Manufactured Homes: Real Property or Personal Property?
An assessor is reviewing a 60-site manufactured home community. The park owns the land, roads, water and sewer lines, and a community clubhouse. Forty-five homes are owned by residents. Of those, 20 sit on permanent concrete foundations, have wheels and hitches removed, and have had their state titles surrendered and recorded with the county; 25 remain titled as personal property and are on rented pads. Fifteen homes are owned by the park and rented to tenants; all are on permanent foundations with titles surrendered. State law provides that a manufactured home is real property only if it is affixed to a permanent foundation and the title has been surrendered. The owner requests that the 25 tenant-owned titled homes be removed from the real property roll, arguing they are personal property. The assessor must classify the property and respond to the owner's request.
1. Classify each of the three groups of manufactured homes-20 tenant-owned with surrendered titles, 25 tenant-owned with active titles, and 15 park-owned with surrendered titles-and explain the legal basis for each.
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Classification turns on the state statute's two-part test: permanent affixation and title surrender.
- 20 tenant-owned homes with surrendered titles: real property. They are on permanent foundations, running gear has been removed, and titles have been surrendered and recorded. They should remain on the real property roll as improvements, even though the land belongs to the park.
- 25 tenant-owned homes with active titles: personal property under the statute. They remain titled and therefore do not meet the conversion test. They should be removed from the real property roll and, if the state taxes personal property, assessed to their owners on the personal property roll.
- 15 park-owned homes with surrendered titles: real property owned by the park. They are affixed and converted, so they are assessed as improvements.
The key judgment is that ownership of the home and ownership of the land can differ; the assessor must attribute value to the correct owner.
2. How should the park's land, roads, water and sewer lines, and clubhouse be treated? Identify any personal property.
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The land is real property. The roads, water and sewer lines, and clubhouse are improvements to the land and ordinarily real property when owned by the park and used for the community. Buried lines connected to the sites are likely fixtures; the clubhouse is a building.
Personal property would include the park's maintenance equipment, office furniture, and removable above-ground assets not permanently affixed. The assessor should not assess tenant-owned personal property as realty, but should assess the park's real property interests, including the land and site improvements that support the pads.
If the utility lines are owned by a public utility, they may be assessed to the utility rather than the park. The assessor should verify ownership before placing value on the lines.
3. What should the assessor do with the owner's request to remove the 25 titled homes from the real roll, and what evidence is needed?
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The assessor should grant the request for the 25 homes if the titles are active and the homes have not otherwise been converted to realty; the statutory test is not met. The assessor should require documentation: title search or title-surrender records, foundation affidavits, and site inspections.
The assessor should issue a written classification decision, correct the roll, and notify the affected owners of any personal property tax obligation. For the 20 and 15 homes, the assessor should verify surrender and affixation before keeping them on the real roll.
The owner may be trying to shift the tax burden, but the assessor must follow the statute, not the owner's preference. If the state provides a manufactured home conversion affidavit, the assessor should use it and retain it in the file.