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".