Bulletin: CA000026

Dear Associates:

The CLTA manual contains an excellent discussion of mobile/manufactured homes, commencing with Section 37B.00. Changes in the law, effective 1/1/84, made the conversion of mobile/manufactured homes from personal property to real property possible. As these changes are still somewhat contemporary, it is not unreasonable to expect some of the mobile/manufactured homes we encounter to have been in place for many years, yet never properly converted to real property pursuant to the Health and Safety Code.

Stewart Title Guaranty Company does not want to take the position that these mobile/manufactured homes are real property due to the passage of time, even if it appears that the mobile/manufactured homes may, in some cases, be on permanent foundations. If insurance is requested by the lender in the form of a 116 or 116.5 Endorsement when the mobile/manufactured home has not been properly converted to real property, we do not want to directly or indirectly insure the mobile/manufactured home as real property.

If asked to issue the standard 116 endorsement for a mobile home or if asked to issue a standard 116.5 for a manufactured home, the standard 116 or 116.5 endorsements may be issued provided the conversion procedures outlined in section 37B.04 of the CLTA manual are followed. If the lender requests either the standard 116 or 116.5 endorsement and the conversion procedures outlined in CLTA manual section 37B.04 have not been followed, the enclosed ?Modified 116 Mobile/Manufactured Home? endorsement may be issued for either the mobile home or manufactured home if:

1. An inspection of the Land shows that at the close of escrow, the mobile/manufactured home is actually located on the property. Said inspection report should remain in the title file and;
   
   
2. We have a written acknowledgment from the lender that the lender understands that by the issuance of the Modified 116 endorsement, Stewart Title Guaranty Company is insuring the mobile/manufactured home is located on the premises. However, Stewart Title Guaranty Company is not insuring that 1) the mobile home is real property or 2) the lien of the deed of trust encumbers the mobile/manufactured home.

Note to title personnel:

If the lender decides to secure the loan for the mobile/manufactured home, and the mobile/manufactured home has not been properly converted to real property, a UCC-1 is one way to do so.