Legislative Update December 2014 - Sale Homes in Community Landlord Tenant Conflict - Habitability Under Space - Political Reality Check

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The Manufactured Housing Landlord–Tenant Coalition met again this month to discuss a number of issues as we head into the 2015 Oregon Legislative Session that is just over a month away.

 

Lengthy Discussion on “Competing Sales Conflict”

 

The first of two issues that dominated the December meeting was “Conflict of Interest - Competing sales in the Community”.  Residents have a number of concerns on this issue and have a legislative champion in State Representative Nathanson (D-Eugene). 

 

Resident’s complaints that fuel this issue:

 

  1. The landlord is inconsistent in applying the screening criteria – stricter with resident owned homes and less strict with homes the landlord is selling; previously denied applicants are accepted when they re-apply for a home that the landlord is selling.
  2. The landlord is selling homes without a dealer’s license.
  3. Tenants claim that homes the resident’s turnover to the landlord to sell are not clear about how the sales proceeds are split; in some cases tenants claim they are getting significantly less than the landlords alleged completed price.

 

This issue is by far the most difficult issue the Landlord-Tenant Coalition has faced this year.  Emotions run high on both sides.  There is an abundance of law governing this from ORS 90.510 that requires rental agreements to include “Any condition the landlord applies in approving a purchaser of a manufactured dwelling ….”.   ORS 90.525 address steering to or by a dealer but does not address competing sales in the community.  ORS 90.680 is the primary Oregon Statute governing this issue. 

 

MHCO is concerned with any changes that further complicate the community owner’s ability to sell homes in his/her community or limits the ability of the landlord to control who lives in their community.  MHCO is also very concerned about opening the door to a flood of frivolous lawsuits or opening the door to “enforcement” by a state regulatory agency such as the Oregon Department of Consumer and Business Services (DCBS).

 

The coalition discussed a lengthy list of possible fixes – most of them opposed by MHCO.  Here is a sample:

 

  1. Establish an enforcement mechanism before adding any further regulation.
  2. Require landlord to enter a contract with the tenant describing how the home will be marketed and how any sale proceeds will be allocated.
  3. Add to ORS 90.680 that a landlord may not make false statements about the quality of a tenant’s home to a prospective purchaser.
  4. The landlord may not apply different credit or background criteria for approving an applicant who seeks to buy a home from a tenant when compared to an applicant who seeks to buy a home from the landlord.  Landlord would still be able to provide better or different sales terms.
  5. The landlord may not unreasonably require a tenant to make repairs to a home prior to approving a sale to a prospective purchaser who applies for tenancy.
  6. A landlord or tenant who sells a dwelling or home must promptly deliver title of the home upon completion of the sale. 
  7. Make DCBS responsible for regulation of sales of homes in manufactured home communities.
  8. Restore and expand Uniform Trade Practices act to include ORS 90.680.  In short this would allow all injured parties to enforce it, not just the Oregon Attorney General or District Attorneys.  Will explain this in more depth if this gets traction in the next landlord – tenant coalition.

 

The coalition did not reach consensus on any of these “solutions”.  MHCO is reviewing these and other possible options with MHCO attorney Phil Querin in an attempt to find some legitimate and palatable solutions that both landlords and tenants can support.

 

MHCO Negotiates Removal of “Habitability Issue”

 

The second issue discussed at the coalition was “Habitability: Connection to the Home/Ground”.  This issue addressed habitability duties of the landlord with regards to ground under the space – specifically utilities such as water, sewer and electricity.  Tenant’s want to change the statute so the landlord duties with regards to habitability go beyond connecting these utilities to the space – the landlord would be responsible for their maintenance under the space.

 

This is another issue that caused MHCO a great deal of concern.  After the meeting MHCO followed up with some of the tenant representatives who after a lengthy discussion decided not to pursue this issue.  With the “Habitability” off the table just the “Conflict of Sale” remains to be resolved.

 

Circumstances Will Dictate – The Political Realities of the 2015 Legislature

 

As mentioned earlier in this article, Representative Nathanson (D-Eugene) is a powerful advocated for stronger legislation governing home sales in communities.  In the 2015 Legislative Session she will be vice co-chair of the Joint Ways and Means Committee.   In this position she will be reviewing nearly every state agency budget including the budget for Oregon Department of Consumer and Business Services (DCBS).   She will be in a position to simply add a “budget note” directing an agency (most likely DCBS) to investigate and develop rules governing the sale of homes in a community.  This completely cuts MHCO and all landlords out of negotiating any outcome and instead allows a government agency to develop and implement rules on their own.  This could include the concept of state  “enforcement” which is a policy MHCO has long fought against and would guarantee that the compromise on unpaid property taxes on abandoned homes that MHCO negotiated over the summer would be dropped.

 

Allowing the state free rein over the issues of home sales is not an acceptable option  - a camel’s nose under the tent that we will regret in the years to come.   The prudent path forward is to continue to work in the coalition in January (two meetings are scheduled for January) and try to find some compromise on the issue of home sales.  The reality is that landlords engaging in the sale of a tenant’s home without a written agreement is extremely risky for the landlord.  One area of agreement may be in requiring a written agreement of the landlord is going to sell the tenant’s home.  Other issues such as applying the screening criteria equally to tenant sales and landlord sales could be part of a best practices approach. 

 

Compromise is not something that any of us – landlords or tenants find easy.  We all want our changes to statutes - rarely is one side or the other willing to give anything in return.  It is one thing to reject an issue and be able to walk away knowing that the issue is done with no chance of becoming law.  It is another to abdicate and walk away with the reality that something much more draconian is going to become law.  That would be irresponsible.  MHCO believes that the prudent course for now is to work in the coalition toward some solutions that address the concerns of the Legislature and Tenants, preserves the community owners ability to sell homes in his/her park and gives some confidence to residents that they are not being unfairly taken advantage of in the process. 

 

The bottom line is that if we work toward a solution we retain some control over the outcome. 

 

MHCO will keep you posted as we move forward in our negotiations in January.  In the mean time, we hope you have a safe and happy holiday season. 

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