Change Kentucky Law to Allow for a Title to a Manufactured Home to be Obtained for a Previously Surrendered Title Due to Conversion to Real Estate WILL BECOME EFFECTIVE JULY 2017!!!
So please take a minute to send a thank you note to your legislator and while you’re at it, write a thank you note to Representative DJ Johnson, the primary bill sponsor. Click here find your Legislator’s Information and for D.J. Johnson’s Information
Manufactured housing is home to 17 million Americans and is the largest single source of unsubsidized affordable homeownership. Manufactured homes represent an important source of affordable housing for Kentuckians, accounting for 13.6% of the state’s overall residential stock.
- Current Kentucky law contains provisions that allow for a title to a manufactured home to be surrendered and the home and the land it is on to be united and converted to real estate. The home is from that point on legally attached to the land and classified as real property.
- There is currently no provision in Kentucky law that provides for the reversal of this legal process. The fact that there is no such reversal provision can hinder future economic transactions with regards to manufactured homes and can harm entities and people doing business or selling these types of residences in Kentucky.
- Consider the example of a new manufactured home placed on 10 acres five years ago. The homeowners wish to sell their current home and remain on the land and purchase or build a new home as their economic and family circumstances changed throughout their life. Without a title, the homeowners cannot get fair market value for the home.
- A lender would benefit from the ability to potentially sever a manufactured home from the land in a foreclosure. A change in the law could make lending funds on manufactured homes in Kentucky more appealing to the lenders, which could potentially result in more families qualifying for loans which would allow them to own homes. More manufactured housing transactions within the state would increase sales tax revenues, income tax revenues and property tax revenues.
- Current Kentucky Law dealing with the conversion to real estate is found at KRS 186A.297 Filing of affidavit of conversion to real estate when manufactured home is permanently affixed to land.
Surrender of certificate of title.
(1) When a manufactured home is or is to be permanently affixed to real estate, the owner may execute and file an affidavit of conversion to real estate with the county clerk of the county in which the real estate is located. The affidavit shall attest to the fact that the home has been or will be permanently affixed to the real estate and be accompanied by a surrender of the Kentucky certificate of title. The county clerk shall file the affidavit of conversion to real estate in the miscellaneous record book.
(2) A county clerk shall not accept a surrender of a Kentucky certificate of title which displays an unreleased lien unless it is accompanied by a release of the lien. When the county clerk files the affidavit of conversion to real estate, the county clerk shall furnish a copy to the property valuation administrator for inclusion in the real property tax rolls of the county. A filing of an affidavit of conversion to real estate and a surrender of a Kentucky certificate of title shall be deemed a conversion of the property as an improvement to the real estate upon which it is located.
Many states have provisions and processes in their laws to provide for the reversal of the real estate conversion. These states include Arkansas, Alabama, Arizona, Colorado, Florida, Idaho, Illinois, Iowa, Louisiana, Michigan, Minnesota, Montana, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, as well as pending legislation in West Virginia. Please note that this is not an all-inclusive list. After so many states were found to have these provisions, it seemed redundant to continue the research into this issue. Many of these states require an Affidavit of Severance to be filed at the appropriate County Clerk’s office.