December 2013 www.invtitle.com 1

Many years ago, while in private practice, I

represented several clients who owned and lived in

“mobile” homes. Those structures were designed

and built for the purpose of being transported from

one location to another over state highways. As

such, these “mobile

homes” fell under the

jurisdiction of the

Division of Motor

Vehicles (DMV) and

became subject to the

registration and titling

requirement of other vehicles using state roads.

Except for recreational vehicles, the concept of a true “mobile home” or residence is largely a thing of the past. Today, we more appropriately deal with “manufactured homes” which are defined by statute.

1

In most instances today, the sale and affixation of a manufactured home to real property is accomplished without registration or titling through the DMV; however, the actual or potential existence of a DMV certificate of title related to a manufactured home

The Manufactured Home Making it Real (Property) by David Bennington SVP—Sr. Title Attorney daben@invtitle.com

continues to be a problem for closing attorneys and title insurers.

In most instances, a closing attorney is expected to

satisfy both purchasers and lenders that existing

improvements on a tract of land constitute real

property such that ownership to the improvements

are conveyed by deed and subject to the lien of the

lender’s deed of trust.

The fact that improvements which are or were

subject to a separate process by which they are titled

as personal property has been and continues to be a

challenge. The potential for an existing DMV

certificate of title

constitutes one of the

two essential factors

involved in

establishing the

“manufactured home”

as real property and

not as personal

property. The second

factor is founded in the

law of fixtures which,

stated simply, requires

items be affixed to the

land with the intent of

the landowner for the

(Continued on page 2)

The Manufactured Home

1-3

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NC Fun Facts 4

Investors Trust: Gilmore v. Gilmore

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Fall Gathering 5

Risk Management Seminars

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THE NC CONNECTION An Investors T i t le Publ icat ion

We Know North Carolina.

“...the concept of a

true ‘mobile home’…

is largely a thing of the

past...”

1143-143.9(6)

December 2013 www.invtitle.com 2

item become real property.

This second factor, the intent to affix, is within the

control of the landowner at all times and is not

subject to further action or consent. It should be

evidenced, however, in the public records such that

the title examiner may rely upon it.

The first factor, the potential for the DMV certificate

of title is more problematic. If there is no DMV

certificate of title, then the affixing of the

(Continued from page 1)

THE NC CONNECTION An Investors Title Publication

manufactured home with the requisite intent would

end the process. The home then becomes real

property. If a DMV title is outstanding, however, the

affixation alone is not sufficient. The DMV certificate

of title may continue to be transferred independently

from the real property and subjected to liens which

would take priority over subsequent purchasers for

value or lien creditors of the underlying real property.

Establishing the manufactured home as real property

(Continued on page 3)

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The Investors Title Team (from left to right): Jimmy Bryan, Marc Garron, Charity Taylor, Allen Fine, David Bennington, Drew Foley

December 2013 www.invtitle.com 3

of record is also critical to the coverage under a title

insurance policy issued for the land on which the

home is situated.

Under the ALTA Loan Policy (6-17-06) the definition

of “Land” includes the following:

“Land”: The land described in

Schedule A, and affixed

improvements that by law constitute

real property.

North Carolina took a major step to address the

potential title problem involving manufactured homes

by enacting NCGS 47-20.6 and the companion

statute 47-20.7. These statutes provide a means to

establish that manufactured homes are real property

of record by the recording of a Declaration of Intent

in the Office of Register of Deeds. The statute has

the further effect of establishing that liens upon the

real property will include the manufactured home and

that all future liens must be perfected in the same

manner as a lien on real property.

As helpful as the Declaration of Intent is for

establishing the title, it nevertheless requires the

declarant to address the two issues discussed

above. Affixation and intent should not create a

problem because, as previously stated, those facts

are within the control of the current landowner.

The Declaration of Intent, however, also requires the

declarant to establish that there is no DMV certificate

of title or that any existing DMV title will be cancelled

-- therein lies the continuing problem.

The examining attorney often determines that there

is an outstanding DMV certificate of title issued for

the manufactured home located on the subject

property and, worse yet, that the title was issued to a

prior owner of the real property or even to a stranger

to the title. In some cases, the holder of the DMV

title is several links back in the chain of title.

Locating these prior owners and obtaining their

cooperation in cancelling the DMV certificate of title

is a difficult task under the best of circumstances, a

nightmare at other times, and sometimes simply

impossible.

(Continued from page 2) Resolving this dilemma might require litigation to

clear the DMV certificate of title which involves time

and money. If you have found yourself in this

situation, you know it is an unhappy place to be.

