Simone Lawson
Interference with the sale of a mobile home can occur in several ways. For instance, Kort & Scott have been known to interfere with the sale of mobile homes in their parks by significantly increasing space rent for new buyers, which strips the equity from the mobile homes. In addition, mobile home park owners may provide false or misleading information about rent increases to deter buyers and sabotage sales, constituting fraudulent misrepresentation or tortious interference. Furthermore, some parks impose very high standards on new residents to purchase a mobile home, allowing them to buy the home at a lower price. These practices can hinder the ability of mobile home owners to sell their homes and may constitute interference.
| Characteristics | Values |
|---|---|
| Significant space rent increase for new buyers | Strips the equity from the mobile homes in the park |
| Impossibly high standards on new residents purchasing a mobile home | Purchase the mobile home at a drastically reduced price |
| Requiring proof of income three times the current space rent | Rent is well above fair market rents for the area |
| Providing false or misleading information about rent increases to deter buyers and sabotage sales | May constitute fraudulent misrepresentation, tortious interference |
| Addendum Clause that gives the park owner the Right of First Refusal to Purchase Tenant’s Mobile Home | Violation of MRL Civil Code §798.19.5 |
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What You'll Learn
False or misleading information about rent increases
In addition to issues with rental listings, there have been cases of mobile home park owners interfering with the sale of mobile homes by imposing significant rent increases on new buyers. This can strip the equity from the mobile homes, reducing their value. For example, Kort & Scott have been accused of increasing space rent for new buyers, which results in a loss of equity for mobile home owners. This practice can make it difficult for mobile home owners to sell their homes and may even drive potential buyers away.
To address these issues, some states have implemented laws and regulations regarding rent increases for mobile homes. For example, in Colorado, landlords must provide residents with at least 60 days' written notice before any rent increase takes effect, and they are limited to one rent increase per resident within a 12-month period. These regulations help to protect mobile home owners and prospective buyers from unexpected and excessive rent increases.
Furthermore, it is important for mobile home buyers to be aware of their rights and the potential for interference by park owners. In some cases, park owners may impose impossibly high standards on new residents or require proof of income that is significantly higher than the actual space rent. This can make it difficult for buyers to purchase a mobile home and may result in the park owner purchasing the home at a reduced price. Being informed about these practices can help buyers make more informed decisions and protect their interests.
Overall, false or misleading information about rent increases can have significant impacts on the mobile home market and the individuals involved. It is essential for buyers to be vigilant, informed, and aware of their rights to avoid being taken advantage of and to ensure a fair and transparent purchasing process.
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Addendum Clause in lease agreements
An addendum clause in a lease agreement is a document attached to the original lease agreement that introduces additional terms, conditions, or provisions without altering the original lease terms. Lease addendums are often used to address specific, situational concerns that may arise during the tenancy. For example, a lease addendum can be used to establish new rules, policies, or regulations not originally covered in the lease, such as a pet policy or smoking regulations.
Lease addendums are separate documents from the original lease, allowing for customized adjustments. They are commonly used in real estate transactions to modify an original lease or purchase agreement. Addendums can be used to describe financing terms, property inspection requirements, or to provide information regarding issues not contained in the original draft. For example, an addendum can be used to clarify the buyer's ability to obtain proper financing or to outline specific terms for unique amenities or features, such as a swimming pool or rooftop terrace.
It is important to note that lease addendums are legally binding and can be enforced as part of the lease agreement. Any violation of the terms of the addendum is considered a violation of the lease. Therefore, it is essential for both landlords and tenants to thoroughly review and understand the content of an addendum before signing. If an addendum is presented during the signing process or mentioned as a contingency, the tenant is generally required to sign it. However, if an addendum is presented after the lease has been signed, the tenant is typically not obligated to sign it and it cannot be enforced without the tenant's consent.
In the context of mobile home sales, an addendum clause in a lease agreement can be used to interfere with the sale of the mobile home. For example, Kort & Scott, a mobile home park owner, includes an Addendum Clause in their lease agreements that gives them the Right of First Refusal to Purchase Tenant's Mobile Home. This clause interferes with the sale of the mobile home by giving the park owner the first opportunity to purchase the home before it is offered to a third party. This type of clause may be considered a violation of laws or regulations, such as the California Mobilehome Residency Law (MRL), which prohibits certain terms or conditions in rental agreements for mobile homes.
To prevent interference with the sale of a mobile home, it is important for mobile home owners to be aware of their rights and the laws that protect them. For example, the California Mobilehome Residency Law (MRL) states that rental agreements for mobile homes should not include terms or conditions with respect to charges for rent, utilities, or incidental reasonable service charges that are different during the first 12 months of the rental agreement from the corresponding terms offered to homeowners on a month-to-month basis. Additionally, mobile home owners should be cautious of park owners who impose impossibly high standards on new residents or significantly increase space rent, which can strip equity from mobile homes and interfere with the sale.
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Unreasonably high income requirements
Mobile homes are often referred to as "manufactured homes", and while they can be a more affordable path to homeownership, financing one can be complex. The US Department of Housing and Urban Development (HUD) offers mobile home loans through the Federal Housing Administration (FHA) loan program, including Title I and Title II loans. A Title I manufactured home loan can be used to finance the purchase of a new or used manufactured home, to buy the land on which to place the home, or for a combination of both. Personal loans are another option, with amounts ranging from $50,000 to $100,000, but they typically have higher interest rates than mortgages and auto loans.
