A BILL TO BE ENTITLED
AN ACT to grant greater consumer protection to residents of manufactured housing in north Carolina.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 47‑20.6(a) reads as rewritten:
"(a)	If the owner of a manufactured home that is defined as real property in G.S. 105-273(13) has surrendered the title to the manufactured home and the title has been cancelled by the Division of Motor Vehicles under G.S. 20‑109.2, the owner, or the secured party having the first security interest in the manufactured home at time of surrender, shall record the affidavit described in G.S. 20‑109.2 with the office of the register of deeds of the county where the manufactured home is located. Upon recordation, the affidavit shall be indexed on the grantor index in the name of the owner of the manufactured home and on the grantee index in the name of the secured party or lienholder, if any."
SECTION 2.  G.S. 47‑20.6 is amended by adding a new subsection to read:
"(e)	In the event that the owner of a manufactured home described in subsection (a) of this section is not the owner of the real property to which the manufactured home is affixed, the owner or the secured party having the first security interest in the manufactured home at the time of surrender, shall indicate in the affidavit the following:
(1)	That the owner of the manufactured home is not the same as the owner of the real property to which the manufactured home is affixed.
(2)	That the owner of the manufactured home has entered into a lease for the real property on which the manufactured home is affixed with a primary term of at least 20 years."
SECTION 3.  G.S. 47‑20.7 reads as rewritten:
"§ 47‑20.7.  Declaration of intent to affix manufactured home; transfer of real property with manufactured home attached.
(a)	Except as provided in subsection (e) of this section, a person who owns or is purchasing a manufactured home that has never been titled by the Division of Motor Vehicles and that is defined as real property in G.S. 105-273(13) or that will be so defined once it is affixed to real property, shall record in the office of the register of deeds of the county where the manufactured home is or will be located a declaration of intent to affix the manufactured home to the real property and shall convey or encumber the real property, including the manufactured home, only by a deed, deed of trust, or other instrument recorded in the office of the register of deeds. Upon recordation, the declaration of intent shall be indexed on the grantor index in the name of the owner of the manufactured home.
(b)	The declaration of intent, deed, deed of trust, or other instrument shall contain a description of the manufactured home, including the name of the manufacturer, the model name, if applicable, the serial number, and a statement of the owner's intention that the manufactured home be treated as real property. In addition, in the event that the owner is not also the owner of the real property to which the manufactured home is or will be affixed, the owner shall indicate in the declaration of intent the following:
(1)	That the owner of the manufactured home is not the same as the owner of the real property to which the manufactured home is affixed.
(2)	That the owner of the manufactured home has entered into a lease for the real property on which the manufactured home is affixed with a primary term of at least 20 years.
(c)	On or after the filing of the instrument with the office of the register of deeds pursuant to subsection (a) of this section, the manufactured home placed, or to be placed, on the real property becomes an improvement to real property. Any lien on the manufactured home shall be perfected and have priority in the manner provided for a lien on real property.
(d)	The provisions of this section control over the provisions of G.S. 25‑9‑334 relating to the priority of a security interest in fixtures, as applied to manufactured homes.
(e)	Notwithstanding the provisions of subsection (a) of this section, any person who would otherwise be required to file a declaration of intent may elect not to have the owner's manufactured home classified as real property by applying for the issuance of a title for a manufactured home from the Division of Motor Vehicles and by filing a declaration of intent not to affix the manufactured home to real property with the register of deeds of the county where the manufactured home is or will be located. The declaration of intent not to affix shall contain a description of the manufactured home, including the name of the manufacturer, the model name, if applicable, the serial number, and a statement of the owner's intention that the manufactured home not be treated as real property. In the event that a declaration of intent not to affix is filed, the manufactured home will be considered tangible personal property, except as provided in G.S. 105-273(13)."
SECTION 4.  Subdivision (13) of G.S. 105‑273 reads as rewritten:
"§ 105‑273.  Definitions.
When used in this Subchapter (unless the context requires a different meaning):
…
(13)	"Real property," "real estate," and "land" mean not only the land itself, but also buildings, structures, improvements, and permanent fixtures on the land, and all rights and privileges belonging or in any way appertaining to the property. These terms also mean a manufactured home as defined in G.S. 143‑143.9(6) if it is a residential structure; has the moving hitch, wheels, and axles removed; and is placed upon a permanent foundation either on land owned by the owner of the manufactured home or on land which the owner of the manufactured home has a leasehold interest pursuant to a lease with a primary term of at least twenty 20 years. A manufactured home as defined in G.S. 143‑143.9(6) that does not meet all of these conditions is considered tangible personal property."
SECTION 5.  G.S. 42‑14 reads as rewritten:
"§ 42‑14.  Notice to quit in certain tenancies.
