Phil Querin Q&A: Dealer Purchases Home But Resident Has Not Paid Rent for Several Months

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December 21, 2016
Phil Querin
MHCO Legal Counsel
Querin Law

Question: A home was purchased by a local dealer from a resident who had not paid rent for several months.  The dealer then sold the home to another person who applied for tenancy and passed the screening criteria.  The landlord wants the past due rent ($900) paid before permitting applicant to move into the home.  Can the landlord go after the dealer to pay the past due rent?  Can the landlord keep the applicant from moving in until the $900 is paid?  Should the landlord have given some notice to the existing tenant, the dealer, and/or the prospective tenant, regarding how the unpaid rent should be handled?  What about other expenses the tenant who sold the home ran up, such as utilities, late fees, maintenance clean up expenses, etc.?  What do you suggest as far as notices to the dealer stating the amount of money owed?  The dealer is not the lien holder.

 

 

Answer:  Landlords should become intimately familiar with ORS 90.680, and then make sure their rules and rental agreements conform to what is allowed.  Set forth below is a summary of those portions of the statute that address your questions:

 

  • If the prospective purchaser of a manufactured dwelling or floating home desires to leave the dwelling or home on the rented space and become a tenant, the landlord may require the following:
    • That a tenant give not more than 10 days’ notice in writing prior to the sale of the dwelling or home on a rented space;
    • That prior to the sale, the prospective purchaser submit to the landlord a complete and accurate written application for occupancy of the dwelling or home as a tenant after the sale is finalized;
    • That a prospective purchaser may not occupy the dwelling or home until after the prospective purchaser is accepted by the landlord as a tenant;
    • That a tenant give notice to any lienholder, prospective purchaser or person licensed to sell dwellings or homes of the requirements of the resale requirements [Emphasis mine – PCQ];
    • If the sale is not by a lienholder, that the prospective purchaser pay in full all rents, fees, deposits or charges owed by the tenant prior to the landlord’s acceptance of the prospective purchaser as a tenant [Emphasis mine];
  • If the landlord’s rules and/or rental agreement requires prospective purchasers to submit an application for occupancy as a tenant, at the time that the landlord gives the prospective purchaser an application the landlord shall also give the prospective purchaser copies of the statement of policy, the rental agreement and the facility rules and regulations, including any conditions imposed on a subsequent sale[1];    
  • The following conditions apply if a landlord receives an application for tenancy from a prospective purchaser:
    •  The landlord shall accept or reject the prospective purchaser’s application within seven days following the day the landlord receives a complete and accurate written application[2];
    • An application is not complete until the prospective purchaser pays any required applicant screening charge and provides the landlord with all information and documentation, including any financial data and references, required by the landlord;
  • The landlord may not unreasonably reject a prospective purchaser as a tenant. Reasonable cause for rejection includes, but is not limited to:
    • Failure of the prospective purchaser to meet the landlord’s conditions for approval;
    • Failure of the prospective purchaser’s references to respond to the landlord’s timely request for verification within the time allowed for acceptance or rejection;
    • In most cases, the landlord must furnish to the seller and purchaser a written statement of the reasons for any rejection[3];
  • The landlord may give the tenant selling the home a notice to repair the home [e.g. for damage or deterioration] under ORS 90.632. The landlord may also give any prospective purchaser a copy of that notice.
    • The landlord may require as a condition of tenancy that a prospective purchaser who desires to leave the dwelling or home on the rented space and become a tenant must comply with the repair notice within the allowed period under ORS 90.632.
    • If the tenancy has been terminated for failure to timely complete the repairs under ORS 90.632, a prospective purchaser does not have a right to leave the dwelling or home on the rented space and become a tenant.

Obviously, the statute was drafted with tenant/purchasers in mind.  However, as long as the home remains on the space, the landlord has complete control over the situation.  In your case, I suspect the delinquent tenant made no effort to notify the landlord of his planned sale to the dealer.  However, that does not prevent him from imposing these requirements on the dealer if he wants to put a tenant in the park.

 

Going forward, it might be advisable for all landlords who have faced this situation before, to prepare a summary of requirements to give dealers when they purchase homes from tenants already sited in the park.  They may want to expressly address this in their rules, so tenants cannot say they didn’t know.  The written summary to dealers should clearly state that if a departing tenant owes monies to the landlord, repayment will be required before occupancy of the home will be permitted by a new resident.  [A more difficult question that is not addressed by the statute, ORS 90.680, is whether the landlord may prevent the dealer from removing the home without paying the past due sums.  I suspect the answer may be “Yes” a landlord may do so, but it would require my examination of the statutory storage or retaining lien rights, which is beyond the scope of this question. – PCQ]  

 


[1] The terms of the statement of policy, rental agreement and rules and regulations need not be the same as those in the selling tenant’s statement, rental agreement and rules and regulations.

[2] The landlord and the prospective purchaser may agree to a longer time period beyond seven day for the landlord to evaluate the prospective purchaser’s application or to allow the prospective purchaser to address any failure to meet the landlord’s screening or admission criteria. If a tenant has not previously given the landlord the required advance 10 days’ notice, the period provided for the landlord to accept or reject a complete and accurate written application is extended to 10 days.

[3] If a rejection is based upon a consumer report (as defined in 15 U.S.C. 1681a) for purposes of the federal Fair Credit Reporting Act, the landlord may not disclose the contents of the report to anyone other than the purchaser. In such cases, the landlord is to disclose to the seller in writing that the rejection is based upon information contained in a consumer report and that the landlord may not disclose the information contained in the report.