Chattel loans are another option for manufactured home purchases. These are specialised types of personal property loans that can be used to purchase mobile homes, with the property serving as collateral. They are faster and less restrictive than traditional mortgages, but they also tend to have higher interest rates. For low- to moderate-income homebuyers in rural areas, a USDA Single Family Housing Guaranteed Loan may be an option, as these loans offer flexible qualification requirements, including no minimum down payment or credit score.
However, it is important to note that only about 30% of manufactured home loan applications are approved, compared to more than 70% for site-built homes. Additionally, there is a social stigma associated with manufactured homes, and they can be difficult to resell.
In the context of mobile home parks, there have been instances of interference with the sale of mobile homes, including significant rent increases for new buyers, which strip the equity from the mobile homes. In some cases, park owners have imposed high income requirements for prospective buyers, requiring them to prove income three times the current space rent. This can be considered interference, especially when the space rents are well above the fair market rents for the area.
To address these issues, bills have been proposed to protect mobile home owners' ability to sell their homes without interference. For example, a bill sponsored by CRLAF, the Western Center on Law and Poverty, and the Golden State Manufactured Housing Owners League sought to require park owners to use reasonable standards when considering potential purchasers and when determining whether repairs or improvements are needed to transfer the title. Unfortunately, this particular bill failed on the Assembly Floor.
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High space rent increases for new buyers
For example, Kort & Scott purchased the Rancho Huntington Mobile Home Park in late 2012, and within a few years, the space rents had increased from $1,000 per month to $2,250 per month. This increase in space rent can be a burden for seniors living in the park, as they may not have the income to keep up with the rising costs.
In some cases, Kort & Scott may also have agreements with certain retailers, such as Blue Carpet Manufactured Homes or Monarch Home Sales, which allows them to list and sell mobile homes in their parks. This gives these retailers an advantage over individual homeowners trying to sell their mobile homes.
To protect themselves from interference, mobile home buyers should be aware of their rights and the market rates for space rent in their area. They should also carefully review any lease agreements and be cautious of addendum clauses that may give the park owner the right of first refusal to purchase the mobile home.
While there have been efforts to introduce legislation to protect mobile home owners, such as the failed AB-2026 bill, the issue of high space rent increases for new buyers remains a challenge for many people living in mobile home parks. These increases can impact the affordability and equity of mobile homes, making it difficult for both current residents and prospective buyers to navigate the market.
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Site rules that are breached by the proposed buyer
- Income Requirements: Some mobile home parks, such as those owned by Kort & Scott, require prospective buyers to prove income that is multiple times the current space rent. This can be challenging for buyers, especially when the space rents are significantly higher than the fair market rents in the area. This income requirement can be seen as an interference with sales and a potential barrier for many interested buyers.
- Right of First Refusal: In some cases, mobile home park owners include an addendum clause in the rental agreement that grants them the right of first refusal to purchase a homeowner's mobile home that is offered for sale to a third party. This practice is considered a violation of certain laws, such as the Mobilehome Residency Law (MRL) Civil Code §798.19.5 in California, which prohibits such clauses in rental agreements entered into or renewed after January 1, 2006.
- Space Rent Increases: Interference can occur when there is a significant increase in space rent for new buyers, which can strip the equity from the mobile homes in the park. This practice reduces the value of the mobile homes and can make it challenging for sellers to find buyers who are willing and able to pay the higher space rents.
- Age Restrictions: In certain jurisdictions, such as England, site owners can refuse a sale if the proposed buyer would be in breach of a site rule regarding age restrictions. This means that if the proposed buyer does not meet the age criteria specified in the site rules, the sale can be blocked.
- Pet Ownership: Similar to age restrictions, some mobile home parks have rules regarding pet ownership, and a proposed buyer who intends to keep a pet where it is prohibited can be considered in breach of a site rule. This could lead to the site owner refusing the sale.
- Failure to Meet Standards: Mobile home parks may have specific standards regarding the condition and maintenance of the homes. If a proposed buyer intends to purchase a mobile home that does not meet these standards, it could be considered a breach. This may include issues related to the physical state of the home, such as failing to keep it in a decent state of repair or not complying with specific aesthetic standards imposed by the park.
It is important to review the specific rules and regulations of the mobile home park and the relevant laws in the applicable jurisdiction to understand the potential breaches that a proposed buyer might commit during the sale process.
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Frequently asked questions
Interference with the sale of a mobile home can include providing false or misleading information about rent increases to deter buyers and sabotage sales. It can also include imposing high standards on new residents to purchase the mobile home at a reduced price.
Kort & Scott, a mobile home park owner, has been known to interfere with the sale of mobile homes by significantly increasing space rent for new buyers, stripping the equity from the mobile homes in the park. Another example is requiring prospective buyers to prove income three times the current space rent, which is considered an interference with sales when the space rents are above fair market rents.
In tort law, it is unlawful interference with the rights of a property owner for another person to interfere with the owner's enjoyment of their private property or any associated rights. The interference must be intentional rather than negligent, and it can involve both real and personal property.
Defences to property rights interference include consent, where the victim gives express or implied consent for the trespasser to enter the property, and necessity, where the trespasser invades the property for emergency reasons or to preserve their own interest.
