§5363.1. Abandoned factory-built homes; secured parties

            A. Definitions.

            (1) "Abandoned" or "abandonment" means that the secured party has been notified by the mortgagor or by the owner of the immovable property on which the factory-built home is located that the mortgagor no longer intends to remain in the factory-built home, or when a reasonable person would conclude that the factory-built home is no longer being occupied and from all appearances substantially all of the mortgagor's personal belongings have been removed from the factory-built home.

            (2) "Factory-built home" shall have the meaning given to that term in R.S. 9:1149.2.

            (3) "Mortgagor" means the person executing the chattel mortgage or security agreement in accordance with Uniform Commercial Code - Secured Transactions, R.S. 10:9-101 et seq., or, if the factory-built home has been transferred and the chattel mortgage or security interest in accordance with Uniform Commercial Code - Secured Transactions has been assumed by a new purchaser with written consent of the holder of the chattel mortgage or security agreement, the transferee.

            (4) "Secured party" means the holder of the chattel mortgage or security interest in accordance with Uniform Commercial Code - Secured Transactions, the pledgee or assignee of the chattel mortgage or security interest, or the agent of the holder, assignee, or pledgee of the chattel mortgage or security interest.

            B.(1) In addition to those remedies provided in Uniform Commercial Code - Secured Transactions, the holder of a chattel mortgage enforceable against third parties pursuant to Chapter 4 of Title 32 of the Louisiana Revised Statutes of 1950 or pursuant to this Part or the secured party under a perfected security interest subject to Uniform Commercial Code - Secured Transactions shall have the right to take possession of the factory-built home on default if all of the following criteria are met:

            (a) The factory-built home has been abandoned.

            (b) The mortgagor has not paid a minimum of two consecutive monthly payments on the date due pursuant to the terms of the chattel mortgage or security agreement.

            (c) A petition has been filed in a court of competent jurisdiction seeking an ex parte order authorizing the secured party to proceed pursuant to this Section. The judge shall sign the order only after the secured party has completed the following:

            (i) Posted a bond in an amount fixed by the judge, which shall be the amount stated in the suit.

            (ii) Executed an affidavit stating that the factory-built home has been abandoned.

            (iii) Presented to the court all documents necessary to prove that the secured party is the holder of the first mortgage on the factory-built home.

            (2) If the above criteria are satisfied, the holder or holder's agent may take possession of the factory-built home only after a ten-day period following the placing of written notice on the front door of the factory-built home by the sheriff or his designee. The written notice shall contain the name of the debtor, the fact that the secured party shall take possession of the factory-built home in accordance with this Section, the citation and docket number of the case wherein a court authorized the secured party to proceed in accordance with this Section, and the name and telephone number of the secured party or his agent. In addition, the secured party shall also advertise once in the official publication or newspaper in the parish in which the factory-built home is located at the time that the secured party takes possession. The advertisement need only state the names of the debtors, the fact that the secured party shall take possession of the factory-built home, and the name and telephone number of the individual to contact for further information. The sheriff shall be paid a fee of twenty-five dollars for the placing of the written notice as provided by this Paragraph.

            (3) When the mortgagor has notified the secured party in writing that the mortgagor no longer intends to occupy the factory-built home and has requested that the secured party retake possession thereof, the judge may issue an order waiving the provisions of this Section and may issue an order directing the Department of Public Safety and Corrections to issue a new certificate of title to the secured party or any other person who purchases the abandoned factory-built home at a private sale. When an order is granted by the judge, the entire indebtedness shall be cancelled.

            C. A secured party who has taken possession of a factory-built home pursuant to Subsection B of this Section shall immediately give notice to the debtor at the address specified in the chattel mortgage and at the debtor's last known address, if different, by registered or certified mail, return receipt requested.

            D. The debtor shall have twenty-one calendar days from the date of the secured party's taking possession to reclaim any personal property contained in the factory-built home or to redeem the factory-built home by paying to the secured party in cash the entire amount of delinquent payments, all interest and late charges due pursuant to the chattel mortgage, all costs of transporting and housing the factory-built home, and all advertisement costs. Nothing in this Section shall prevent the secured party from reinstating the promissory note and chattel mortgage or security agreement for a lesser amount at the sole option of the secured party.

            E. After the expiration of the twenty-one calendar days from the date of taking possession provided for in Subsection D of this Section:

            (1) The secured party may sell the factory-built home at public or private sale and apply the proceeds to the indebtedness. If there are mortgages or other security interests superior to that held by the secured party, the proceeds of the sale shall be paid first to those superior security interests; then the remaining balance, if any, shall be applied to the secured creditor's debt. Any funds received that are in excess of the indebtedness and superior security interests, including principal, interest, costs of repossession, and costs of sale, as each is provided for in the chattel mortgage or note, shall be delivered to the debtor, or if the debtor cannot be found, shall be deposited with the clerk of court of the parish in which the factory-built home was located prior to the secured party obtaining possession of the factory-built home.

            (2) The secured party shall obtain two appraisals of the factory-built home from two qualified appraisers, and the average of both appraisals shall be the established value of the factory-built home.

            (3) If the amount of the entire indebtedness due pursuant to the chattel mortgage or security agreement that shall be deemed accelerated at the time of the sale plus the costs of transporting and storing the factory-built home and advertisement costs exceeds the established value of the factory-built home, the secured party shall have the right to bid at any public sale, without paying cash, up to the amount of the total indebtedness, including the costs of transporting and storing the factory-built home and advertisement costs, or sell the factory-built home to itself for the amount of the indebtedness.

            (4) A secured party that sells the factory-built home subject to a chattel mortgage entered into prior to the time that Chapter 9 of the Louisiana Commercial Laws became effective at either public or private sale shall not have the right to seek a deficiency judgment from any debtor or other person, including any guarantor, liable on the promissory note or chattel mortgage. Nothing in this Section shall be construed to affect any agreement between the mortgagee and the selling dealer.

            F. A debtor or a third party seeking to recover for damages occasioned by a reclaiming of a factory-built home in violation of this Section shall be entitled to recover from the seizing secured party all costs and expenses incurred in the prosecution of the action, including reasonable attorney fees as determined by the court. If such an action for damages is dismissed by the court, the court may grant reasonable attorney fees to the creditor.

            G. After the secured party has fulfilled the requirements of this Section and has taken possession of the factory-built home, the court that issued the ex parte order provided in Subparagraph (B)(1)(c) of this Section shall order the Department of Public Safety and Corrections to issue a new certificate of title to the party that purchases the abandoned factory-built home at the sale provided for by this Section.

            Added by Acts 1983, No. 367, §1; Amended by Acts 1985, No. 715, §1; Acts 1989, No. 137, §5, eff. September 1, 1989; Acts 2001, No. 128, §19; Acts 2024, No. 287, §2.