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Landlords
can collect homes at firesale prices by rejecting other potential buyers
then making bids themselves
Ten years ago, Deborah
Chapman bought a manufactured house in Strasburg, PA. Like many young
people, she had opted for manufactured housing because she couldn't afford
the down payment for a site-built home. When she was ready to trade up,
however, her landlord, who had written into the lease the right to approve
any subsequent buyer, rejected each of the six people who made an offer
on the $9500 home. He then made a lowball bid of his own for $2000.
Rather than abandon her home, Chapman paid some $1500 to have it moved
to a new location, where it sat empty until she sold it a year later for
$7000. She used the proceeds to pay legal costs she racked up fighting
her landlord, in the end netting nothing for all the trouble she went
through. Says Chapman, who is now the chairwoman of the National Foundation
of Manufactured Home Owners, "Had I been forced to sell, the landowner
would have sold my home for much more than he paid for it."
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No-Cause
evictions
Carolyn(18)
is 64 years old, and lives in a mobile home park where she rents a lot.
She is disabled, and lives on a fixed income: her monthly $512 SSI check.
When she came to Legal Aid for help, she had lived in the same park
for 9 years on an oral month to month contract. Over the years she had
built out a permanent addition to her home, planted trees and plants
around her unit. She was current on her rent. Then one day, she received
a warning that the park was considering giving her a 30 day notice.
She inquired at Legal Aid about her rights under the law, because she
could not afford to move on short notice. Their answer: none. She could
be forced to move with only thirty days notice from the landlord if
the landlord did not assert that she had violated the terms of her lease.
She would have to move with only three days notice if the landlord claimed
she had violated her lease.
The most important reason that manufactured homeowners need the option
of a long-term lease is that without one, they have no rights. Tenants
living on a month-to-month contract can be given 30 days notice at any
point in time, no reason required. Thirty days gives tenants neither
sufficient time to locate a new site nor raise the necessary money to
move the home. Nationally, 84% of mobile home occupants have lived in
a mobile home for more then 5 years, and over half plan on living in
their current homes for the rest of their lives.(19)
Yet for many, lack of a long term lease places their future on perilous
ground.
Without a long term lease, non-renewal may happen at any time- after
years in a park, or merely months later. The Roberts family of Austin
bought a new house, signed a month to month lease, and moved in. Just
months after investing in the move and installation, they had a disagreement
with park management over whether or not the husband was listed on the
lease. Management decided not to renew the monthly contract, and they
were forced to pay to relocate their home
Park
Closures
Many mobile home parks were
built decades ago on low cost land outside of city limits. Today, that
land is prime real-estate, often sold for large-scale commercial or
retail development. For example, recently Home Depot purchased a mobile
home park outside of Longview with plans to develop a store on the site.(20)
Sections of Bergstrom Mobile Home Park in Austin are being closed for
the opening of a manufactured home retail center.(21)
This year, the Grapevine City Council approved the redevelopment of
an 80-home park into a single-family residential area with homes priced
up to $300,000 on 7,500 square foot lots.
When parks close, dozens, if not hundreds, of homeowners are left searching
for spaces to relocate. Under normal circumstances, the number of available
spaces for used homes are limited. The closing of a park not only reduces
the supply, but also increases the demand for spaces. This is exacerbated
by rules in many parks excluding used homes, homes with metal roofs
or siding, or other limitations. All the residents of the old park end
up attempting to move to the same few spots that will accept their homes.
Many Grapevine residents told their City Council that they have been
unable to arrange to move their bulky homes and have considered abandoning
their investment. Despite five months notice, Bergstrom residents told
Consumers Union that they have also been unable to move and place their
homes elsewhere. A study of two park closures in Oregon estimated that
it would take 14 years for local parks to absorb the used homes displaced
by the closures.(22)
Rent
increases
Without a lease, renters
are at the whim of the owners. Month to month renters may have some
"understanding" about rent with the current owners, but such
"understandings" can leave the renter out in the cold, especially
if park ownership changes. Ownership changes can be relatively common:
one real estate web site currently lists 59 mobile home parks for sale,
representing about 4900 lots in Texas.(23)
Shortage of spaces, combined with the immobility of manufactured homes,
gives park owner/operators extraordinary leverage to exact large increases
in rents and other fees. According to AARP, rent increases of 50 to
60 percent are not unusual.(24) Rod Nelson
at Legal Aid of Central Texas (LACT) recalls one park where rents jumped
from $350 to $500 a month. For a renter on a fixed income, unbudgeted
rent increases can be devastating.(25)
Notes:
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18 Names of tenants have been changed to protect their
privacy in all stories.
19 Foremost Insurance "1999 Market Facts" Internet Source:
http://www.foremost.com/market_facts/
20 2000 Real Estate Market Overview: Longview-Marshall MSA, the Real
Estate Center of Texas A&M.
21 Interviews with Park Residents, Dec 2000 and Feb 2001.
22 "The Problem of Mass Evictions in Mobile home Parks Subject
to Conversion" Michael Sheehan and Roger Colton, Fisher, Sheehan
and Colton Public Finance and General Economics, December 1994 p. 9.
23 Internet Source: http://www.mobilehomeparkstore.com
24 AARP, 1991, p. 3.
25 Personal Interview, February 2001.
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