is being resold when [if] the home is to be permanently installed by
a retailer directly on real property titled in the name of the
consumer under a deed or contract for sale. In a real property
transaction, [Before installation,] the consumer must provide the
retailer with a legible copy of the deed containing a legal
description of the real property. The retailer is not required to
determine the validity of the legal description of the real
property. A federally insured financial institution, title company
or attorney at law conducting the closing of a real property
transaction under Section 19A, Texas Manufactured Housing
Standards Act (Article 5221f, Vernon's Texas Civil Statutes), or
the retailer or retailer's agent shall file in the public land
records for the county in which the real property is located a
notice of installation not later than the 30th working day after the
date the installation is completed and shall forward the
manufacturer's certificate of origin or document of title and a
copy of the notice of installation to the Texas Department of
Housing and Community Affairs. In a real property transaction a
[The] notice of installation serves as a completed cancellation
application.
[(f) For a manufactured home that is being resold by a
financial institution or a retailer and that is to be permanently
installed directly on real property titled in the name of the
consumer under a deed or contract for sale, a title company or
attorney at law conducting the closing of a transaction under
Section 19A, Texas Manufactured Housing Standards Act (Article
5221f, Vernon's Texas Civil Statutes), or the retailer or
retailer's agent shall file in the public land records for the
county in which the real property is located a notice of
installation not later than the 30th working day after the date the
installation is completed and shall forward the document of title
and a copy of the notice of installation of the Texas Department of
Housing and Community Affairs. The notice of installation serves
as a completed cancellation application.]
(f) [(g)] A notice of installation filed under this section
must[:] be in accordance with department rules.
[(1) be notarized;
be on a form prescribed by the Texas Department of
Housing and Community Affairs;
contain a description of the manufactured home,
including, as applicable, the home's make, model, dimensions,
federal label number, state seal number, and identification or
serial number;
include a verification of the installation of the
manufactured home as prescribed by Section 19A(c), Texas
Manufactured Housing Standards Act (Article 5221f, Vernon's Texas
Civil Statutes);
include the wind zone designation of the county in
which the manufactured home was installed, if known; and
be signed by:
(C) the retailer, for a manufactured home
described by Subsection (e); or
(D) the installer, for a manufactured home
described by Subsection (f).
(h) Subsections (e), (f), and (g) do not apply to a mobile
home.]
(h) [(i)] This section does not require a retailer or
retailer's agent to obtain a license under the Texas Real Estate
License Act, (Article 6573a, Vernon's Texas Civil Statutes).
SECTION 6. Section 347.254 of the Finance Code is amended to
read as follows:
Sec. 347.254. PAYMENT OF TAXES THROUGH THE CREDITOR. A
creditor shall [may] require a consumer to pay ad valorem taxes on
the manufactured home through the creditor. The creditor may:
(1) include in the credit transaction an amount equal
to a reasonable estimate of the tax for the first year; or
(2) require that the consumer pay on each installment
due date an amount equal to one-twelfth of the reasonable estimate
of the first year. (V.A.C.S. Art. 5069-6A.12(1)(part).)
SECTION 7. Section 32.014, (a), Tax Code, is amended to read
as follows:
Sec. 32.014. TAX LIEN ON MANUFACTURED HOME. If the
ownership of the real property on which a manufactured home is
affixed and the manufactured home are the same, and the owner has
been issued a certificate of attachment by the department, the
manufactured home shall be appraised and taxed as an improvement to
the real property, and the tax lien attaches to the real property on
which the manufactured home is located regardless of the
classification of the manufactured home under the Property Code.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.