[Legislativecommittee1] FW: MH Title Change Bill
George Peters
execdirector at washingtonlandtitle.com
Fri Oct 11 11:53:46 PDT 2024
Hi all. See my extensive comments below regarding the proposed changes to
the mobile home title elimination statute (preliminary draft also attached).
(I know it’s a lot, but I wanted to lay out as much as I could since I will
be on vacation starting next week. Read it through only if you have time.)
Initial concerns by me (and I talked to Lori Bullard about them) focused on
title insurability of cooperative “lots” and basically only talked about how
cooperatives are difficult to insure. My comments to Victoria on our phone
call didn’t address the fact that we have a statute (WUCIOA) that
contemplates insurability of cooperatives, including those with a mobile
home located on a unit. That occurred to me only after we talked.
I would say that because of this statute, other attempts to insure a
cooperative “unit” owner without compliance with WUCIOA is problematic. We
may be unique in that respect compared to other states.
I had asked Victoria for examples from other states, and she sent a New
Hampshire deed that did nothing in my mind to suggest that a title insurer
could insure a cooperative “unit” owner, whether or not title was
eliminated. Maybe other states are insuring mobile homes on cooperative
lots, but I am not aware of them.
If someone has a different take on any of this, feel free to share. But as
it stands, I would suggest not supporting a bill as contemplated here.
George
George Peters, WTP
Executive Director
Washington Land Title Association
<https://washingtonlandtitle.com> https://washingtonlandtitle.com
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
<mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com
This is a confidential communication intended solely for the named
recipient. If you are not the intended recipient, please destroy it and call
George Peters at 206-437-5869 immediately. Thank you.
From: George Peters <execdirector at washingtonlandtitle.com>
Sent: Friday, October 11, 2024 11:00 AM
To: 'Victoria O'Banion' <victoria at nwcdc.coop>
Subject: RE: MH Title Change Bill
Good afternoon, Victoria. Thanks for the opportunity to talk the other day,
and thank you for the document from New Hampshire. Sorry for the delay in
getting back to you.
I expressed my concerns when we talked, and have also discussed this in
general with a local underwriter, who shares those concerns. Bottom line is
that the proposed draft language for RCW 65.20 would not be sufficient by
itself to address title insurance requirements for insuring the interest of
the mobile home owner after title to a mobile home located on land owned by
a cooperative has been eliminated, unless the cooperative project is
subjected to and complies with our common interest community statute
(Chapter 64.90 RCW, “WUCIOA”).
The main issue is that the interest of the cooperative owner in any one
“lot” is typically not really insurable in the first place. This is entirely
independent of whether or not the mobile home title is eliminated. Put
another way, even if a “stick built” home was on the lot, it would still not
result in a title insurable interest in a cooperative community.
There needs to be a legal description based on a WUCIOA-created unit, which
needs to be in a title insurable lease from the cooperative to the coop
owner for a title insurance company to want to insure it. Few cooperatives
comply with WUCIOA, or provide such leases, or a legal description of the
parcel the cooperative owner occupies.
While a can’t speak for lenders, without title insurance, a lender would
likely not be interested in making a loan secured by the proprietary
leasehold interest and un-titled mobile home, at least using typical real
estate mortgage.
If a cooperative owns the land and the mobile home park documentation does
not comply with WUCIOA, the real property to which a mobile home will attach
after title elimination would still be owned by the coop and the mobile home
owner (particularly if there is no proprietary lease as contemplated by
WUCIOA) might not have a sufficient and exclusive interest in the land the
mobile sits on. Thus, the cooperative would arguably have an interest in the
mobile home. Maybe not the entire or only interest, but as the owner of the
land on which the mobile home sits it might have some interest. Put another
way, it’s not clear that if the mobile home tile is eliminated, whether the
owner will have the entire interest in the mobile home. This analysis might
depend on the nature of the lease and its legal description (whether or not
it was WUCIOA compliant) but without WUCIOA compliance a title insurer would
probably not delve into that analysis.
Even if the statute has language that states that the mobile home would
attain real property status free of the interest of the cooperative after
title elimination, it’s doubtful that it can reconcile the intertwined
interest of the cooperative and the mobile home owner in such a way that
would allow a title company to insure whatever interest the mobile home
owner has – again, unless the project complies with WUCIOA.
The use of a description similar to what is used for condos is not really
an option unless the cooperative complied with WUCIOA. WUCIOA is clear as to
the nature of a legal description for a cooperative unit, and if it doesn’t
comply with WUCIOA, using a similar legal description would not help.
WUCIOA is specific as to what constitutes a condo unit or a cooperative
project (including requiring significant map information and legal counsel
involvement in the preparation and recordation of the cooperative’s
declaration), and also specifies the actual language in a description of a
unit.
I don’t know if your project complies with this statute. As I note above,
the Washington statute does contemplate cooperatives as a form of land
ownership. If your project complies with WUCIOA, then some changes to the
statute you are looking at might then be helpful, but perhaps not necessary.
If your project doesn’t comply with WUCIOA, I don’t see how the changes
would make it title insurable.
I also note that some of the language in your draft suggests it comes from
another state (for example, referencing a register of deeds rather that a
recorder’s office). To the extent you want to pursue changes in this
statute, I would suggest looking changes in context of WUCIOA’s existing
language.
As an aside, the “legal description” in this deed from New Hampshire, taken
on its face, is just the manufactured home, as a stand-alone item. It also
doesn’t indicate that title to the manufactured home has been eliminated.
