Manufactured housing: classification as real property.

(1) The Mobilehome Parks Act requires the Department of Housing and Community Development to establish regulations for manufactured home, mobilehome, and commercial modular foundation systems. Existing law authorizes a manufactured home, mobilehome, or commercial modular to be installed on a foundation system as either a fixture or improvement to the real property if certain conditions are met. In this regard, existing law requires, among other things, a manufactured home, mobilehome, or commercial modular owner or licensed contractor to obtain a building permit from the appropriate enforcement agency before installing the manufactured home, mobilehome, or commercial modular on a foundation system by, among other things, submitting written evidence acceptable to the enforcement agency that the manufactured home, mobilehome, or commercial modular owner owns, holds title to, or is purchasing the real property where the mobilehome is to be installed on a foundation system. Existing law specifies that a lease held by the owner, that is transferable, for the exclusive use of the real property where the manufactured home, mobilehome, or commercial modular is to be installed, is deemed to comply with that requirement if the lease is for a term of 35 years or more, or if fewer than 35 years, for a term mutually agreed upon by the lessor and lessee, and the term of the lease is not revocable at the discretion of the lessor except for cause, as specified. A willful violation of these provisions is a crime. This bill would authorize a manufactured home, mobilehome, and commercial modular owner or licensed contractor to also submit written evidence acceptable to the enforcement agency that the manufactured home, mobilehome, or commercial modular owner has a transferable exclusive occupancy right to the real property where the unit is to be installed on a foundation system. The bill would also include a proprietary occupancy agreement held by the manufactured home, mobilehome, or commercial modular owner that meets the above-described criteria among the agreements described above that are deemed to comply with that requirement. The bill would, in addition to the provisions described above, authorize a manufactured home or mobilehome to be classified as real property for purposes of titling, taxation, and the perfection of real property security interests, as specified, if certain conditions are met. In this regard, the bill would require, among other things, that the homeowner holds a transferable, exclusive occupancy right to the homesite under a lease or proprietary occupancy agreement with a remaining term of not fewer than 30 years, which is not revocable at the discretion of the lessor, except for cause, as specified. The bill would require a manufactured home or mobilehome classified as real property pursuant to the bill's provisions to be taxed as real property, and any deed of trust or mortgage encumbering the real property to constitute a lien upon the unit and the leasehold or other occupancy interest, as specified. The bill would specify that nothing in these provisions is to be construed to alter, waive, or supersede underwriting, collateral, or securitization requirements of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, as specified. The bill would require the department, on or before January 1, 2028, to, among other things, adopt or update regulations, forms, and guidance to implement these provisions, as specified. The bill would require local enforcement agencies to, among other things, accept applications for installation and classification pursuant to the above-described provisions authorizing a manufactured home, mobilehome, or commercial modular to be installed on a foundation system as either a fixture or improvement to the real property and the above-described provisions authorizing a manufactured home or mobilehome to be classified as real property. The bill would require the department upon recordation of certain forms relating to the above-described provisions to cancel registration of the manufactured home or mobilehome and to notify the county assessor. (2) The California Constitution requires that all property be taxed at the same percentage of fair market value, except as otherwise provided by the California Constitution or federal law, and establishes the State Board of Equalization with prescribed duties relating to taxes imposed on property under these provisions. Among other things, existing law requires the board to prescribe rules and regulations to govern local boards of equalization when equalizing, and assessors when assessing, and to prepare and issue instructions to assessors designed to promote uniformity throughout the state and its local taxing jurisdictions in the assessment of property for the purposes of taxation, as provided. This bill would require the board, on or before July 1, 2027, to issue a Letter to Assessors and to update specified portions of the Assessors' Handbook to reflect the changes made by this bill, as described above. (3) Existing law, The Manufactured Home Property Tax Law, establishes a process governing the taxation of manufactured homes, including mobilehomes, as defined. That law requires the county tax collector, upon application, to issue a tax clearance certificate or a conditional tax clearance certificate if specified requirements are met. Among other things, that law requires a tax clearance certificate issued to be used to permit registration of used manufactured homes and for other purposes prescribed by the Controller. That law excludes a manufactured home that has become real property by being affixed to land on a permanent foundation system pursuant to The Mobilehome Parks Act and is taxed as all other real property is taxed. This bill would additionally exclude from The Manufactured Home Property Tax Law a manufactured home that has been classified as real property pursuant to the Mobilehome Parks Act under the bill's provisions, as described above. The bill would require county assessors to accept certain forms relating to the classification of a manufactured home as real property pursuant to the above-described provisions as conclusive evidence for the classification of a manufactured home as real property under The Manufactured Home Property Tax Law. (4) The bill would make findings and declarations related to its provisions. (5) By imposing additional duties on local enforcement agencies and county assessors with respect to the regulation and taxation of manufactured housing, and by expanding the scope of a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.