QUESTION by CoMO-CAL:  Please explain the differences between a resident purchase of a park and a condo– conversion.

ANSWER: (By Deane Sargent):

A condo conversion (or subdivision) divides the park into individual ownership interests (like squares on a checker board) and each resident has to individually purchase their “square” and obtain the financing to do so.  Resident group condo conversions are difficult because:

  • They require a very high percentage of the park to participate (typically 80-90%).
  • Each resident must qualify and obtain their own financing.
  • Some owners are using condo conversions as a scam to get parks off of rent control.

An alternative to condo conversion is the purchase of the park by a resident owned corporation.  This is the method I use.  I believe it to be better and more successful because:

  • The purchase requires less participation (typically 60+%)
  • The major portion of the financing is made to the corporation, not to individuals, and such financing is easier to obtain.
  • The individual cash requirement is much less.
  • Residents needing financing for their share are ‘pre-qualified’.

ANSWER (By Dave Loop):

In a “condo conversion,” the space under each mobilehome is turned into a “subdivision lot.”  The lot is offered for sale to the homeowner whose mobilehome is sited on that lot.  To “buy in,” the homeowner has two choices:

Pay cash for the lot, or

Get financing to pay for the lot over time.

For park residents who are low income or seniors this can definitely be a problem.  Condo conversions divide parks into two groups – the “have’s,” who can afford to buy their lot, and the “have-not’s” who cannot.

In a “resident-owned corporation (ROC)” conversion, homeowners do not buy the “lot” where their home is sited.  Instead, each household buys a share in the ROC (their “homeowners association”).  The ROC buys and then owns all of the park’s land.  The property is not subdivided into “lots.”

Each homeowner’s “cash” requirement is much less for a ROC conversion.  This is because the ROC gets one large mortgage loan for the whole property, with better terms than individual homeowners would get.  Essentially, the ROC has much more “borrowing power” than the individual homeowners themselves.

QUESTION by CoMO-CAL: I’m confused about the part that a condo conversion requires a large percentage of the park to participate.  Does that mean a large percentage of the park must want to do a condo conversion?  I thought that residents HAD NO CONTROL over the process.  I do know that low income will still have “rent control.”  Also in the case of Carson Harbor, the park owner retains voting rights for all those spaces that do not opt to purchase, thus giving him majority control.  Is that how most condo conversions work?

ANSWER:  (By Deane Sargent)

There are two types of condo conversions: 1) those driven or initiated by the owner and 2) those driven or initiated by the resident group (which is the type I referred to in my prior email).   The two have significantly different aspects to them.

With Park Owner Initiated conversions in California, I suspect the owner’s motivation is to get the park off of rent control.  He couldn’t care less if ANY condos were sold.  You are correct that the resident have NO control.

The impact upon residents who do not or cannot purchase their condo interest depends upon the local regulatory situation.  If there is no prohibition to prevent it, I assume the owner can raise rents to what ever he thinks is the market.

How the owner controls the park after conversion depends upon the legal documents used in the conversion and California law.  This is not my area of expertise so I defer to some attorney somewhere.

With the Resident Group initiated conversions, a large percentage of participation is usually required because the group has to generate enough money to buy the park from the owner.



Deane Sargent,  PMC Financial Services
Providing organizational and financial consulting for resident groups, nonprofit corporations and affordable housing providers seeking to purchase manufactured home parks.
2365 Skyfarm Drive Hillsborough, CA 94010-6341
650-375-8043 650-375-8132 fax


David E. Loop
46 Knollwood Drive, Aptos, CA  95003
831-688-1293 (Voice & Fax)