This matter comes before me upon plaintiff's motion for partial summary judgment in this in rem action to foreclose a tax lien against a parcel of land and mobile home of Arthur Stubbs and Emma Askins Stubbs. Intervenor Heritage Bank-North (the "bank") holds a purchase money security agreement on the aforementioned mobile home sold to Emma Askins Stubbs, and opposes plaintiff's motion.
There are two legal issues presently before the court for determination. First, whether or not mobile homes are subject to taxation as improvements to real estate ("fixtures") where they are utilized as permanent dwellings. Second, whether municipal real estate tax liens on fixtures have priority over
security interests in the personal property that became a fixture; more specifically, plaintiff moves to have this court resolve the priority dispute between the parties with reference to N.J.S.A. 54:5-9 and N.J.S.A. 12A:9-313.
The facts are not in dispute. On or about February 25, 1975 Emma Askins (Stubbs) purchased a mobile home from Mobiletowns, Inc. and executed and delivered to it a purchase money retail installment contract. The sales tax was paid, and thereafter the installment contract was assigned to First Charter National Bank, now known as Heritage Bank-North, the intervenor here. The bank's security interest in the mobile home was recorded with the Director of Motor Vehicles on the certificate of ownership dated March 18, 1975. The mobile home was then placed on land by Arthur and Emma Stubbs, which land is the subject of plaintiff's in rem foreclosure in the present action.
Plaintiff has a tax sale certificate on Block 136, Lot 13, and seeks to foreclose. Intervenor claims a priority as to its lien on the mobile home. Plaintiff contends that mobile homes are subject to taxation as improvements to real estate where they are utilized as permanent dwellings. Intervenor maintains that the mobile home is personal property and that even if it is not, intervenor still holds a prior lien.
The mobile home measures 24 by 60 feet and was located on the subject property on or about April 16, 1975. The taxes on the premises for which the tax lien was sold and the in rem foreclosure action brought included taxes on the land and on the mobile home.
Plaintiff is correct in its assertion that under the Commercial Township zoning ordinance applicable here, the siting of modular homes on individual lots rather than in mobile home parks is permitted only where such residences are to be used as permanent dwellings. The ordinance provides, in pertinent part:
A Mobile Home not in a Mobile Home Park shall be permanently placed on land owned by the owner or owners of said Mobile Home, shall also be placed on a safe, permanent and adequate foundation supporting the under frame and with its wheels removed, and shall have skirting placed around the foundation. . . .
Such Mobile Home shall be considered as a dwelling house, building or structure and shall have a water supply and sewerage system which shall comply with local and State sanitary law. . . .
The mobile home here is connected to an on-site septic system and well. It is attached to electric service and an on-site water supply system.
Plaintiff cites the cases of Bell v. Corbin City , 164 N.J. Super. 21 (App.Div.1978), and Koester v. Hunterdon Cty. Bd. of Taxation , 79 N.J. 381, (1979), in support of its position that mobile homes are subject to taxation as improvements to real property when they are used as permanent ...