MODEL BILLS

Manufactured Housing Tenant Protection Act

Summary: The Manufactured Housing Tenant Protection Act protects tenants from unreasonable evictions in a variety of circumstances.

SECTION 1. SHORT TITLE

This Act shall be called the “Manufactured Housing Tenant Protection Act.”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS—The legislature finds that:

1. Tenants of mobile home parks—called manufactured housing communities herein—are at risk of unfair evictions.

2. Once a home is situated on a manufactured housing community site, the difficulty and cost of moving the home gives the community operator excessive power in establishing rent levels, fees, rules, and other terms of tenancy.

3. Because existing law is inadequate, evictions, sale of the manufactured home community, and changes in the land use of the manufactured housing community may result in serious economic harm to residents, including the loss of their homes.

(B) PURPOSE—This law is enacted to protect the rights of, and provide a minimum level of security to, tenants of manufactured housing communities.

SECTION 3. MANUFACTURED HOUSING TENANT PROTECTION

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS—In this section:

1. “Manufactured home” means a residential structure, transportable in one or more sections, which is eight feet or more in width and 32 feet or more in length, built on an integral chassis, and designed to be used as a dwelling when connected to the required utilities. “Manufactured home” does not include travel trailers, camping trailers, truck campers, or motor homes which are primarily designed as temporary living quarters for recreational camping or travel use and which either have their own motor power or are mounted on or drawn by another vehicle.

2. “Manufactured housing community” or “community” means a use of land in which four or more lots or spaces are offered for rent or lease for the placement of manufactured housing and in which the primary use of the community or the manufactured home section thereof is residential.

3. “Community operator” or “operator” means an owner or manager of a manufactured housing community, including manufactured housing community employees and any subsequent purchaser of a manufactured housing community.

4. “Resident” means the owner of a manufactured home in a manufactured home community that rents the use of land from a community operator.

5. “Resident association” means any organization of residents representing at least 51 percent of the residents of the manufactured housing community, which is organized for the purpose of resolving matters relating to living conditions in the manufactured housing community.

(B) RENEWAL OF LEASE

1. Six months prior to the end of a resident’s rental term, a community operator shall offer the resident a renewal rental agreement with a term of at least two years that specifies a proposed rental amount and any fee or other lease changes.

2. If the resident does not accept the new terms, the community operator may initiate a binding appraisal process whereby an appraiser agreed to by the resident and operator shall determine the fair market value of the lot rent and other fees over the next two years. The amount determined by the appraiser, including any built-in increases, shall be binding for the next two-year period.

(C) GROUNDS FOR EVICTION

1. The community operator may terminate a rental agreement only for one or more of the following reasons:

a. Nonpayment of rent.

b. Violation of a community rule.

c. Disorderly conduct that results in disruption of the rights of others to the peaceful enjoyment and use of the premises, endangers other residents or community personnel, or causes substantial damage to the community premises.

d. The resident’s conviction of a crime, commission of which threatens the health, safety, or welfare of the other residents or the community operator.

e. The resident’s refusal to enter into a renewal lease.

f. Changes in the use of the land so that it will no longer be a manufactured housing community, if the requirements of subsections (E) and (F) are met.

2. Violation of a community rule or regulation shall only be grounds for eviction if all the following conditions are met: the rule has been properly promulgated; the rule is not unfair, unreasonable, or unconscionable; the resident had at least 60 days’ notice of the rule before the violation took place; the rule violation is likely to continue or recur; and continuing violation would have a significant adverse impact on the community or its residents. A rule violation may not be determined likely to recur unless the community operator gave the resident written notice of the violation, specifying the persons involved and its date, approximate time, and nature, and the resident failed to correct the violation or, in the case of a periodic rather than continuous violation, the violation recurred with such a frequency as to indicate that it is likely to have a significant adverse impact on the community or its residents. Violation of a rule is not a ground for eviction if the resident shows that it was not enforced uniformly within the community.

(D) PROCEDURES FOR EVICTION

1. The community operator may evict a resident only by court process. The grounds for eviction must be alleged in detail in the complaint, including the date, time, persons involved, and nature of any rule violation or disorderly conduct, and the date, person involved, case number, court, and offense for any criminal conviction.

2. No community operator may file a complaint for eviction for nonpayment of rent until 45 days have elapsed from the date the resident receives notice that rent is delinquent, and only if the resident has not tendered that delinquent payment during that 45-day period.

3. In any eviction action for nonpayment of rent, the resident shall be entitled to raise, by defense or counterclaim, any claim against the community operator relating to or arising out of such tenancy for breach of warranty, breach of the rental agreement, or violation of any law. The amounts which the resident may claim hereunder shall include, but shall not be limited to, the difference between the agreed-upon rent and the fair value of the use and occupancy of the manufactured home lot, and any amounts reasonably spent by the resident to repair defects in the manufactured housing community. The court, after hearing the case, may require the resident claiming under this section to deposit with the clerk of the court the fair value of the use and occupation of the premises less the amount awarded the resident for any claim under this section, or such installments thereof from time to time as the court may direct. Such funds may be expended as the court may direct.

4. Any court order for eviction based on the resident’s nonpayment of rent shall specify that the sheriff shall not execute the eviction for at least 30 days. If the order is based on nonpayment of rent, it shall specify that the resident can cure the eviction order by paying the full amount due up until the time the resident is actually evicted by the sheriff. If based on rule violations that are amendable to correction by the resident, the order shall specify conditions whereby the resident can cure the violation and remain in the tenancy.

