SB 0843 Allows a landlord to have a security interest in abandoned manufactured homes for unpaid rent and revises procedures
LR Number:3266S.05P Fiscal Note:3266-05
Committee:Insurance and Housing
Last Action:04/24/02 - Hearing Scheduled But Not Heard H Civil & Journal page:
Administrative Law Committee
Title:SS SCS SBs 843 & 658
Effective Date:August 28, 2002
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Current Bill Summary

SS/SCS/SBs 843 & 658 - This act requires mobile home park landlords to provide tenants who own their homes 120 days notice when the landlord requires them to move due to a change in use. During this period, the landlord shall not increase the rent except for a rent increase based upon increased property taxes.

Under this act, a manufactured home dealer may have his or her license suspended or revoked for failing to provide notice to a purchaser of a used manufactured home that the Public Service Commission does not regulate setup of used manufactured homes.

This act allows owners of manufactured homes who own the home as joint tenants with the right of survivorship or as tenants by the entirety to receive a certificate of ownership in beneficiary form from the Director of the Department of Revenue. The owner may request the director to transfer the certificate to the beneficiaries. During the lifetime of the owners, the signature of the beneficiary shall not be required for transactions relating to the manufactured home. The owner may revoke the certificate of ownership or change beneficiaries before the death of the owner under certain conditions (1. Sale of ownership in home with proper assignment of certificate or 2. Reissuance of certificate or redesignation of beneficiary with the Director). A beneficiary's interest in the home shall be subject to security interests which the owner accrued during his or her lifetime. A beneficiary interest in a certificate of ownership may not be changed or revoked by will or other instruments. The Director shall issue a new certificate of ownership to the surviving owners or beneficiaries upon proof of death.

This act sets forth what a notice of lien must contain (name, address, etc.) and lists the requirements for perfecting a lien on future advances. This act requires the Director to establish a security procedure for verifying electronic notice of liens on manufactured homes.

This act allows a lienholder to elect the Director of Revenue to retain possession of an electronic certificate of ownership. If a lienholder has elected for the Director to retain possession of an electronic certificate of ownership, the lienholder authorize the director to add a subordinate lienholder to the certificate. If the certificate of ownership is being electronically retained by the Director, an original lienholder may deliver a notice of assignment of the lien to the director. The director shall note such assignment upon the electronic certificate. This act requires a lienholder to notify the director within 10 business days of any release of a lien if the electronic certificate is being held by the director. The director shall note the release on the electronic certificate and deliver the certificate free of any lien to the owner if no other lien exists.

This act requires persons who hold a security interest in manufactured homes to verify to the Department of Revenue that he or she has paid the landowner in which the manufactured home was repossessed from all past due rent that the holder is obligated to pay under this act. Under this act, a manufactured home situated upon land of another person pursuant to a rental agreement shall be deemed abandoned if the property owner reasonably believes the homeowner has vacated the premises and does not intend to return and the rent is past due for 30 days and the homeowner has failed to respond to the landowner's notice or has failed to contest a petition regarding the issue of abandonment.

Under this act, a landowner shall have a lien against an abandoned manufactured home for unpaid rent. The process for enforcing the lien on unpaid rent is modified under the act. The landowner must provide the manufactured home owner notice before enforcing the lien. The landowner must give the home owner opportunity to redeem the home by paying all unpaid rent. The notice must also advise the home owner of his or her legal rights and that the home owner may contest the lien filing by filing a petition to that affect in the county circuit court in which the home is located. If the home owner does not redeem the home within 30 days of the notice or the home owner does not contest the lien within 10 days of receiving the notice, the title to the home will be transferred to the land owner. The land owner must apply for a certificate of title with the Department of Revenue. If the Director of the Department of Revenue is satisfied with the contents of the application, a certificate of title to the manufactured home will be issued to the land owner (captioned "lien title").

Upon receipt of the lien title, the holder shall within 30 days begin proceedings to sell the home. The owner of the home must be given at least 20 days notice of the sale of the home. The owner of the home may redeem the home by paying all past due rent and expenses. If not redeemed, the landowner may sale the home. The act sets forth how the proceeds of the sale are to be distributed. Any excess proceeds shall be paid to the homeowner. If the homeowner cannot be located within 30 days of the sale, the excess proceeds shall be deposited with the county treasurer. The county treasurer shall credit the excess to the county's general revenue fund, subject to the right of the homeowner to reclaim the excess within 3 years of its deposit. A landowner who follows the requirements of this section shall be absolved from any liability resulting from the taking of possession of the home.

The manufactured homeowner may, within 10 days of the mailing of the notice, may contest the real property owner's lien in the home. If the owner contests the lien in circuit court, he or she will have to post a bond for the unpaid rent in order to have the home released. Once the bond is posted, the court will direct the land owner to release the home to the home owner. The court will also determine whether unpaid rent is due. The court may direct that the rent be paid from the posted bond or grant the landowner a security interest in the home.

If a manufactured home is abandoned on a real property owner's land which is subject to another lien which is in default, the real property owner must give notice to the manufactured home owner and the party holding the lien. The notice must contain a statement that if the rent is not paid within 30 days from the mailing of the notice and the lien is not contested, the real property owner will have a lien against the home which will superior to the other party's perfected lien. The homeowner and the perfected lienholder shall not remove the home from the property until the landlord is paid for past due rent. The perfected lienholder is not entitled to a certificate of title from the Department of Revenue until the lienholder has paid all rent it is obligated to pay under this act. The owner of the abandoned home or the perfected lienholder may file a petition, within 10 days of the mailing of the notice, to contest the real property owner's lien.