Manufactured home residents seek the first right of refusal

News / Industry

By Ron MacArthur, Cape Gazette staff, www.capegazette.com - Submitted June 19, 2007

Sen. George Bunting, D-Bethany Beach, calls Senate Bill 122 simple, but its effect is anything but uncomplicated in the ongoing debate over issues confronting residents of manufactured home communities in the Cape Region.

Bunting said the bill provides for a 90-day first right of refusal to renters’ associations in manufactured home parks if owners are planning to sell.

Currently when a park owner sells a park, homeowners’ associations do not have to be notified, and there is no system in place for residents to find out if their community is being sold.

Homeowners’ associations have been pushing for the legislation for several years. They say the trend toward community ownership may be the salvation of their way of life.

The legislation was drafted by the National Consumer Law Center and modified by local lawyers.

The veteran legislator, who has been an outspoken supporter of rights for manufactured homeowners, said the bill is as simple as it gets.

He knows that park owners object to the bill and are already lobbying against it.

“I don’t see where it’s intrusive,” Bunting said. “It has nothing to do with the price. It just gives the tenants 90 days to see if they can come up with the money.

“They have a vested interested because it’s their community, and all they are asking is for an opportunity.”

Under the bill, if an owner intends to sell, lease or transfer a park, an owner cannot make a final unconditional acceptance of any offer before first notifying the residents and the Delaware State Housing Authority of the price, terms and conditions of an offer that has been received and could be accepted. The residents will be given 90 days to make a counter offer through a nonprofit cooperative formed within the manufactured home park.

Under the legislation, a park owner who does not comply is subject to a $50,000 fine, or 20 percent of the gross sales price from the sale, whichever is greater. In addition, the residents will have the right to seek injunctive relief if a park owner is preparing to or does sell, lease or transfer a park without complying with the law.

Fred Neil, public affairs officer with the Delaware Manufactured Homeowners Association, said the bill is necessary to safeguard affordable housing in the state.

“One-fifth of the state’s population lives in manufactured housing, and if we don’t preserve affordable housing, where are these people going to live?” he asked.

He said by allowing homeowners’ associations to purchase parks, the state benefits. “This keeps the money in Delaware,” he said.

He said studies show out-of-state corporations that own manufactured home parks take millions of dollars out of the state each year.

Under the cooperative system, the association would own the land and all rent payments would go toward paying down the debt service and for maintenance of the park.

Neil said the association has provided training sessions for park residents on forming cooperatives.

“In the long run, there will be much lower lot rents. The ability to buy the land will end up being a tremendous value for the state,” he said.

Neil, who lives in a manufactured home park in Kent County, said he understands there is going to be opposition to the legislation. “We know we are going to be hammered by the landowners, but we will just have to work to counter their arguments.”

Legislative findings

The bill also contains extensive language concerning legislative findings regarding manufactured housing communities.

“Manufactured housing communities provide a significant source of home ownership opportunities for Delaware residents,” the bill states.

The General Assembly found that the increasing closure and conversion of manufactured home communities, combined with increasing lot rents, low vacancy rates and the high cost of moving a manufactured home, make living in manufactured housing communities insecure.

The legislature found that preservation of manufactured housing communities helps local jurisdictions meet affordable housing needs of its residents.

“Homelessness caused by closure of manufactured housing communities creates public health and safety problems, particularly for the elderly and children and undermines the local economy by depriving members of the workforce of housing,” the bill states.

“Owners of manufactured homes have significant investments in their homes, both in absolute terms and as a percentage of earnings and assets.”

And with time running out in the legislative session, a fair rent bill for manufactured home parks is also looming in the near future.