Section 18025 of the Health and Safety Code states that it is unlawful to sell, offer for sale, rent, or lease a manufactured home, mobilehome, or commercial modular unless its construction, heating, plumbing, and electrical equipment meets requirements.

In many cases when a unit has been damaged by fire, flood, or other calamity, the damage to one or more of these components is such that the cost of repair would be greater than the value of the unit after repair. When this occurs, the only way the unit can be legally disposed of is to declare it "salvage". The salvage can then be sold with the Salvage Certificate that will be issued by HCD and a bill of sale provided to the buyer.

If the unit is a total loss payoff and the "salvage" is retained by the insurance company, it is the insurance company's responsibility to make the application to HCD to declare the unit "salvage". This is the only way the insurance company may legally dispose of the "salvage" to a third party. If the unit is either uninsured at the time the damage occurred or the insurance company provides a settlement to the registered owner and the owner retains the "salvage", the registered owner is responsible for making the application to HCD to declare the unit "salvage".

In order for a damaged unit to be declared "salvage", the following documents and indicia (insignia, marks, or labels) must be submitted to HCD at the address above by the responsible party:

1. The HCD Certificate of Title or California Department of Motor Vehicles (DMV) Ownership Certificate or, if lost, an Application for Duplicate Certificate of Title (PDF), properly released and endorsed.
2. The last issued Registered Owner's Registration Card or, if lost, an Application for Duplicate Registration Card (PDF).
3. HCD decals, license plates, and Insignia or U.S. Department of Housing and Urban Development (HUD) Labels. If unavailable, indicate on a Statement of Facts Salvage Units (PDF).
4. Statement of Facts Salvage Units (PDF) explaining how and when the unit(s) was destroyed.
5. If the unit is subject to annual renewal, any fees that become due prior to the date the unit became damaged must be paid. Any fees paid prior to the application for salvage will not be subject to refund.
6. If the unit was subject to local property taxation, the county assessor in the county where the unit was located at the time the damage occurred must be notified that the unit has been declared salvage. Failure to do so may result in a tax liability being assessed against the registered owner.

Upon receipt of the documents and items listed above, HCD will issue a Salvage Certificate. The unit will no longer be subject to registration as long as it fails to meet the heating, plumbing, or electrical requirements.

If the unit is subsequently repaired, reconstructed, or otherwise brought back into compliance with Health and Safety Code requirements, as verified through an inspection by an HCD representative, registration with HCD will be required.