1-1 By: Wohlgemuth, et al. (Senate Sponsor - Harris) H.B. No. 1869
1-2 (In the Senate - Received from the House May 2, 2001;
1-3 May 3, 2001, read first time and referred to Committee on Business
1-4 and Commerce; May 11, 2001, reported favorably by the following
1-5 vote: Yeas 5, Nays 0; May 11, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the acquisition of manufactured homes through financing
1-9 or other means and to persons associated with those acquisitions.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. The Texas Manufactured Housing Standards Act
1-12 (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
1-13 Section 19A to read as follows:
1-14 Sec. 19A. CERTAIN MANUFACTURED HOMES CONSIDERED REAL
1-15 PROPERTY. (a) A manufactured home that is permanently attached to
1-16 real property is classified and taxed as real property if the real
1-17 property to which the home is attached is titled in the name of the
1-18 consumer under a deed or contract for sale. A manufactured home is
1-19 considered permanently attached to real property if the home is
1-20 secured to a foundation and connected to a utility, including a
1-21 utility providing water, electric, natural gas, propane or butane
1-22 gas, or wastewater services.
1-23 (b) The closing of a transaction for the acquisition of a
1-24 manufactured home considered to be real property under this section
1-25 must occur at the office of a federally insured financial
1-26 institution, a title company, or an attorney at law.
1-27 (c) Installation of a manufactured home considered to be
1-28 real property under this section must occur in a manner that
1-29 satisfies the lending requirements of the Federal Housing
1-30 Administration, regardless of whether any financing of the
1-31 manufactured home occurs through that agency. The installation of a
1-32 new manufactured home must meet, in addition to applicable state
1-33 standards, the manufacturer's specifications required to validate
1-34 the manufacturer's warranty.
1-35 (d) A civil action to enjoin a violation of this section may
1-36 be brought by the county where the violation occurs.
1-37 (e) A manufactured home permanently attached to real
1-38 property before September 1, 2001, or placed in a manufactured home
1-39 rental community as defined by Section 232.007, Local Government
1-40 Code, is not subject to this section.
1-41 (f) This section does not require a retailer or retailer's
1-42 agent to obtain a license under The Real Estate License Act
1-43 (Article 6573a, Vernon's Texas Civil Statutes).
1-44 SECTION 2. The Texas Manufactured Housing Standards Act
1-45 (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
1-46 Section 21 to read as follows:
1-47 Sec. 21. DISCLOSURE BY RETAILER AND LENDER. (a) At the
1-48 first personal meeting between a retailer or agent of the retailer
1-49 and a consumer, the retailer or agent must provide to the consumer
1-50 the following statement that is printed in at least 10-point type
1-51 and not attached to or combined with any other written material:
1-52 "When buying a manufactured home, there are a number of
1-53 important considerations, including price, quality of construction,
1-54 features, floor plan, and financing alternatives.
1-55 "The United States Department of Housing and Urban
1-56 Development (HUD) helps protect consumers through regulation and
1-57 enforcement of HUD design and construction standards for
1-58 manufactured homes. Manufactured homes that meet HUD standards are
1-59 known as 'HUD-code manufactured homes.' The Texas Department of
1-60 Housing and Community Affairs regulates Texas manufacturers,
1-61 retailers, brokers, salespersons, installers, and rebuilders of
1-62 manufactured homes.
1-63 "If you plan to place a manufactured home on land that you
1-64 own or will buy, you should consider items such as:
2-1 "ZONING AND RESTRICTIVE COVENANTS. Some municipalities or
2-2 subdivisions may restrict placement of manufactured homes on
2-3 certain lots, may prohibit the placement of homes within a certain
2-4 distance from property lines, may require that homes be a certain
2-5 size, and may impose certain construction requirements. You may
2-6 need to obtain building permits and homeowner association approval
2-7 before you place a manufactured home on a certain lot. Contact the
2-8 local municipality, county, and subdivision manager to find out if
2-9 you can place the manufactured home of your choice on a certain
2-10 lot.
2-11 "WATER. Not all lots have immediate access to water lines.