Now there is more good news on this front thanks to

the action of the General Assembly. The legislature

recently enacted amendments to NCGS 20-109.2,

effective July 1, 2013, which facilitate the

cancellation of DMV certificate of titles on

manufactured homes where the original owner is

unavailable to surrender the certificate.

The recent amendments have the effect of giving the

current landowner control over the second essential

factor by facilitating the surrender of the DMV

certificate of title by means of an affidavit executed

by the landowner where the original owner of the

manufactured home is not available.

The affidavit shall be in a form approved by the Commissioner of the Division and shall provide information identifying the manufactured home and a legal description of the real property to which it is affixed.

2 The affidavit must also affirmatively state

that the affidavit is given for the purpose of deeming the “title” surrendered and that notice of the proposed cancellation has been delivered or mailed to the last known address of the owner shown on the certificate of title. The affidavit must be accompanied by a property tax record which shows that the manufactured home is listed as real property for ad valorem taxes in the name of the affiant. Upon submission of the affidavit and tax information, the DMV will cancel the certificate of title unless it shows on its face that one or more parties claim a lien on the manufactured home, in which case the cancellation will be completed only with the written consent of the secured parties.

The new procedure under NCGS 20-109.2 is not a

magic bullet or cure-all for problems with older

manufactured homes subject to a certificate of title,

but it does provide an extremely useful tool for many

situations in which a closing attorney must establish

that the home is now real property.

2The affidavit is available at www.ncdot.gov/dmv/online. (Reference- MVR-46G)

THE NC CONNECTION An Investors Title Publication

December 2013 www.invtitle.com 4

From Acorns to Pickles—Happy New Year!

North Carolina celebrates New Year’s Eve with many unique traditions. Below are just a few.

Black Creek: a large red heart drop represents "A Small Town with a Big Heart.”

Brasstown: a plexiglass pyramid containing a living opossum is lowered from the roof of Clay Logan's

convenience store for The Possum Drop. The possum is turned loose at the end of the celebration.

Eastover: a three-foot tall, thirty-pound wooden flea is dropped.

Carolina Beach: a giant lighted beach ball is dropped at midnight.

Charlotte: a lighted crown is raised 25 feet in the air at the stroke of midnight to represent the

Queen City.

Mount Olive: the New Year's Eve Pickle is lowered down the Mt. Olive Pickle Company flagpole at 7 pm EST, midnight

Greenwich Mean Time.

Oriental: beside the harbor, locals and visitors chase a huge, golden Chinese dragon with a flame-filled, smoke-

snorting head.

Raleigh: a 900-pound copper-and-steel acorn, designed by sculptor David Benson to celebrate the city's 1992

Bicentennial and Raleigh’s nickname, “The City of Oaks,” is lowered by a crane.

THE NC CONNECTION An Investors Title Publication

In a case with a rare fact pattern, the North Carolina Court of Appeals has upheld a lower court’s decision to dismiss a complaint against three defendants who allegedly committed perjury when they submitted a fraudulent Will for probate. The case developed after Jackie Gilmore died in

December 2011. Following Gilmore’s death, his surviving spouse and two apparent witnesses sought to submit his Will for probate. According to the plaintiffs, however, not only had Gilmore not signed the document that was submitted, he also never

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Investors Trust Company: Gilmore v. Gilmore

This article is for informational purposes only and does not constitute legal advice.

asked the two witnesses to sign a Will on his behalf. After the clerk accepted the document as Gilmore’s Will, the plaintiffs filed a motion to revoke probate, arguing that the Will was fraudulent. During a court hearing on the validity of the Will, the three proponents testified under oath that the Will was, in fact, valid and that it had been properly executed under state law. That testimony led the plaintiffs to file additional claims of fraud and racketeering in this case—a civil action against the widow and the alleged witnesses. But in August 2012, the trial court dismissed the plaintiffs’ civil claims of fraud and racketeering because, the court concluded, they failed “to state a claim upon which relief may be granted.” In making that ruling, the lower court ruled that both perjury and subornation of perjury (i.e., encouraging someone to commit it) were criminal offenses and that, even if those charges could be proven, they “do not give rise to a civil cause of action.” The appellate court agreed, and affirmed.

--Gilmore v. Gilmore, No. COA12-1426, N.C. Ct. App. 9/3/13

NC FUN FACTS

“The Fall Gathering continues to be extremely

helpful to my practice by assisting me to stay

current in my main area of practice.”

