Landlord - Tenant Coalition Negotiations Concluded - MHCO Board of Directors Unanimously Vote To Support Proposal

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Last week the Manufactured Housing Landlord Tenant Coalition held it’s final meeting.  Some changes were made to the “In Park Sales Conflict” issue but the other three issues remained substantially unchanged from our meeting in January. 

 

The MHCO Board of Directors has reviewed the proposed coalition bill and voted unanimously to support the proposed legislation.  Phil Querin is working on some last minute adjustments to the “In Park Sales” section of the proposal.  The coalition proposal will go to Legislative Counsel early this week to be drafted into a House Bill. 

 

MHCO has been working on bi-partisan support for the proposal.  There will be Democratic and Republican sponsors.   All this should make it easier to pass the proposal this spring.  In all likelihood the public hearing for this bill will be in March.

 

Here is a brief summary of the proposed legislation:

 

 

1. Unpaid Taxes on Abandoned Homes

 

This issue was MHCO’s top legislative priority for the 2015 Legislative Session.  We are very happy with the agreement that we were able to reach which nearly eliminates all unpaid taxes on an abandoned home.

 

 

In general, in order to obtain the tax cancelation of unpaid taxes on an abandoned home the landlord will be required to file an affidavit with the county tax collector stating that the landlord will sell the property in an arms length transaction to an unrelated buyer who intends to occupy the property in that facility.  Once the home is sold by the landlord another affidavit or declaration with the county tax collector would have to be filed stating that the landlord has sold the property, the sale price and description of any costs incurred by the landlord to improve the property for sale.

 

MHCO will create these affidavits as new MHCO Forms for community owners or managers to utilize. 

 

 

In addition, on a separate issue there will also be and increase in the yearly fee paid by community owners paid to Oregon Housing and Community Services.  The department will charge $50 for communities with more than 20 spaces and $25 for those communities with less than 20 spaces.  Under ORS 446.525 the special assessment levied annual upon each manufactured dwelling will increase from $6 to $10.  This  $10 assessment is to be paid by the tenants.

 

2.  Right of First Refusal/Opportunity to Purchase – Closing Tenant Loophole – Restoring Capital Gains Tax Waiver for Community

 

There are some technical changes that need to be made to the law on community purchase that passed out of the legislature in February 2014.  The main issue is the waiver of state capital gains taxes if the community owner sells his/her community to the residents.  Oregon Legislative Counsel left this out of the bill last year.  

 

The other change is closing a loophole in the “right of first refusal/opportunity to purchase” procedure that benefits landlords by preventing a tenant acting in bad faith from dragging out the timelines.  The specifically the underlined language is the proposed language: “Within 15 days after delivery of the financial information described in subsection (3) of this section, or within 15 days after the end of the 10-day period described in subsection … of this section when tenants do not request financial information under subsection … of this section, if the tenants choose to continue competing to purchase the park, the tenants committee ….”.  Closing this loophole is to the benefit of the landlord.

 

3.  Habitability – Ground Support, Natural Gas and Garbage Cans

 

This issue has been significantly altered since it was first introduced last summer. 

 

One of the main concerns the residents have is being able to cancel a rental agreement or lease if the foundation of their home is partially washed away.  The proposed language is: “For manufactured dwellings only, a surface or ground capable of supporting the dwelling approved under applicable law at the time of installation and maintained to support the dwelling in a safe manner so that it is suitable for occupancy, not including normal settling of land as under any structure.”

 

Additionally, this section will address national gas or propane gas supply and connection to the space …“approved under applicable laws at the time of installation and maintained in good working order to the extent that the gas supply system can be controlled by the landlord, if that utility service is provided within the park pursuant to the rental agreement.”

 

And finally, this section will also address garbage cans.  “Except as otherwise provided by local ordinance or by written agreement between the landlord and the tenant, an adequate number of appropriate receptacles for garbage and rubbish in clean condition and good repair at the time of commencement of the rental agreement, and for which the landlord shall provide and maintain appropriate serviceable receptacles thereafter and arrange for their removal.”  Note:  This only applies if you state it in your rental agreements or if there is a requirement in your local ordinance.

 

4. Conflict of Interest With In-Park Sales

 

This issue along with the cancelation of unpaid taxes on abandoned homes consumed most of the coalitions time.  At this time it is the last issue we are struggling to resolve to mutual agreement. 

 

The tenants have agreed to drop Unfair Trade Practices Act expansion to include violations of ORS 90.680 (6).  The tenants have also decided against a “budget note” directing Department of Consumer and Business Services to regulate the sale of homes inside a manufactured home community. 

 

Instead, there will be an increase in violations of ORS 90.680 from $200 to $500, and provide for a larger damages award where a landlord has exhibited a pattern or practice of violations of ORS 90.680.

 

There will also be a requirement that there be a written agreement between the landlord and tenant when a home is sold on consignment.  This agreement between the landlord and tenant would include the sale price, the division of any earnest money deposit, and the status of property tax payments and any liens or security interests in the home.  It will also require the landlord account in writing to the tenant for the sale proceeds and pays within 10 days after a sale to the tenant.  MHCO will provide members with a proposed contract/from to use when the landlord is selling a home on consignment.

 

Additional items to be included is the requirement that the landlord may not apply more stringent credit or conduct criteria for approving as a tenant a prospective purchase who seeks to buy a home from a tenant when compared to a purchaser who seeks to by a home from the landlord.  This does not prohibit better or different sales terms including space rent.  This also does not prohibit a landlord from requiring a purchaser to visit the park in person prior to purchase.

 

One of the final areas of disagreement had to do with disrepair and maintenance issues. Changes made at the last meeting more completely address what a landlord can require – both of the selling tenant and the prospective purchaser – prior to approval. For the selling tenant there is an expansion or clarification of existing law. The requirements include back rent, fixing “disrepair or deterioration,” and any improvements, repairs so long as they were specified in the rental agreement, even if they are not disrepair, so long as they are not the age/size/style things and so long as the landlord requires similar repairs to homes s/he sells, whether owned by the landlord or on consignment. *

 

This means a landlord can require a tenant to replace the old skirting, at the time of sale, even if it is not disrepair, so long as the rental agreement says so, the theory being that the tenant knows in advance of this requirement so it is not unfair. *

 

There is also revised language about notice of disrepair; it need not be a termination notice under ORS 90.632; it could include a written warning notice. And remember that a landlord never waives disrepair; see ORS 90.412 (4) (c). With these changes, the landlord is allowed to require reasonable pre-sale approval repairs, without abuse to tenants. *

 

*From John VanLandingham’s 2015 Manufactured Housing Landlord-Tenant Coalition: Conflict of interest with in-park sales

7th draft: February 10, 2015

 

 

Summary:

 

MHCO will provide further analysis as we move forward in the Legislative Session as well as detailed information on how this legislation will impact you in your daily operation of your community.

 

Thanks to everyone at MHCO who worked so hard to make this bill possible - Adam Cook (Commonwealth Real Estate Services), Phil Taylor (HCA Management) and Dale Strom (Community Owner). 

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