2-12 You may have to drill a well. Be sure that your lot has access to
2-13 water. If you must drill a well, contact several drillers for
2-14 bids. If water is provided by a municipality, utility district,
2-15 water district, or cooperative, you should inquire about the rates
2-16 you will have to pay.
2-17 "SEWER. If your lot is not serviced by a municipal sewer
2-18 system or utility district, you may have to install an on-site
2-19 sewer facility (commonly known as a septic system). There are a
2-20 number of concerns or restrictions that will determine if your lot
2-21 is adequate to support an on-site sewer facility. Check with the
2-22 local county or a private installer to determine the requirements
2-23 that apply to your lot and the cost to install such a system.
2-24 "HOMEOWNER ASSOCIATION FEES. Many subdivisions have
2-25 mandatory assessments and fees that lot owners must pay. Check
2-26 with the manager of the subdivision in which your lot is located to
2-27 determine if any fees apply to your lot.
2-28 "TAXES. In Texas, real property is taxed annually based on
2-29 its market value. Attaching a manufactured home to a lot improves
2-30 the lot's value and will increase the taxes assessed on the lot.
2-31 If the real property on which you plan to place the manufactured
2-32 home has, in the last five years, been eligible for a special
2-33 evaluation that allows the property to be appraised at less than
2-34 market value, a change in the use of the property may result in
2-35 additional tax liability. The additional tax liability is commonly
2-36 known as a rollback tax. You should determine that the property
2-37 you own or will purchase is not subject to any rollback tax
2-38 liability. If you are purchasing a vacant lot, the law requires the
2-39 contract for the purchase of the lot to disclose this possibility
2-40 or specifically address any rollback tax liability."
2-41 (b) A retailer may not transfer title to a manufactured home
2-42 or otherwise sell, assign, or convey a manufactured home to a
2-43 consumer unless the retailer delivers to the consumer a written
2-44 document disclosing:
2-45 (1) the total purchase price of the manufactured home,
2-46 as adjusted for:
2-47 (A) any agreed interest rate and any points or
2-48 fees; and
2-49 (B) the length of time for any loan repayment;
2-50 and
2-51 (2) regardless of whether the real property proposed
2-52 as the site for the manufactured home has been sold through an
2-53 executory contract for conveyance, any responsibility of the
2-54 consumer to:
2-55 (A) pay property taxes associated with the
2-56 manufactured home;
2-57 (B) maintain private roads proximate to the
2-58 manufactured home's location;
2-59 (C) maintain a contract for an on-site sewage
2-60 disposal system;
2-61 (D) obtain property damage insurance; and
2-62 (E) obtain mortgage insurance.
2-63 (c) If the information is available, a person making a loan
2-64 to a consumer to fund acquisition of a manufactured home shall also
2-65 make the disclosures described by Subsection (b) before the
2-66 consumer signs documents relating to the closing of the loan.
2-67 (d) A federally insured financial institution or lender
2-68 approved or authorized by the United States Department of Housing
2-69 and Urban Development as a mortgagee with direct endorsement
3-1 underwriting authority that fully complies with federal Truth in
3-2 Lending disclosures concerning the terms of a manufactured housing
3-3 transaction is exempt from the disclosure provisions of this
3-4 section.
3-5 (e) Failure to comply with the disclosure provisions of this
3-6 section does not affect the validity of a conveyance or transfer of
3-7 title of a manufactured home or otherwise impair a title or lien
3-8 position.
3-9 SECTION 3. Section 2.001, Property Code, is amended to read
3-10 as follows:
3-11 Sec. 2.001. MANUFACTURED HOUSING. (a) Except as provided by
3-12 Subsection (b), a manufactured home is real [personal] property.
3-13 (b) A manufactured home is personal [real] property if the
3-14 home is placed:
3-15 (1) on a lot, whether permanently or temporarily, that
3-16 is not titled in the name of the consumer under a deed or contract
3-17 for sale [the home is permanently attached to real property]; or
3-18 [and]
3-19 (2) in a manufactured home rental community as defined
3-20 by Section 232.007, Local Government Code [the manufacturer's
3-21 certificate of origin or the original document of title is
3-22 surrendered for cancellation and a certificate of attachment
3-23 described by the Texas Manufactured Housing Standards Act (Article
3-24 5221f, Vernon's Texas Civil Statutes) is filed in the real property
3-25 records of the county in which the home is located].
