Court Rules against MH Dealer

Jdspra reports from California a ruling by the California Court of Appeals could have lasting negative effects on the manufactured home industry. Vieira Enters., an authorized dealer of Fleetwood Manufactured Homes, sold a factory-built home to a private landowner with the contractual stipulation that the home will not be considered personal property until it is paid for in full, regardless of its being affixed to land, whereupon under California law it could be considered real property. Vieira completed its part of the deal but the mortgage holder did not pay in full, and asked the city, E. Palo Alto, to file a “Notice of Installation,” which legally converted the manufactured home from a “fixture” to an “affixed” part of the land. The house and land were foreclosed upon and sold. Vieira filed suit against the city, claiming the “Notice of Installation” constituted a taking and deprived the company of just compensation. At the same time, Vieira also filed a mechanic’s lien, which, unlike a “taking,” can only be filed against real property. In any case, the court of appeals ruled against Vieira, saying the house had become real property because it was affixed to the land. MHProNews has learned the California Manufactured Housing Institute, in a friend of the court brief, argued in favor of Vieira and noted the ruling could provide a major hurdle to the MH industry in CA. An appeal is expected. For more information, please click here.

(Image credit: CNNMoney)

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