In , 491 S.E.2d 234 ( N.C.App. 1997) the North Carolina Court of Appeals has recently issued an opinion defining Modular Homes for the purpose of interpreting the application of restrictive covenants. This panel has perhaps broadened the definition so that more units may be installed in the future without violating traditional subdivision restrictions.

Defendants purchased a lot in Jordan Woods Subdivision in Chatham County with the expressed intention of installing a modular home. They were assured that the home would not violate a restrictive covenant which read as follows: " No structure of a temporary character, trailer . . . or any other outbuilding shall be inhabited, located or used upon any building unit or lot at any time as a residence, either temporarily or permanently." Upon commencement of the installation of the home plaintiffs filed a complaint and motion for preliminary injunction alleging " that defendants had begun to construct a ‘trailer’ in violation of the restrictive covenant." The trial court denied plaintiffs’ motion for preliminary injunction and granted defendants’ motion for summary judgment.

The Court of Appeals observed that while the defendants chose an optional steel framed structure it did not change the character of the home even though it did determine the available methods of delivering the home to the site. With steel framing defendants could choose either to have the units lifted onto a dolly or to have a tongue and axles attached to save expense. The defendants chose the latter method. The home was attached to a permanent foundation, a deck and covered porch were built and attached and a three car garage was built upon a permanent foundation and connected to the home by a breezeway. A building permit was obtained prior to installation and periodic inspections were conducted during the installation and construction process. The Structure complied with the North Carolina State Building Code. The Court observed that "since the defendants’ home is attached to a permanent foundation, it can only be moved in the same way as a site-built home." Title was transferred by a Bill of Sale and no Certificate of Origin was ever issued.

The court noted ‘ whether a dwelling is a mobile home under . . . a covenant depends upon its characteristics . . .’ citing Starr v. Thompson, 96 N.C.App. 369, 385 S.E.2d 535, (1989). The Court then states that "although this Court has stated that ‘whether a dwelling is a mobile home [or trailer] . . .[does not depend] . . . upon what it is called by municipal zoning authorities or others or what government agency establishes the building standards,’ Starr; 96 N.C.App. at 371, 385 S.E.2d at 536, such information will aid us in our analysis." The opinion then cites the State Building Code for its definitions of Manufactured Building, Manufactured Home (Mobile Home) and Modular Home.

The Court lists some characteristics of the finished structure in order to determine which category the home falls under; "(1) whether the structure must comply with the N.C. Regulations for Manufactured/Mobile Homes, which are consistent with Housing and Urban Development (HUD) national regulations, or with the Building Code; (2) whether the structure is attached to a permanent foundation; (3) whether, after constructed, the structure can easily be moved or has to be moved like site-built home; (4) whether title to the home is registered with the N.C. Department of Motor Vehicles or title must be conveyed by a real property deed; and (5) how the structure is delivered to the homesite."

This Court distinguishes Starr and Young v. Lomax, 122 N.C.App. 385, 470 S.E.2d 80,(1996) by focusing on the fact that there was a permanent foundation, a building permit was issued, periodic inspection by a building inspector was conducted, that the home can only be moved in the same manner as a site-built home and title was acquired through a bill of sale.

Citing a similar case Angel v. Truitt, 108 N.C.App. 679, 424 S.E.2d 660, (1993) the Court quotes; "Once lifted off the dolly by crane and placed on a permanent foundation, they can be moved only in the [108 N.C.App. 684] manner in which site-built homes are moved. The affidavits of professional house movers reveal that in order to move the structure the modules are not separated and placed back on the dolly, but are moved as one unit in exactly the same manner that a house built on-site is moved. Therefore, the structure at issue is not a "mobile home" within the meaning of the restrictive covenant."

The Briggs Court then concludes by holding that " the defendants’ home is not a ‘trailer’ whithin the meaning of the restrictive covenant." And affirming the trial court. This case should expand the ability of subdivision lot owners to utilize thier property for more affordable homes in the future.

The title examiner when advised of the fact of the proposed installation of a modular home will need to establish the following facts;

• Compliance of the Structure with the N.C. State Building Code
• Proper issuance of a building permit
• Lack of a Certificate of Origin or DMV title
• Existance of a Bill of Sale
• Proposed attachment to a permanent foundation
• Lack of a prohibition of Modular Homes in the restrictive covenants

If the facts of the transaction conform to either Angel or Briggs then the property should be insurable without exception to any violation of a mobile home restriction.