Request By:
Hon. W. R. Henrick, Region Counsel
General Electric Credit Corporation
260 Long Ridge Road
Stamford, CT 06904
Opinion
Opinion By: David L. Armstrong, Attorney General; Susan N. Mastin, Assistant Attorney General
This letter is written in response to your recent request for an opinion on the applicable statutes for financing manufactured housing purchased by Kentucky consumers. Prior to the amendment of KRS 190.090 et seq. this Office issued an Opinion, OAG 80-111, which concluded that the Motor Vehicle Act, KRS 190.090, applied to mobile home transactions with the cash sale price of less than $5,000 and the Installment Sales Act, KRS 371.210 et seq. , applied where the cash sale price exceeded $5,000. The 1984 Legislature amended KRS 190.090(4) defining "motor vehicle" by eliminating the part of the definition which required a cash sales price of $5,000 or less. Motor vehicle is defined as follows with the excluded words being in brackets and a line drawn through them:
"Motor vehicle" means any device in, upon, or by which any person or property is, or may be transported or drawn upon the highway. The term does not include self-propelled wheel chairs and invalid tricycles, tractors, power shovels, road machinery, implements of husbandry and other agricultural machinery, or other machinery not designed primarily for highway transportation which may incidentally transport persons or property on the highway, or devices which move upon or are guided by a track or travel through the air. A moped as defined in KRS 190.010 shall be subject to the same requirements as a motor vehicle under this section.
Since the only amendment to the definition to the word "motor vehicle" was to eliminate the $5,000 ceiling, the legal reasoning in Attorney General's Opinion 80-111 concluding that a mobile home fell within the definition of motor vehicle as long as it is or may be transported or drawn upon the highway is still valid.
The only other statutory provision relating to the financing of mobile homes which has been passed since the 1980 Attorney General's Opinion referred to herein is KRS 360.150 which is referred to as "Manufactured Home Financing" . KRS 360.150(2)(c) defines manufactured home as:
A movable dwelling unit, designed and constructed for permanent occupancy by a single family, which dwelling contains permanent eating, cooking, sleeping and sanitary facilities; or a prefabricated dwelling that is manufactured in two (2) or more modules at a location other than a home site and which is designed to be used as a residence when the modules are transported to the home site, and the modules are joined together and installed on a permanent foundation system. The term includes the plumbing, heating, air conditioning, and electrical systems contained in the structure. . .
KRS 360.150(2) defines a manufactured home financing transaction as follows:
A manufactured home financing transaction may provide for a fixed rate of interest payable in substantially equal successive installments over a fixed term, or may provide that the rate of interest may be adjusted at certain regular intervals. In this later event, the manufactured home financing transaction shall be subject to the provisions of this section.
Therefore, manufactured home financing transactions which provide for a rate of interest adjusted at certain regular intervals must comply with the requirements of KRS 360.150.
KRS 360.150 excludes manufactured home financing transactions which provide for a fixed rate of interest payable in substantially equal successive installments over a fixed term. These financing transactions fall under the statutory requirements of the Motor Vehicle Retail Installment Sales Act because they would fall under the broad definition of "motor vehicle" as contained in KRS 190.090(4). Since there is no longer a ceiling on the cash price sale of such transactions, the Motor Vehicle Retail Installment Sales Act would be applicable in all manufactured home financing transactions where there was a fixed rate of interest. The provisions of the Installment Sales Contract Act, KRS 367.710 et seq. , would not be applicable to any manufactured home financing transaction.
I trust this letter will be of some assistance to you. This response has been restricted to the applicable law based upon the facts you have presented.