New Oregon Law - Consignment Sales in Manufactured Home Communities

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By: Phil Querin, MHCO Legal Counsel

Current Oregon Law. ORS 90.680 is the statute governing the on-site sale of homes in a manufactured housing community. It previously contained no limitations on landlords who required, as a condition of tenancy, that residents selling their homes must enter into a consignment agreement with the landlord. That will change on January 1, 2016.

New Oregon Law. ORS 90.680 is now amended as follows:
1. It defines the term "consignment" to mean a written agreement in which a resident

authorizes a landlord to sell their manufactured dwelling or floating home in the

community for compensation.

  1. It prohibits landlords from requiring as a condition of occupancy, that residents enter

    into consignment agreements with the landlord.

  2. It prescribes the specific conditions under which a landlord may sell a resident's home

    on consignment:

a. The landlord must be licensed to sell dwellings under ORS 446.661 to 446.756;

i. The license may be held by a person other than the community owner, so long as there is common ownership between them;

b. The landlord and resident must first enter into a written consignment contract that specifies at a minimum:

  1. The duration of the contract, which, unless extended in writing, may not exceed 180 days;

  2. The estimated square footage of the home, together with the make, model, year, vehicle identification number and license plate number, if known;

  3. The price offered for sale of the home;

  4. Whether lender financing is permitted, and the amount, if any, of the

    earnest money deposit;

  5. Whether the transaction is intended to be closed through a state-licensed

    escrow;

  6. All liens, taxes and other charges known to be in existence against the

    home that must be removed before the resident can convey marketable

    title to a prospective buyer;

  7. The method of marketing the sale of the home (e.g. signs posted in the

    community; Internet advertising; print publications, etc.);

  8. The form and amount of compensation to the landlord (e.g. fixed fee

    with amount stated; commission percentage, etc.); and

ix. In determining the resident's net sale proceeds, the order by which the gross sale proceeds will be applied toward payoff of the liens, taxes, actual costs of sale, landlord compensation, and other closing costs.

c. Within 10 days after a sale, the landlord is to pay the resident their share of the sale proceeds, and provide a written accounting for all funds received;

d. The above-described process (i.e. through a written consignment agreement with landlord acting as the resident's representative) is the only permissible way a landlord may recover any commission, fee (however designated), or retain a portion of the sale proceeds of a resident's home in the community.

4. In cases in which a landlord is attempting to sell a home under ORS 90.680 and so is a resident in the community, the following new rules will apply:

  1. If a landlord advertises a home for sale within the community, a resident selling their home may do so as well, by posting a sign in a similar manner and location;

  2. A landlord may not knowingly make false statements to a prospective purchaser about the quality of a resident's home also being offered for sale;

  3. Note: Nothing prevents a landlord from selling a home to a prospective purchaser at a price or on terms, including space rent, that are more favorable than the price and terms offered for homes offered by residents.

5. Miscellaneous:
a. If a landlord requires a prospective purchaser to submit an application for

occupancy, upon request from the purchaser, the landlord must provide, a copy

of the application;

  1. Upon a prospective resident's request for a copy of the rental/lease agreement,

    the landlord may require payment of a reasonable copying charge;

  2. If the prospective purchaser agrees, a landlord may provide these requested

    documents in an electronic format;

  3. When a landlord considers an application for tenancy from a prospective

    purchaser of a resident's home, the landlord shall apply substantially similar credit and conduct screening to a prospective purchaser of a home from the landlord;

  4. A landlord or resident who sells a home located inside the community is required to deliver title to the purchaser within 25 business days after completion of the sale;

  5. If the sale by the landlord or resident includes paperwork whereby the seller is carrying back a contract or security interest and the purchaser is paying some or all of the purchase price with installment payments, where applicable, the landlord or resident is required to notify the county that the purchaser is responsible for property tax payments;

  6. If a person violates ORS 90.680 three or more times within a 24-month period, a person damaged thereby has a cause of action against the violator for the damages caused as a result of the third or subsequent violation or $500, whichever is greater.

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