Thursday, November 16, 2017

This is Just One More Reason to Join the Modular Home Builders Association

MHBA Weighs in on Michigan Legal Case

The MHBA Board of Directors recently voted to file an Amicus Brief on behalf of the Goyings family and their case scheduled to appear before the Michigan Supreme Court. At issue is whether a developer or subdivision can restrict an otherwise compliant home based on the manner in which it was constructed or assembled, directly addressing poor language used in decades old restrictive covenants.

Case summary: The Goyings built a system-built home through a local modular builder. Their neighbors then sued to have the house torn down, arguing that it violated restricted covenants that barred “modular or prefabricated homes” from the neighborhood. The Goyings’ home was of superior quality, and substantial parts of it were to be “stick-built” on-site. Unsurprisingly, then, the trial court agreed that the Goyings’ house wasn’t a “modular home” of the kind described in the restrictive covenants. But the Court of Appeals reversed, holding that the Goyings’ home was a modular home because it contained modular components.

The attorney for the family argues that the trial court’s reading is the right one: that “an entirely modular, premanufactured or prefabricated home” couldn’t be placed in this neighborhood—but the Goyings’ home falls outside that definition. He reads various provisions of the neighborhood covenants together, and he explains why the contrary reading—requiring 0% modular components—would eliminate a huge swathe of homes.

As amicus, MHBA’s role would be a little different, stressing the broader policy implications of the Court of Appeals’ approach: less consumer choice and less affordable housing options, with little benefit (given the high-quality and aesthetically appealing nature of today’s system-built homes).

The inspection and quality control process in Michigan is more robust for a modular home than for a conventional site built home. Furthermore, these restrictive covenants that prohibit “modular homes” do not prevent a site built home from being constructed in a poor manner and lowering the value of surrounding homes.

In this age where Fortune 500 companies and developers around the world have embraced modular construction, it’s absurd that we still have to deal with the misconceptions of the prior generation in these template-based covenants. Every home and building contains some degree of prefabrication or component from roof trusses, to mechanical subassemblies. Why should it matter HOW the pieces are assembled, when the focus should be on the final product.

In addition to the legal case, MHBA is considering having legislation introduced that would prevent banning the method in which a home is constructed. While these are longer term efforts, we feel they must be challenged on multiple fronts.

Started on November 13, 2017 by Tom Hardiman

1 comment:

Anonymous said...

Efforts like this are important to the industry, and while they cost both money and time, they are really an investment. Most states allow HOA covenants to restrict and prevent modular-constructed housing. This makes little sense for builders or future homeowners. No other group but MHBA is capable of attacking this, and all of us that make a living in this business should consider participating in this association. Strength comes from numbers and breadth, and there is such a huge potential coming for modular construction. I joined MHBA and thank them for their efforts. Bob Bender