A tenancy from year to year may be terminated by a notice to quit given one month or more before the end of the current year of the tenancy; a tenancy from month to month by a like notice of seven days; a tenancy from week to week, of two days. Provided, however, where the tenancy involves only the rental of a space for a manufactured home as defined in G.S. 143‑143.9(6), a notice to quit must be given at least 120 days before the end of the current rental period, regardless of the term of the tenancy."
SECTION 6.  Chapter 42 of the General Statutes is amended by adding a new section to read:
"§ 42-14.3. Notice of sale or closure of manufactured home communities.
(a)	In the event that an owner of a manufactured home community (defined as  a parcel of land, whether undivided or subdivided, that has been designed to accommodate at least three manufactured homes) intends to sell or close the manufactured home community, the owner shall give each resident notice of the intended sale or closure at least one year before the residents are required to vacate, regardless of the term of the tenancy. Failure to give notice as required by this section is a defense in an action for possession.
(b)	Notwithstanding subsection (a) of this section, if a manufactured home community is being closed pursuant to a valid order of any unit of state or local government, the owner of the community shall be required to give notice of the closure of the community to each resident of the community within three business days of the date on which the order is issued."
SECTION 7.  G.S. 143‑143.10(a) reads as rewritten:
"(a)	There is created the North Carolina Manufactured Housing Board within the Department. The Board shall be composed of nine members as follows:
(1)	The Commissioner of Insurance or his designee.
(2)	A manufactured home manufacturer.
(3)	A manufactured home dealer.
(4)	A representative of the banking and finance business.
(5)	A representative of the insurance industry.
(6)	A manufactured home supplier.
(7)	A set‑up contractor.
(8)	Two individuals then living in manufactured homes, as defined in G.S. 143-143.9(6).
The Commissioner or his designee shall chair the Board. The Governor shall appoint to the Board the manufactured home manufacturer and the manufactured home dealer. The General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120‑121 shall appoint the representative of the banking and finance industry and the representative of the insurance industry. The General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120‑121 shall appoint the manufactured home supplier and set‑up contractor. The Commissioner shall appoint two individuals living in manufactured homes after receiving recommendations from affordable housing advocates. Except for the individuals living in manufactured homes and the persons appointed by the General Assembly, each member of the Board shall be appointed by the appropriate appointing authority from a list of nominees submitted to the appropriate appointing authority by the Board of Directors of the North Carolina Manufactured Housing Institute. At least three nominations shall be submitted for each position on the Board. The members of the Board shall be residents of the State.
The members of the Board shall serve for terms of three years. In the event of any vacancy of a position appointed by the Governor or Commissioner, the appropriate appointing authority shall appoint a replacement in the same manner as provided for the original appointment to serve the remainder of the unexpired term. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120‑122. In the event of any vacancy, the appropriate appointing authority shall appoint a replacement to serve the remainder of the unexpired term. Such appointment shall be made in the same manner as provided for the original appointment. No member of the Board shall serve more than two consecutive, three‑year terms.
The two members of the Board who live in manufactured homes shall have no beneficial financial interest connected with the manufactured housing industry. No member of the Board shall participate in any proceeding before the Board involving that member's own business.
Each member of the Board, except the Commissioner and any other State employee, shall receive per diem and allowances as provided with respect to occupational licensing boards by G.S. 93B‑5. All per diem and travel expenses shall be paid exclusively out of the fees received by the Board as authorized by this Article. In no case shall any salary, expense, or other obligation of the Board be charged against the General Fund of the State of North Carolina. All moneys and receipts shall be kept in a special fund by and for the use of the Board for the exclusive purpose of carrying out the provisions of this Article. At the end of the fiscal year, the Board shall retain fifteen percent (15%) of the unexpended funds collected and received during that year. The remaining eighty–five percent (85%) of these funds shall be credited to the General Fund.
(b)	In accordance with the provisions of this Article, the Board shall have the following powers and duties:
(1)	To issue licenses to manufacturers, dealers, salespersons, and set‑up contractors.
(2)	To require that an adequate bond or other security be posted by all licensees, except manufactured housing salespersons.
(3)	To receive and resolve complaints from buyers of manufactured homes and from persons in the manufactured housing industry, in connection with the warranty, warranty service, licensing requirements or any other provision under this Article.
(4)	To adopt rules in accordance with Chapter 150B of the General Statutes as are necessary to carry out the provisions of this Article.
(5)	To file against the bond posted by a licensee for warranty repairs and service on behalf of a buyer."
SECTION 8.  G.S. 143‑143.10 is amended by adding a new subsection to read:
"(c)	The Board shall meet no less than once every three months to conduct administrative hearings, if necessary, and to discharge any other Board business. Minutes of all Board meetings and records of all official actions taken by the Board, including, without limitation, its decisions with respect to any administrative hearing shall be kept in the Board's public records and posted on the Board's Internet website within one month of the adjournment of any Board meeting. Additionally, a current list of the Board's membership and the Board's next scheduled meetings shall be regularly posted on the Board's Internet website."
