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1.5.6 Manufactured Homes, Houses, and Real Property

The Magnuson-Moss Warranty Act applies to consumer products, defined as “any tangible personal property.”128 Real property and houses are thus not covered. The Act may apply to manufactured homes to the extent they are treated as personal property rather than real property under state law.129 In New York, the sale of shares in a cooperative apartment is considered a sale of goods covered by Article 2.130

Real property is not included in the term goods under UCC Article 2 because it is not a movable thing, as required by section 2-105(1).131 Existing houses built on real property are thus outside the scope of the UCC.132 Article 2 may apply, however, to a house to be built on real property, depending on the type of construction. A contract for construction of a house from raw materials is not a contract for goods, because the house is not movable at the time it is identifiable as a house.133 But an existing house or other structure is covered if it is to be removed from the realty by the seller.134 Moreover, building materials are goods when they are purchased,135 although once they are incorporated into realty they cease to be goods and are no longer covered by the UCC.136 Thus, a person who purchases a completed house does not have UCC claims against a manufacturer who supplied construction materials to the builder.137 Nonetheless, one court allowed homeowners to sue the manufacturer as third-party beneficiary of the supplier who purchased the construction materials.138 The court reasoned that the homeowners’ claim related to goods because the materials were movable at the time of the supplier’s purchase.

UDAP statutes may or may not apply to realty, depending on the statutory language.139 Negligence and fraud claims are not limited to personal property and apply to realty warranties. Common law warranties usually arise in the construction and sale of a new home, and in many states there are statutory warranties.140

Footnotes

  • 128 {116} 15 U.S.C. § 2301(1).

  • 129 {117} See §§ 2.2.1.5, 17.2.2, infra.

  • 130 {118} Friedman v. Sommer, 471 N.E.2d 139 (N.Y. 1984) (applying Article 2; sale of cooperative apartment is really sale of securities in a cooperative corporation and is governed by U.C.C.); McLeod v. Cowles, 626 N.Y.S.2d 831 (N.Y. App. Div. 1995).

  • 131 {119} See Reese v. Loew’s Madison Hotel Corp., 65 F. Supp. 3d 235 (D.D.C. 2014) (U.C.C. inapplicable to rental of hotel room); Margarito v. Life Products Corp., 46 U.C.C. Rep. Serv. 2d 621 (E.D. Va. 1998) (slip and fall in hotel bathtub is not governed by U.C.C. because of real property exclusion); § 17.2.1, infra (discussion of applicability of U.C.C. to manufactured homes and modular homes).

  • 132 {120} See U.C.C. § 2-107(1); Ge Lin v. Ecclestone Signature Homes of Palm Beach, L.L.C., 59 So. 3d 267 (Fla. Dist. Ct. App. 2011) (U.C.C. inapplicable to sale of furnished home).

  • 133 {121} See Wehr Constructors, Inc. v. Steel Fabricators, Inc., 769 S.W.2d 51 (Ky. Ct. App. 1988) (construction of justice center; “goods incorporated into a real estate construction contract are not goods”); Heffernan v. Reinhold, 73 S.W.3d 659 (Mo. Ct. App. 2002) (storm sewer pipe installed underground as part of site development before decedent bought home was not goods); Glass v. Trafalgar House Prop., Inc., 58 Va. Cir. 437 (Va. Cir. Ct. 2002). See also Palmer v. Espey Huston & Associates, 84 S.W.3d 345 (Tex. App. 2002) (contract to build breakwater not goods because it was to be a permanent improvement to real estate).

  • 134 {122} U.C.C. § 2-107(1).

  • 135 {123} See, e.g., Ogden Martin Sys., Inc. v. Whiting Corp., 179 F.3d 523 (7th Cir. 1999) (overhead cranes were movable at time of contracting and are goods even though they were to be installed in buyer’s plant); Blesi-Evans Co. v. Western Mech. Serv., Inc., 72 U.C.C. Rep. Serv. 2d 115 (D.S.D. 2010) (boiler is goods); W.R. Constr. & Consulting, Inc. v. Jeld-Wen, Inc., 2002 WL 31194870 (D. Mass. Sept. 10, 2002) (windows to be installed in a home were goods because they were movable at the time of identification to contract).

  • 136 {124} Hanover Ins. Co. v. BASF Corp., 2019 WL 220240 (N.D. Ala. Jan. 16, 2019) (stucco, once applied to a home, is not goods); Pelino v. Ward Mfg., L.L.C., 2015 WL 4528141, at *7 (D. Md. July 27, 2015); Gordon v. Acrocrete, Inc., 400 F. Supp. 2d 1310 (S.D. Ala. 2005) (exterior wall covering integrated into realty and therefore not goods); Keck v. Dryvit Sys., Inc., 830 So. 2d 1 (Ala. 2002) (building materials are no longer goods if they cannot be severed without material harm to the realty); Baypoint Condo. Ass’n v. Dryvit Sys., 46 U.C.C. Rep. Serv. 2d 623 (Va. Cir. Ct. 2001) (exterior insulation finish system); MacConkey v. F.J. Matter Design, Inc., 54 Va. Cir. 1 (2000) (goods used for construction not covered once they are incorporated into realty).

  • 137 {125} Keck v. Dryvit Sys., Inc., 830 So. 2d 1 (Ala. 2002); Baypoint Condo. Ass’n v. Dryvit Sys., 46 U.C.C. Rep. Serv. 2d 623 (Va. Cir. Ct. 2001).

  • 138 {126} Loughridge v. Goodyear Tire & Rubber Co., 192 F. Supp. 2d 1175 (D. Colo. 2002).

  • 139 {127} See § 11.1.1, infra.

  • 140 {128} See Ch. 18, infra.