The reference to the mobile home details would suggest to me that title has
not been eliminated. At the same time, the use of a deed might suggest
otherwise, so there is an ambiguity that would be a problem in Washington
State. Further, a deed is likely not the appropriate title transfer in a
cooperative – rather a lease would be appropriate (again, see WUCIOA).
I don’t think other states have similar language relating to cooperatives
that WUCIOA does. WUCIOA was drafted to facilitate creation of a cooperative
that would allow title insurers to insure cooperatives and cooperatives with
mobile home on the individual units.
The bottom line: if (1) your project was a statutory cooperative under
WUCIOA, including the map requirements, and (2) title to a unit is conveyed
by an insurable lease, including the legal description, and (3) title to the
mobile home located in/on that unit is eliminated pursuant to the mobile
home statute, it may be insurable and without reference to the mobile home
in the legal description. I am not sure any changes to RCW 65.20 would be
necessary, and in fact some of the changes might create ambiguity, but
haven’t reviewed all the suggested changes in that context.
Feel free to let me know if you have any questions or comments on this
issue. I will be sporadically available over the next few weeks, but will
have access to email.
George
George Peters, WTP
Executive Director
Washington Land Title Association
<https://washingtonlandtitle.com> https://washingtonlandtitle.com
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
<mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com
This is a confidential communication intended solely for the named
recipient. If you are not the intended recipient, please destroy it and call
George Peters at 206-437-5869 immediately. Thank you.
From: Victoria O'Banion < <mailto:victoria at nwcdc.coop> victoria at nwcdc.coop>
Sent: Wednesday, October 2, 2024 2:40 PM
To: George Peters < <mailto:execdirector at washingtonlandtitle.com>
execdirector at washingtonlandtitle.com>
Subject: Re: MH Title Change Bill
Good Afternoon George,
Thank you for our conversation last week. I spoke with my colleagues in NH
who shared the attached recorded deed with the insurance legal description.
I also spoke with several lenders who assured me that the legal description
could reflect that used in condos.
Please let me know if you have any additional questions.
Thank you,
Victoria
On Tue, Sep 24, 2024 at 8:59 PM Victoria O'Banion <victoria at nwcdc.coop
<mailto:victoria at nwcdc.coop> > wrote:
Good Morning George,
Fresh off the press is the attached bill draft. Would you be able to
schedule a call for next week to talk through this proposed legislation?
Thanks!
On Fri, Sep 20, 2024 at 1:25 PM George Peters
<execdirector at washingtonlandtitle.com
<mailto:execdirector at washingtonlandtitle.com> > wrote:
Good afternoon, Victoria. Do you have proposed language for the bill you
are proposing? We’d love to be able to review it as soon as possible, even
if it’s a very preliminary early draft.
Thanks!
George
George Peters, WTP
Executive Director
Washington Land Title Association
<https://washingtonlandtitle.com> https://washingtonlandtitle.com
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
<mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com
This is a confidential communication intended solely for the named
recipient. If you are not the intended recipient, please destroy it and call
George Peters at 206-437-5869 immediately. Thank you.
From: George Peters < <mailto:execdirector at washingtonlandtitle.com>
execdirector at washingtonlandtitle.com>
Sent: Thursday, September 19, 2024 4:03 PM
To: 'Victoria O'Banion' < <mailto:victoria at nwcdc.coop> victoria at nwcdc.coop>
Subject: RE: MH Title Change Bill
Importance: High
Good afternoon, Victoria, and thanks for your inquiry.
We would be happy to look at any bill that you propose for the upcoming
legislative session. Our Legislative Committee reviews all bills that might
affect real property and in particular those that might affect title
insurance and escrow closings. I will pass your email along, and you may
hear from someone on the committee.
In the meantime, if you have any bill language that you are considering,
even if it’s just in preliminary draft form, please also send that along to
me. We would very much like to see it in advance of it reaching committee
stage.
George
George Peters, WTP
Executive Director
Washington Land Title Association
<https://washingtonlandtitle.com> https://washingtonlandtitle.com
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
<mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com
This is a confidential communication intended solely for the named
recipient. If you are not the intended recipient, please destroy it and call
George Peters at 206-437-5869 immediately. Thank you.
From: Victoria O'Banion < <mailto:victoria at nwcdc.coop> victoria at nwcdc.coop>
Sent: Wednesday, September 18, 2024 3:05 PM
To: <mailto:execdirector at washingtonlandtitle.com>
execdirector at washingtonlandtitle.com
Subject: MH Title Change Bill
Good Afternoon Mr. Peters,
I am working with several representatives on a bill that would allow
residents in manufactured home communities to change the title of their home
from personal to real property. I have spoken with the Department of
Revenue, the Department of Licensing, and the Department of Commerce. All of
the agencies have no initial objections to the concept.
The goal with this statute change would be to allow residents in
cooperatively owned manufactured home communities the ability to access
Title II loans. Fannie Mae has been securing loans to homeowners
cooperatively owned manufactured home communities in New Hampshire since
2008 and they are eager to expand the program. In talking with my colleagues
in Minnesota who recently passed similar legislation I was encouraged to
reach out to your organization. We want to ensure that mortgage insurers are
comfortable with the cooperative model.
Would you be available to schedule a call for the first week of October?
Thank you,
Victoria
--
Victoria N. H. O'Banion (she/her/hers)
Cooperative Housing Development Manager
Northwest Cooperative Development Center
<http://www.rocnorthwest.com> www.rocnorthwest.com
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