[WSBARP] Clearing title old bank as legal owner

Thu May 19 12:41:19 PDT 2016

OK, I realize this is legal heresy BUT you can tell the owner to chill out, he’s getting a place to live in or rent out for only $5k.  For only $5k, the owner should realize that it is well worth it to buy it and it will cost far too much to try to clear title.  As pointed out by, I think, Bryce, the owner doesn’t need to have clear title to live there and enjoy its possession (if not its “clear title.”)

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of HOWARD HERMAN
Sent: Thursday, May 19, 2016 11:54 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Clearing title old bank as legal owner

Perhaps it would be possible to eliminate the title under  WAC 308-56A-505 if the mobile home has or will be qualified to be taxed as real property. Probably a talk with the local auditor would be a good idea to see what is required.

Howard Herman

Herman Herman & Jolley PS

509 220 5810

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Richard Holland
Sent: Thursday, May 19, 2016 11:37 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Clearing title old bank as legal owner

Ok.  I will add this to the mix and you may take it for what it is worth.  It may not be directly relevant depending on the factual situation and I cannot disagree that the safest route may be some form of a quiet title.  My specific issue comes up not with prior lien holders on the mobile but on trying to “eliminate title” when the prior owner of the mobile is deceased, long gone, or not at all interested in cooperation.  As such, this does not directly address the issue posted but I think it could give you some context to move from.

There is a confusing world of DOL titled mobile homes that are nonetheless considered real estate.  I have had this adventure with multiple County auditors and it is widely different depending on the County.  What follows is what I went through in Snohomish County:

Once a mobile home is ‘affixed’ to the real property and the County finds out about it, they begin taxing it as real estate pursuant to RCW 82.45.032 which pretty much says what they say it does regarding the definition of “real estate” and “used mobile homes”.  An inspection, etc. is irrelevant (to them).  Once physically affixed a mobile home is real estate.  However, since the “title” is still with DOL, Snohomish County gives the mobile it a new “associated” real property tax account number.  Once the title is ‘eliminated’ they would simply add the value of the mobile to the “original” parcel tax account number and cancel the “associated” account.  

According to Excise, because the mobile has become “real estate” by being affixed and now taxed as such (this latter part is critical), it is real estate already regardless of the existence of a title with DOL.  To sell the property, you file a conventional real estate excise tax affidavit including in the legal description “together with a 19xx Fleetwood Serial XXXX currently taxed as real estate”.  (I put this in the legal on the deed too).  You also have to file a Mobile Home Excise Tax Affidavit.  Now I balked at this.  It clearly says the form is to be used “only for transferring title to a mobile home”.  (As you will see, if it said ‘transferring ownership to a mobile home’ it would be more accurate). To me, the title was held by the person listed with the DOL.  The form also asks for the name of the “new registered owner”.  I left it blank arguing that there was no new registered owner as the title was still held by DOL.  Excise was not at all in accord with either issue going back again to the fact that the mobile is now real estate – just existing in some weird form administratively and the new registered owner is the person buying the real estate and the new legal owner is the same (unless there is a loan specific to that mobile in the new purchase).

My confusion – which I think was oddly logical - comes from the fact that say, on your auto/boat etc. title, there is a “legal owner” and a “registered owner” and the registered owner is you and the legal owner the bank (the one with the loan).  To me, the “registered owner” is therefore the “titled owner”. 

Again, according to the Excise Tax Desk in Snohomish County, at least, that is not the case.  Once it becomes real estate the legal owner of the real estate IS the registered owner of a mobile home.  The “Title” at the DOL is apparently just an administrative dangling issue caused by (and I am paraphrasing quite accurately) ‘poor communication between county and state agencies’.  Rather than approach it as lenders and title companies want where you eliminate the title before the sale, according to the excise tax desk in Snohomish County, you sell the property, including the mobile, paying the taxes etc.  (on both tax accounts) FIRST.  You then take the proof of the taxes being current and the MH E-Tax to DOL and they will issue a title in your name.  NOTE:  I cannot confirm the DOL part – as I have not had the occasion to test this.  

The important point is of course that until the Title is eliminated at DOL (even if they issue a new title in the buyer’s name) there will remain TWO real property tax accounts for the same “property” and Title will NOT insure the title to the mobile home.  However, the most formidable hurdle to the eliminating the title has now apparently been surmounted (which is - in the cases I deal with - getting the signature of the ‘titled’ owner on the application).

Again, this doesn’t directly address the prior lien holders on the mobile purchase you raised but I think there is an argument that their security interest was eliminated when the mobile was affixed.  I know that sounds crazy and it cannot be true in law but it certainly seems to be true in fact.  Once affixed the mobile can no longer be repossessed (by the County’s logic that it is now real estate) – it would have to be foreclosed on - but the mobile lien holder has no right to foreclose on the property as a whole unless they have provided for it in the security agreement.  I should think they would have to get a judgment on the note and then proceed to execute on the property.  That seems highly unlikely given the age of the obligations to which you refer.

I hope that made some sort of sense or at least got the wheels turning on an approach.

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Gregory L. Ursich
Sent: Thursday, May 19, 2016 10:55 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBARP] Clearing title old bank as legal owner

A quiet title lawsuit is the only way

Sent from my iPhone

On May 19, 2016, at 10:28 AM, Josh Grant <jgrant at accima.com <mailto:jgrant at accima.com> > wrote:

I hate mobile homes.

This is a 2nd request for some listserve wisdom.

I have a client trying to purchase a lot and old mobile home.  The mobile home has been fixed up.  Total purchase price is only $5000 so a great deal of legal work isn’t going to happen.

DOL tells us that a predecessor of the seller borrowed from “Western Savings and Loan” in 1986 and they continue as the “legal owner” on the title. .  We found a similar named S&L out of Phoenix, which was inactivated in 1989.  For that matter, we also have to clear off the old 1986 registered owner as well.  kind of a nightmare.

What is the procedure for clearing off these old debts and getting a new Title issued?

Thanks.

Josh

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