Assemblymember Cheryl R. Brown Wins Assembly Approval for Bill to Protect Financing for Manufactured Homeowners
A bill that seeks to protect access to financing for manufactured homeowners, AB 379, passed out of the Assembly Floor with a bi-partisan vote of 75 to 0 and is headed to the Senate.
Manufactured homes (i.e. mobile homes), unlike traditional homes, must be built on a permanent chassis and have the ability to move to different locations. This creates an issue of whether manufactured homes are considered chattel (i.e. personal property such as a car) or real property (i.e. unmovable property such as a building). For most lenders, manufactured homes are considered chattel, which can limit financing options for homeowners.
Currently, companies that offer financing for manufactured homes maintain a security interest until the home is paid off. Without this protection, consumers would have few, if any financial options. AB 379 would allow a manufactured home to be “converted” into real property, ultimately protecting financing options for consumers purchasing a manufactured home.
AB 379 was inspired by a recent court case, Vieira Enterprises v. City of East Palo Alto. Vieira Enterprises filed a lawsuit against its property owner for failing to pay fees associated with the delivery and installation of two manufactured homes on real property. The Court of Appeals ruled in opposition of Vieira Enterprises, citing that the company had no security interest in the homes because the homes were considered real property. This ruling allowed the borrower to forgo paying the balance of the home. Further, the ruling discouraged lending efforts to consumers interested in purchasing manufactured homes.
By allowing manufactured homes to be converted into real property, AB 379 removes the legal ambiguity that resulted from the Vieira case and helps ensure that loans to consumers who purchase manufactured homes will continue to occur.
“The goal of this bill is to protect consumers and clear up any confusion that exists between whether a manufactured home is considered real property or personal property,” said Assemblymember Brown. “I believe consumers should have access to reliable financing and I’m proud that my colleagues supported me by passing this bill.”
Assemblymember Cheryl R. Brown represents the 47th Assembly District, which includes Colton, Fontana, Grand Terrace, Rialto, San Bernardino, and the unincorporated communities of Bloomington and Muscoy.
Website of Assemblymember Cheryl R. Brown: http://www.asmdc.org/members/a47/.
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