Perfecting Security Interests in Manufactured Homes

Unsure about perfecting a security interest in a manufactured home? Professor James P. Nehf discusses the relationship between Article 9, certificate of title laws, and real estate recording systems.
Prof. Nehf writes: Perfecting security interests in a manufactured home, and maintaining perfection over time, can be confusing because in most states manufactured homes are covered by certificate of title laws as well as Article 9. Moreover, when a manufactured home is attached to the land, it may become a fixture and real estate law may become applicable. This Commentary discusses how the Uniform Commercial Code deals with manufactured homes and how the Code attempts to simplify the process of perfecting security interests and maintaining perfection as time passes.

Analysis. Article 9 of the U.C.C. directly addresses the subject of manufactured homes, defining the term and setting out a framework for deciding perfection and priority issues. The Code seeks to resolve some of the complicating issues that arise in these transactions, which in most states are governed not only by Article 9, but also by certificate of title and real estate laws.

Definition. The law governing security interests in manufactured housing is complex, in part because state law is not always consistent in defining the relevant terms. Most states cover manufactured housing under their certificate of title laws, but definitions of manufactured housing differ, and the laws may cover mobile homes, modular homes, trailer homes and the like. Article 9 seeks to provide definitional certainty by following the definition of manufactured home in the federal Manufactured Housing Act, 42 U.S.C. § 5402(6), which requires a minimum dimension of either eight feet in width, 40 feet in length, or square footage totaling at least 320, thus eliminating small trailers from the definition. U.C.C. § 9-102(a)(53). Moreover, the housing must be built on a permanent chassis and be designed for use as a dwelling when connected to utilities with our without construction of a foundation. Thus, it does not include self-propelled recreational vehicles.
[footnote omitted]