3-26 (c) In this section, "consumer," "document of title," "first
3-27 retail sale," "manufactured home," and "mobile home" have [has] the
3-28 meanings [meaning] assigned by the Texas Manufactured Housing
3-29 Standards Act (Article 5221f, Vernon's Texas Civil Statutes).
3-30 (d) This section does not affect or change the
3-31 classification of a manufactured home as personal or real property
3-32 if the manufactured home was permanently affixed to real property
3-33 before September 1, 2001 [January 1, 1996].
3-34 (e) The Texas Department of Housing and Community Affairs
3-35 may not issue a document of title for a new and untitled
3-36 manufactured home at the first retail sale of the home if the home
3-37 is to be permanently installed by a retailer directly on real
3-38 property titled in the name of the consumer under a deed or
3-39 contract for sale. Before installation, the consumer must provide
3-40 the retailer with a legible copy of the deed containing a legal
3-41 description of the real property. The retailer is not required to
3-42 determine the validity of the legal description of the real
3-43 property. A title company or attorney at law conducting the
3-44 closing of a transaction under Section 19A, Texas Manufactured
3-45 Housing Standards Act (Article 5221f, Vernon's Texas Civil
3-46 Statutes), or the retailer or retailer's agent shall file in the
3-47 public land records for the county in which the real property is
3-48 located a notice of installation not later than the 10th working
3-49 day after the date the installation is completed and shall forward
3-50 the manufacturer's certificate of origin and a copy of the notice
3-51 of installation to the Texas Department of Housing and Community
3-52 Affairs. The notice of installation serves as a completed
3-53 cancellation application.
3-54 (f) For a manufactured home that is being resold by a
3-55 financial institution or a retailer and that is to be permanently
3-56 installed directly on real property titled in the name of the
3-57 consumer under a deed or contract for sale, a title company or
3-58 attorney at law conducting the closing of a transaction under
3-59 Section 19A, Texas Manufactured Housing Standards Act (Article
3-60 5221f, Vernon's Texas Civil Statutes), or the retailer or
3-61 retailer's agent shall file in the public land records for the
3-62 county in which the real property is located a notice of
3-63 installation not later than the 10th working day after the date the
3-64 installation is completed and shall forward the document of title
3-65 and a copy of the notice of installation to the Texas Department of
3-66 Housing and Community Affairs. The notice of installation serves
3-67 as a completed cancellation application.
3-68 (g) A notice of installation filed under this section must:
3-69 (1) be notarized;
4-1 (2) be on a form prescribed by the Texas Department of
4-2 Housing and Community Affairs;
4-3 (3) contain a description of the manufactured home,
4-4 including, as applicable, the home's make, model, dimensions,
4-5 federal label number, state seal number, and identification or
4-6 serial number;
4-7 (4) include a verification of the installation of the
4-8 manufactured home as prescribed by Section 19A(c), Texas
4-9 Manufactured Housing Standards Act (Article 5221f, Vernon's Texas
4-10 Civil Statutes);
4-11 (5) include the wind zone designation of the county in
4-12 which the manufactured home was installed, if known; and
4-13 (6) be signed by:
4-14 (A) the retailer, for a manufactured home
4-15 described by Subsection (e); or
4-16 (B) the installer, for a manufactured home
4-17 described by Subsection (f).
4-18 (h) Subsections (e), (f), and (g) do not apply to a mobile
4-19 home.
4-20 (i) This section does not require a retailer or retailer's
4-21 agent to obtain a license under The Real Estate License Act
4-22 (Article 6573a, Vernon's Texas Civil Statutes).
4-23 SECTION 4. The change in law made by this Act applies only
4-24 to a manufactured home that is acquired by a consumer on or after
4-25 the effective date of this Act.
4-26 SECTION 5. This Act takes effect September 1, 2001.
4-27 * * * * *