5. Notwithstanding [Uniform Commercial Code Sec. 9-609], a secured party, in taking possession of a manufactured home, must proceed through judicial process.

(E) SALE OR LEASE OF COMMUNITY

1. If a community operator receives a bona fide offer to purchase or lease the manufactured housing community that the operator intends to consider or to which the operator intends to make a counteroffer, or if an operator offers the manufactured housing community for sale or lease (other than leases for individual lots to individual residents), the operator must send a letter, by registered or certified mail, to every resident, notifying them of the terms of the offer or intended offer (the “Sale Notice”). The Sale Notice must include the following:

a. The offered purchase price or lease payment;

b. The terms of any seller or lessor financing (including the amount, the interest rate, and the amortization rate of the financing);

c. The terms of any assumable financing (including the amount, the interest rate, and the amortization rate of the financing);

d. A legal description and a statement of the appraised or assessed value of property included in the sale or lease;

e. Any proposed improvements or economic concessions to be made by the operator in connection with the sale or lease;

f. A statement of the right of a resident association to purchase the community;

g. A statement that neither the operator nor any purchaser or lessee of the community may terminate a rental agreement by reason of the sale or lease of the community for two years from the date of the Sale Notice.

2. Any resident association shall have the right to purchase or lease the community, provided that the association meets the essential provisions of any bona fide offer of which the residents are entitled to a Sale Notice. The association shall exercise its right by notifying the community operator of the association’s interest in purchasing the community in writing by submitting a proposed purchase and sale agreement or lease agreement with terms substantially equivalent to those of the bona fide offer (the “Purchase Notice”). The association must deliver the Purchase Notice to the community operator within 90 days of receipt of the operator’s Sale Notice. The association shall have 180 days in addition to the 90-day period in which to obtain any necessary financing or guarantees and to close on the purchase or lease. If no resident association exists at the time the operator gives its Sale Notice, the residents may form one for the purpose of considering whether to exercise the right of first refusal, provided that the association represents at least 51 percent of the households of the manufactured housing community.

3. The community operator may not enter into an agreement to sell or lease the community for 90 days following the Sale Notice, unless the agreement expressly provides that it is contingent upon the failure of the resident association to exercise its right of first refusal. If the community operator receives a Purchase Notice from a resident association within those 90 days, the operator may not enter into an agreement to sell or lease the community for an additional 180 days after the initial 90-day period expires unless the agreement expressly provides that it is contingent upon the failure of the resident association to complete its purchase or lease of the community.

4. Within 30 days of the community operator’s receipt of a Purchase Notice, the community operator must provide the resident association with the following:

a. A survey and legal description of the community, plus an itemized list of monthly operating expenses, utility consumption rates, taxes, insurance, and capital expenditures for each of the preceding three years;

b. The most recent rent roll, a list of residents, a list of vacant units, and a statement of the community’s vacancy rate for each of the preceding three years;

c. Any available data relating to the past or present existence of hazardous waste either on the community property or in close proximity;

d. Any available data relating to the water, sewer, and electrical systems of the community; and

e. All income and operating expenses relating to the community for the three preceding calendar years. The community operator shall also provide any additional information that a prospective lender requires.

5. The resident association shall have a total of 270 days from the receipt of the Sale Notice to complete a transaction under the right of first refusal provided by this section. The length of any delays by the community operator in supplying information to be provided to the association as stated in this legislation, or any delay resulting from litigation involving the sale of and/or litigation affecting the marketability of the title of the manufactured housing community shall be added to the 270 days available to the association.

6. If the purchaser of a manufactured housing community decides to convert the community to another use within one year after the purchase of the community, the purchaser must offer the community for purchase by the resident association for a cash price equal to the original purchase price paid by the purchaser plus any documented expenses relating to the acquisition and improvement of the community property, together with any increase in value due to appreciation of the community. The availability of this right does not impact the community operator’s obligation to comply with the provisions of section (F) regarding notice in advance of change of land use.

(F) CHANGED USE OF THE LAND

If a community operator intends to discontinue any substantial portion of the manufactured housing community as a manufactured housing community, a resident association shall have the right to purchase the community, in accordance with the procedure set forth in section (E) above, except that the purchase price shall be determined by a binding appraisal process whereby an appraiser agreed to by the resident association and community operator shall determine the fair market value of the land. For purposes of the right of first refusal, a termination notice shall serve the function of the Sale Notice.

(G) ENFORCEMENT

1. The [Attorney General] shall enforce this section, and shall promulgate such rules as are necessary. The [Attorney General] may seek temporary and permanent injunctions for any violation of this statute, civil penalties in the amount of $10,000 per violation, and restitution on behalf of all residents or resident associations injured by such violation. In any such successful action, the court shall award costs and attorney’s fees. Where the community operator does not have the financial capacity to operate the manufactured housing community or where it is the most effective means of ensuring compliance with court orders, the court may order a receiver to operate the community.

2. A community operator that sells, leases, or transfers a community and fails to comply with the terms of this section shall be liable to the residents as a group in the amount of $50,000 or 50 percent of the gain realized by the community operator from the sale, whichever is greater, in addition to any other remedies available to residents.

3. Upon the request of a resident association, the [Department of Housing] shall assist the association in acquiring financing for the purchase of a manufactured housing community.

SECTION 4. SEVERABILITY

The provisions of the Act shall be severable, and if any phrase, clause, sentence or provision is declared to be invalid or is preempted by federal law or regulation, the validity of the remainder of the Act shall not be affected thereby.

SECTION 5. EFFECTIVE DATE

This Act shall take effect on July 1, 20XX.