[Legislativecommittee1] FW: MH Title Change Bill

Fri Oct 11 15:38:51 PDT 2024

Thanks George – this is really thorough!  Is there a way they could draft the bill where it would be workable with WACIOWA?  Or is the problem the cooperative in general?  I’m just trying to figure out if there would be another way for them to accomplish what they need to accomplish through legislation – and we could be helpful to them in doing so – or whether we simply have to oppose the bill.

Looking at this through a political lens, housing and the housing shortage is a real problem and is a top priority for the legislature.  They are particularly concerned about helping people from disadvantaged communities attain home ownership.  So I am guessing they will have quite a bit of political support.

Perhaps we should schedule a legislative committee meeting to discuss this more?

Thanks,

Carrie

Carrie Tellefson, JD, President
Sound Government Solutions
3110 Ruston Way, Suite F
Tacoma, WA 98402
253-576-9908 (cell)

[cid2387524142*81be06f7-0e2f-4cbb-ba84-52a5c8d90d15]

From: Legislativecommittee1 <legislativecommittee1-bounces at washingtonlandtitle.com> on behalf of George Peters <execdirector at washingtonlandtitle.com>
Date: Friday, October 11, 2024 at 12:03 PM
To: 1 WLTA Legislative Committee <legislativecommittee1 at washingtonlandtitle.com>
Subject: [Legislativecommittee1] FW: MH Title Change Bill
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
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
execdirector at washingtonlandtitle.com<mailto:execdirector at wltaonline.org>

[WLTA Logo w-Ring Blue 1a][cid:image002.jpg at 01DB1B38.CA9D5A30]
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
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
execdirector at washingtonlandtitle.com<mailto:execdirector at wltaonline.org>

[WLTA Logo w-Ring Blue 1a][cid:image002.jpg at 01DB1B38.CA9D5A30]
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 <victoria at nwcdc.coop<mailto:victoria at nwcdc.coop>>
Sent: Wednesday, October 2, 2024 2:40 PM
To: George Peters <execdirector at washingtonlandtitle.com<mailto: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
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
execdirector at washingtonlandtitle.com<mailto:execdirector at wltaonline.org>

[WLTA Logo w-Ring Blue 1a][cid:image002.jpg at 01DB1B38.CA9D5A30]
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<mailto:execdirector at washingtonlandtitle.com>>
Sent: Thursday, September 19, 2024 4:03 PM
To: 'Victoria O'Banion' <victoria at nwcdc.coop<mailto: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
Mail: PO Box 328, Lynnwood, WA 98046
Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036
206-437-5869 (Mobile)
206-260-4731 (Fax)
execdirector at washingtonlandtitle.com<mailto:execdirector at wltaonline.org>

[WLTA Logo w-Ring Blue 1a][cid:image002.jpg at 01DB1B38.CA9D5A30]
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 <victoria at nwcdc.coop<mailto:victoria at nwcdc.coop>>
Sent: Wednesday, September 18, 2024 3:05 PM
To: execdirector at washingtonlandtitle.com<mailto: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
www.rocnorthwest.com<http://www.rocnorthwest.com>

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