SENATE BILL REPORT

SSB 5668

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Restricting the use of consignment contracts in the sale of used manufactured/mobile homes.

Sponsors: Senate Committee on Financial Institutions, Housing & Insurance (originally sponsored by Senators Berkey, Schoesler, McCaslin, Benton and Marr).

Committee Activity: Financial Institutions, Housing & Insurance: 2/11/09, 2/25/09 [DPS].

Majority Report: That Substitute Senate Bill No. 5668 be substituted therefor, and the substitute bill do pass.

Signed by Senators Berkey, Chair; Hobbs, Vice Chair; Franklin, McDermott, Parlette and Schoesler.

Background: Manufactured and mobile homes are considered vehicles under the law of Washington. Used manufactured and mobile homes may be sold either on consignment or by a listing contract. In a consignment contract, a vehicle dealer takes delivery or entrustment of a vehicle and agrees to sell it on behalf of the owner. In a listing contract, a listing dealer locates a buyer for the home on behalf of the owner. Under consignment contracts, buyers and sellers may never meet, reducing transparency and increasing the risk of undisclosed terms of sale.

Summary of Substitute Bill: Sale of used manufactured and mobile homes must be by listing contract if the manufactured or mobile home both exists as a home and is intended to remain a home. Listing contracts on manufactured or mobile homes must define the amount or type of compensation the agent, dealer, or broker will receive, and must be written on a notice attached to the contract itself that also includes a description of the home and its location. A procedure for exchange of offers, counter offers, and acceptance are set out, and require both parties to see, sign, and receive the same documents.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Original Bill: PRO: This would provide the same rights to sellers of mobile and manufactured homes that sellers of real property receive. Consignment is potentially an issue because dealers can conceal profits. A transparent listing contract is only an option under current law, not a requirement. Sellers should have a right to know what their property is selling for, how much of it the dealer takes, and how much will come to the seller. Everyone should get these rights, especially the elderly owners of these homes who may be more vulnerable than most people.

Persons Testifying: PRO: Bob Mitchell, Washington Realtors; Robert Cochran, John Woodrine, Manufactured Housing Communities of Washington.