~Kevin Gorham, Maddox and Gorham

“Great classes. Great teachers. Great staff. Great

food. What more do you need in a CLE?” ~Ashley Warner – Perry, Perry & Perry

Outstanding venue. ~Kenneth L. Eagle - Morris, Russell, Eagle & Worley, PLLC

I'm convinced that

Investors Title has

our best interest at

heart.

~James W. Thompson, Esq.

Not only was the facility excellent

but the classes were the best yet.

~Michael R. Isenberg, Jess Isenberg & Thompson

It could not have been better. ~Gregory L. Kunkleman, Wishart and Norris PA

...the best CLE event I

have attended. I very

much enjoyed the

CLE—each speaker...

was knowledgeable and

able to convey

information in a manner

I found very efficient and

helpful.

~Bobby J. Stricklin, Stricklin Law

Firm, P.A.

*Photos courtesy of: http://www.rizzoconferencecenter.com

*

ASHEVILLE  >  Thurs, March 20 

Renaissance Asheville 

FAYETTEVILLE >  Tues, March 18 

Holiday Inn Faye eville‐Bordeaux 

WILMINGTON  >  Thurs, March 13 

Hilton Wilmington Riverside 

Comfort Inn On the Ocean 

KILL DEVIL HILLS >  Wed, March 12 

Hilton Greenville 

GREENVILLE  >  Tues, March 11 

One Eleven Place 

TRIANGLE (CARY) >  Tues, Feb 18 

Crowne Plaza Charlo e Execu ve Park 

CHARLOTTE  >  Wed, Feb 12 

Joseph S. Koury Conven on Center 

GREENSBORO  >  Tues, Feb 11 

YOU ASKED ... Marcus G. Garren — Vice President & Title Attorney

One of the most important parts of our job, as title attorneys at Investors Title, is being available to answer your questions. This discussion will address the real estate related topics that are most frequently asked about. Don’t worry, we won’t disclose who asked a particular question!

ALTA BEST PRACTICE #3—FROM INTRODUCTION TO IMPLEMENTATION: PROTECTION OF NON-PUBLIC PERSONAL INFORMATION Jonathan W. Biggs

With the creation of the CFPB and the heightened scrutiny over the protection of Non-Public Personal information, ALTA Best Practice #3 offers guidance on new ways to protect financial information from threats foreign and domestic. During this hour, we will explore compliant ways to protect confidential information for your client and your practice.

THE TWILIGHT ZONE OF CYBER FRAUD & ESCROW THEFT (ETHICS) Stephen B. Brown, Sr. — VP Communications & Market Development and Title Attorney

Follow the tales of 8 victims of cyber fraud and escrow theft as they found themselves transferred from their everyday life as a title professional into the Twilight Zone of Cyber Fraud and Escrow Theft!  

ALTA BEST PRACTICE #2—FROM INTRODUCTION TO IMPLEMENTATION: TRUST ACCOUNT CONTROLS Jonathan W. Biggs, Esq. — VP Director of Risk Management and Education

In this hour, we will explore the new Consumer Financial Protection Bureau (CFPB) regulatory initiatives and heightened scrutiny related to the safe keeping of entrusted funds and the ALTA Best Practice #2 concerning controls and precautions that you should consider for your office.

FORECLOSURE ISSUES: A CONTINUING PROBLEM FOR THE CLOSING ATTORNEY AND PARALEGALS Stephen B. Brown, Sr.

This session will deal with the basic issues that must be identified in any closing on any property which has been foreclosed upon and will provide particular examples of problems we have encountered.

ALTA ENDORSEMENT FORMS UPDATE Charity Taylor — VP Commercial Services Division & Title Attorney

This session will review the newer ALTA endorsement forms and the recent changes to existing ALTA endorsement forms. Applicable to both the residential and commercial practitioner, this discussion will focus on utilizing the newer ALTA endorsement forms to build policy coverage tailored to the client’s needs and the particulars of any given transaction.

QUESTIONS? Contact Johanne Hindman jhindman@invtitle.com 800.326.4842

SEMINAR DETAILS Registration — 8:30 am Sessions 1-3 — 9 am to 12:15 pm Lunch — 12:15 to 1 pm Sessions 4-6 — 1 to 4:15 pm

Don’t miss this important overview of issues and regula ons that may affect your real estate prac ce!  

6 Hours of CLE/CPE (with an Ethics hour) | Presented by Investors Title  A orneys $150 | Paralegals & Staff $50 | Register & Pay Online | inv tle.com/events/nc  

Click on a loca onbelow to register!