The following is taken from the Frequently Asked Questions portion of the MRL (FAQ Handbook is available through MH Life for $6 or FREE if you subscribe to MH Life Magazine):
Question # 62: Can the park’s income requirements on prospective buyers prevent a resident from selling their home?
Answer: Yes. The sale of a mobilehome located in a mobilehome park is a three-party, not two-party transaction. The buyer and seller must not only agree to the terms of the sale of the home, but the buyer must be approved for residency in the park by the park owner/management.
Management can withhold approval on the basis of: 1) the buyer’s inability to pay the rent and charges of the park, and 2) the buyer’s inability to comply with park rules and regulations as indicated by prior tenancies (see Civil Code §798.74). Although guidelines used by other landlords or public agencies for rental housing may be more lenient, many park owners impose higher income requirements to assure buyers will be able to afford future rent increases without causing the park problems, such as evictions.
● A prospective buyer must be approved for residency by the park manager/owner.
● A prospective buyer can be rejected if they don’t meet the income standards for the park.
AB-2026 Nuts and Bolts
AB-2026 was introduced in February 2014 to counter some park practices occurring when MH owners sell their homes. Some of the bill’s goals were to clarify park requirements for a prospective purchaser of a home to be approved by the park.
Here is a quick summary of what AB-2026 would do:
a) Require a list of information required by the park to determine if a prospective buyer is acceptable to the park.
b) Presume a prospective buyer has the financial ability to pay rent and other charges if he or she has been approved for a loan to purchase the mobilehome that the purchaser intends to occupy.
c) Require, if a loan has not been approved, then management must consider all assets and income, from all sources, to determine the prospective tenants financial ability.
d) Require management’s income standard must not exceed 3 times the rent and other monthly expenses (utilities…).
e) Require management provide documentary evidence if they deny approval based on information they believe shows the purchaser will not comply with rules and regulations.
f) Provide management can’t deny approval solely because the purchaser owns another mobilehome or real property.
g) Clarify that if denied, management must notify the purchaser in writing of the specific reason or reasons for denial.
h) Provide, if a denial, the purchaser and homeowner may request an in-person meeting with management.
i) Provide if approval is withheld for any unauthorized reason, management or park owner may be held liable for all damages.
j) Provide if a mobilehome will remain in the park, management may only require repairs or improvements to the exterior of the mobilehome as determined following an inspection by the appropriate enforcement agency.
Park Owner’s Reaction
The initial bill was formally supported by seven resident associations, three cities and a handful of others. That’s all!
A huge list of park owner associations, parks and managers (about 125 total) opposed the bill. And it didn’t take long for the park owners to react and circle their wagons. On April 10, 2014, Western Manufactured Communities Association (WMA – represents mobilehome park owners in California and several other western states. Address: 555 Capitol Mall, Suite 800, Sacramento, CA 95814. Phone: (916) 448-7002. Website: www.wma.org) and several park attorney groups made a request to start a write-in campaign asking assembly member Ed Chau to oppose AB-2026. Here are some excerpts from their sample letter: (This bill is) harmful, (places) numerous limitations and restrictions (on park owners), potentially a bad experience for management and park residents, (they are) negatively impacted.
Some Pitfalls of Such Legislation
By early May, AB 2026 was already “watered-down.” Three very important provisions (e), (i) and (j) were already eliminated! On May 29th the bill was defeated.
Here are some pitfalls of such legislation:
1) Park owners are well organized and have lots of money to spend to defeat a bill they oppose or to support a bill they favor.
2) MH owners are not well organized and have little money.
Prior to 1990, our lobbyist in Sacramento was supported by an organization 100,000 members strong. That meant folks were available to write, call or email legislators in support of a bill or opposed to a bad bill. MH owners don’t have that luxury today, as our lobbying group only has about 10,000 members.
MH Life has offered our lobbyist organization the use of the magazine and distribution network to reach an additional 25,000 homes, yet, to date, they have refused our offer.
Our friend Henry Cleveland (Aptos) has done an analysis of money spent in Sacramento. For the period 2011 thru the end of 2012, two park owner groups, the WMA and the California Mobilehome Park Owners Alliance (CMPA – represents California park owners organized by founder, Jeff Kaplan. Edelstein & Gilbert, legislative advocates. 1127 11th Street, Sacramento, CA 95814. Phone: (916) 443-6400) spent a total of $623,500 while our advocate spent $127,000 – a factor of 5 in the park owners favor!
Marginal Support From MH Life
We wrote about AB-2026 a couple times in the magazine and only marginally supported it because: a) It didn’t go far enough, b) in the end three very important provisions were taken out and c) New legislation without enforcement is at best ineffective. Park owners can still break the law at will without repercussion.
Why Is This Subject So Important?
We have written time and time again, interference of sales by parks is a huge problem, especially when linked with economic eviction (when you can’t afford to pay the space rent and are forced to sell). It’s like going from the frying pan into the fire! You go from having a place to live, although the rent is hard to pay, to not having any home at all and penny’s on the dollar from your equity.
Why Do Parks Interfere?
It’s all about money. If you can make millions, although it’s morally wrong, why not? Interference of sales costs MH owners millions of dollars every year. If you were one of those owners, you’d sit up and pay attention! Can it happen to you? Sure it can. It only takes an owner inclined to interfere with your sale. And he can usually “get away with it.”
Lessons to Be Learned
Sponsoring new legislation, getting sufficient support and ultimately having a new law passed and signed by the Governor is a daunting task. And then there is no guarantee a park owner or management will abide by the new law.
The legislative approach worked in past years when there were no laws protecting MH owners. But this strategy should have been tweaked, over 20 years ago, to focus on enforcement. It’s not too late! Let’s demand enforcement in 2015.
What else might work besides legislation (which isn’t)? Exposing unscrupulous park owners! That’s what their doing in England (PHRAA, http://www.phraa.co.uk/). We should do the same thing.