SECTION 9.  Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-143.20A. Display of pricing on manufactured homes.
Each manufactured home dealer shall establish, permanently affix, and prominently display pricing for the manufactured homes offered for sale by the dealer. The prices shall be displayed in writing and shall be disclosed in advance of negotiations with any buyer. Each price shall include the cost of the manufactured home and alternative flooring. In addition, each price display shall include a disclosure that the price does not include variable costs, including, without limitation, transportation fees or set-up and installation costs.
SECTION 10.  Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-143.20B. Disclosure of financing options for manufactured housing.
If a consumer is purchasing a manufactured home that shall be permanently affixed to land owned by the consumer or on land in which the purchaser of the manufactured home has a leasehold interest pursuant to a lease with a primary term of at least twenty 20 years, the manufactured housing dealer shall disclose in writing to each consumer the option of having the manufactured home classified as real property pursuant to G.S. 47-20.7 and the possibility that, pursuant to that classification, the acquisition of the manufactured home may be financed as real property by a lender. If the consumer elects to classify the manufactured home as real property, then the closing of the acquisition of the home shall be classified as a residential real estate transaction."
SECTION 11.  G.S. 143‑143.21A reads as rewritten:
"§ 143‑143.21A.  Purchase agreements; buyer cancellations.
(a)	A purchase agreement for a manufactured home shall include all of the following:
(1)	A description of the manufactured home and all accessories included in the purchase.
(2)	The purchase price for the home and all accessories.
(3)	The amount of deposit or other payment toward or payment of the purchase price of the manufactured home and accessories that is made by the buyer.
(4)	The date the retail purchase agreement is signed.
(5)	The estimated terms of financing the purchase, if any, including the estimated interest rate, number of years financed, and monthly payment.
(6)	The buyer's signature.
(7)	The dealer's signature.
(b)	The purchase agreement shall contain, in immediate proximity to the space reserved for the signature of the buyer and in at least ten point, all upper‑case Gothic type, the following statement:
"I UNDERSTAND THAT I HAVE THE RIGHT TO CANCEL THIS PURCHASE BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE THAT I HAVE SIGNED THIS AGREEMENT. I UNDERSTAND THAT THIS CANCELLATION MUST BE IN WRITING. IF I CANCEL THE PURCHASE AFTER THE THREE‑DAY PERIOD, I UNDERSTAND THAT THE DEALER MAY NOT HAVE ANY OBLIGATION TO GIVE ME BACK ALL OF THE MONEY THAT I PAID THE DEALER. I UNDERSTAND ANY CHANGE TO THE TERMS OF THE PURCHASE AGREEMENT BY THE DEALER WILL CANCEL THIS AGREEMENT."
(c)	At the time the deposit or other payment toward or payment for the purchase price is received by the dealer, the dealer shall give the buyer a copy of the purchase agreement and a completed form in duplicate, captioned "Notice of Cancellation," which shall be attached to the purchase agreement, be easily detachable, and explain the buyer's right to cancel the purchase and how that right can be exercised.
(d)	The dealer shall return the deposit or other payment toward or payment for the purchase price to the buyer if the buyer cancels the purchase before midnight of the third business day after the date the buyer signed the purchase agreement or if any of the material terms of the purchase agreement are changed by the dealer. To make the cancellation effective, the buyer shall give the dealer written notice of the buyer's cancellation of the purchase. The dealer shall return the deposit or other payment toward or payment for the purchase price to the buyer within 15 business days after receipt of the notice of cancellation or within three business days of any change by the dealer of the purchase agreement. For purposes of this section, "business day" means any day except Sunday and legal holidays. Each time the dealer gives the buyer a new set of financing terms, the buyer shall be given another three-day cancellation period. The dealer shall not commence setup procedures until after the three-day cancellation period has run.
(e)	If the buyer cancels the purchase after the three‑day cancellation period, but before the sale is completed, and if:
(1)	The manufactured home is in the dealer's inventory, the dealer may retain from the deposit or other payment received from the buyer actual damages up to a maximum of ten percent (10%) of the purchase price; or
(2)	The manufactured home is specially ordered from the manufacturer for the buyer, the dealer may retain actual damages up to the full amount of the buyer's deposit or other payment received from the buyer.
(f)	A dealer shall maintain in a segregated escrow fund or trust account any funds that come into the dealer's possession, but that are not the dealer's property and that the dealer is not entitled to retain under the circumstances. The escrow fund or trust account shall be held on deposit at a federally insured financial institution.
(g)	A dealer may not transfer title to a manufactured home or otherwise sell, assign, or convey a manufactured home to a consumer unless the dealer delivers to the consumer a written document disclosing the total purchase price, as adjusted for any agreed interest rate and any points or fees, and the length of time for any loan repayment."
SECTION 12.  This act becomes effective July 1, 2003.