Context

Act 765 of the 2026 Regular Session (SB 398) represents a comprehensive restructuring of manufactured and modular housing regulation in Louisiana. Effective January 1, 2027, this legislation repeals the existing regulatory framework and consolidates oversight under the LSLBC through its Residential Contractors Subcommittee. This post examines both the 2024 property-law background and the 2026 regulatory overhaul.

Key Dates
January 1, 2027: Act 765 effective—new licensing, bonding, warranty, and installation requirements for manufactured and modular housing.

Property-Law Background: Act 287 of 2024

Act 287 of 2024 (on the recommendation of the Louisiana State Law Institute) modernized the property-law framework for factory-built housing. Although Act 287 addressed property classification rather than licensing, it provides essential context for the 2026 regulatory changes. Key points include:

• “Factory-built home” umbrella term. Act 287 introduced this term to encompass manufactured homes (built to HUD standards under the 1974 federal act), mobile homes (built to voluntary or pre-1974 standards), and modular homes (built to International Residential Code standards).
• Movable-by-default classification. Factory-built homes are classified as movable property by default, even when placed on land, and remain subject to laws governing movables unless affirmatively immobilized.
• Immobilization/deimmobilization procedures. An owner may convert a factory-built home to immovable property by filing a declaration of immobilization in the parish conveyance records. Deimmobilization requires a comparable filing with the concurrence of any holders of perfected security interests or mortgages.
• Impact on title, security interests, and taxes. Once immobilized, the home becomes subject to immovable-property law. A previously perfected security interest in the home retains priority over existing and subsequent mortgages, similar to a purchase-money security interest in fixtures.

Act 287 thus modernized how factory-built homes interact with Louisiana’s property-law regime. Act 765 of 2026 builds on this foundation by restructuring the regulatory and licensing framework.

Transfer of Regulatory Authority

Act 765 transfers regulatory authority over manufactured and modular housing from the former framework to the LSLBC. The Residential Contractors Subcommittee, which assumes primary oversight, is expanded from five to nine members, with new seats allocated to representatives from the Louisiana Manufactured Housing Association. The legislation also creates the Residential Subcommittee Manufactured Housing Dedicated Fund Account to support the subcommittee’s expanded responsibilities.

This transfer reflects the broader LSLBC-consolidation trend discussed in Post 1 of 4, though Act 765 addresses a distinct regulatory domain—the manufactured and modular housing supply chain—rather than the general contractor-licensing reforms covered there.

Who Now Needs a License

Act 765 introduces comprehensive licensing requirements for virtually every participant in the manufactured and modular housing supply chain:

• Manufacturers
• Factory-built housing dealers
• Factory-built housing developers
• Salesmen
• Transporters
• Installers

The bill introduces several critical definitions—including “factory-built housing developer,” “factory-built housing dealer,” “transporter,” and “salesman”—that determine which licensing requirements and regulatory obligations apply to specific business activities. Practitioners should review these definitions carefully.

Warranties

Part II-A of Act 765, the “New Manufactured and Modular Home Warranty Act,” creates a tiered mandatory warranty structure:

• One year: General defects.
• Two years: Systems (including plumbing, electrical, and HVAC).
• Five years: Major structural defects.

These warranty periods create defined liability windows that contractors, dealers, and developers must factor into risk management and pricing strategies.

Installation Standards

Part III establishes minimum installation standards with specific technical requirements for pier, anchor, and tie-down specifications. The law addresses flood-prone area requirements and hurricane zone standards. Municipalities and parishes must inspect installation and setup, with disputes resolved by the Residential Contractors Subcommittee, which holds final binding authority.

Bonding and Insurance

The legislation imposes substantial financial security requirements:

• Dealers and developers: $250,000 surety bond or $50,000 irrevocable letter of credit.
• Installers and transporters: $25,000 surety bond.
• Dealers, contractors, developers, transporters, and installers: $500,000 general liability insurance.
• Manufacturers: $1,000,000 general liability insurance.

These thresholds may affect market participation, particularly for smaller operators.

Penalties and Enforcement

The enforcement provisions include:

• Civil penalties: Up to $2,500 per violation ($5,000 for intentional or habitual violations), with a maximum of $1,000,000 for a related series of violations within a single year.
• Criminal penalties: Fines up to $1,000 or six months: imprisonment for willful violations that threaten health or safety.

Statewide Preemption

State standards now expressly preempt all local construction and installation standards for manufactured and modular housing. This creates regulatory uniformity statewide, eliminating the patchwork of local requirements that previously complicated multi-parish operations.

Preparation Steps

With a January 1, 2027 effective date, industry participants have a defined window to prepare. The following guidance is organized by stakeholder:

Manufacturers

• Assess whether current operations require new or modified licensing under the LSLBC.
• Confirm that general liability insurance meets the $1,000,000 minimum.
• Review contract terms and warranty provisions to ensure alignment with the new mandatory warranty periods (one, two, and five years).

Dealers and Developers

• Obtain or confirm appropriate LSLBC licensing.
• Obtain the required $250,000 surety bond or $50,000 irrevocable letter of credit.
• Confirm that general liability insurance meets the $500,000 minimum.
• Review sales contracts for compliance with mandatory warranty terms.
• Evaluate advertising and disclosure practices under the new definitions.

Salesmen

• Determine whether activities fall within the statutory definition of “salesman.”
• Obtain appropriate licensing if required.

Transporters

• Obtain appropriate LSLBC licensing.
• Obtain the required $25,000 surety bond.
• Confirm that general liability insurance meets the $500,000 minimum.

Installers

• Obtain appropriate LSLBC licensing.
• Obtain the required $25,000 surety bond.
• Confirm that general liability insurance meets the $500,000 minimum.
• Review installation practices against the new minimum standards for piers, anchors, tie-downs, flood-prone areas, and hurricane zones.

Counsel

• Review client contracts and warranty provisions for compliance with the mandatory warranty structure.
• Advise clients on the immobilization/deimmobilization procedures under Act 287 of 2024 and their interaction with the new regulatory framework.
• Monitor LSLBC rulemaking for implementation details.
• Advise on local permitting strategies in light of the statewide preemption provision.
• Evaluate clients’ bond and insurance arrangements against the new financial-security requirements.

Conclusion

Act 765 represents a comprehensive modernization of Louisiana’s manufactured and modular housing regulatory framework. Together with Act 287 of 2024’s property-law reforms, these enactments create a substantially new legal environment for factory-built housing in Louisiana. Industry participants should use the period before the January 1, 2027 effective date to review their licensing, bonding, insurance, and contractual arrangements.

As members of Kean Miller’s Construction team in Baton Rouge, Trippe Hawthorne and Crystal Burkhalter advise contractors, owners, developers, and other construction-industry participants on licensing, compliance, risk management, and dispute resolution matters. In this four-part series, they examine the significant construction and contractor-regulation reforms enacted during Louisiana’s 2026 Legislative Session and their practical impact on the industry.