A True Opportunity to Purchase A Landlord’s overt offer to Tenants and CASA of Oregon (Part 4)

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By: Dale Strom

Dale Strom is a second generation Manufactured Home Community landlord. He is a Board Member, past President and current Treasurer of MHCO.

This is the fourth of a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR.

In the third part, the meeting with the tenants is held in Clatskanie, OR. The turnout of the tenants was overwhelming to the author, as well as the enthusiasm of those in the Clatskanie PUD board room. The Author ends this day feeling that this purchase will, more than likely, have a good chance to occur.

In this fourth part, the author now awaits hearing from CASA the Association is formed and learning about the steps being taken during the due diligence, fund acquisition and appraisal periods. Soon, the closing date, November 1, will be here.

*****

Now that I’m home, and just spoken with my onsite manager about what occurred at the meeting, unknowingly, I am entering the Michael Collins phase. Who is Michael Collins you ask? The end of part 3 of this series will give you a hint. I will bring the Michael Collins analogy full circle later in this article.

The meeting at the Clatskanie PUD with the tenants was on June 26, a Tuesday. Other than my manager, I get no feedback from anyone at the meeting. It was either that Thursday or Friday that I call the phone number of the Development Director. No answer; so a message is left on the voice mail. The purpose of my call was to get a summary of what occurred after I exited the meeting.

No response to my message. I’m not going to send another message or phone call. Maybe I’m not to know what went on. Maybe there are things in flux where the information that I’m looking for is not solid. I will wait.

On July 5, nine days after the meeting with the tenants, I get an email from First American Title that a Title Report will be sent to me for my review and approval. I am given a gesture of a happy closing from the Escrow Officer. I guess this purchase is going through.

In a sale to a tenant group in order to form a cooperative, all homes must be owned by the occupants. There can be no park owned homes in a cooperative. OK, this is a small part of this process that I wasn’t aware of. Not that it is a problem; but my manager lives in one home and another tenant that is on Section 8 assistance lives in another home that I both own. The home that my manager lives in shouldn’t be a problem. I can finance that home to her and her husband, change the ownership documents to their names and I will become a lienholder.

The other home may be an issue. How do you sell a home to a person that doesn’t have the proverbial “pot to pee in”? To sell Riverbend, I am willing to sell this home at a discount. I am willing to refund a down payment in order to secure a conventional loan. I am willing to be creative on the self-financing, if necessary, to close this deal. I just do not want to be that guy that evicts a Section 8 tenant when the time comes to close this deal. There are some issues here on how this will be taken care of before closing. (This issue is still not resolved as of the date of this article).

 Among the due diligence being conducted, the sewer lines were inspected on September 11. I wasn’t told of this; but how did I find out? An email was sent to me the next day that an RV tenant was very upset that the inspectors for the company were on her space and that she was going to call the police and report this situation. At first, I saw the humors part of this situation. The Park Association President sent out a notice of entry on to all spaces in the park newsletter for the purpose of the inspection. All tenants had been warned, what could be the problem?

Then it dawned on me, that I am still the owner, not the association. What I considered humorous turned to concern. Shouldn’t I have been warned about this? I could have been responsible for this situation. All landlords and onsite managers know that when access to a tenant’s space becomes necessary, they know immediately that form 51 from the MHCO.org website must be downloaded, correctly completed and then properly served. A lesson that I hoped is learned by the newly formed Association, is that the Association becomes members of MHCO. And that they learn how to properly serve a 24 hour notice of entry.

I am not sure if the police were called. I did not hear from them, so this situation, I’m assuming has blown over while cooler heads prevail.

Issue number 2 for the Association going forward. As a result of the sewer inspector’s visit is that an object, possibly a rock was blocking the drain from one of the home spaces. On Friday, October 19, I arraigned for a Roto Rooter type specialist to arrive the following Monday to remove that object. On Saturday the 20th, I received a call from the tenant that all drains from sinks, toilets, washing machine and showers were backing up. She could not live like this and something needed to be done; immediately. Knowing that bringing out the drain specialist on a Saturday on such short notice would cost a fortune. A better solution would be to put up the tenant in the motel across the street for 2 nights at a cost of $100 per night.

Questions for issue #2: How will the tenants handle this situation in the future? Will it be up to the tenant’s or the Cooperative to correct this situation? 

Issue number 3. The Abandonment. Unfortunately, on Friday, September 21, an RV tenant had a massive heart attack and died in his RV. All landlords know that the process for this situation should start with the attorney for the park and this process cost begins at or around $500 and escalates from there. There are also some requirements of the landlord to preform while this process takes place. In this case, the tenant’s cat was cared for and all perishable food was disposed of. Now the process of finding next of kin, lien holders, county tax collectors and others with an interest of this person and RV. 

Lesson to learn is that ORS 90.675 is not good. You will learn that it is expensive, it is lengthy, it is time consuming. You will get to know the family, lien holders, tax collectors, tax assessors and most important of all, your attorney. I wish ORS 90.675 on no landlord. I am convinced that ORS 90.675 is the payback that government representatives inflicted on the landlords they hate as a punishment just for being a landlord.

The common thread about the events regarding the sale from the time of the first meeting and to the present time, the communication between CASA and this author has been spotty at best. CASA has only reached out when necessary for a signature or any other guidance as needed.

Back to Michael Collins: While Neil Armstrong and Edwin Aldrin were taking the first steps on the moon in 1969, Michael Collins orbited the moon in Apollo 11. As Collins orbits went to the Dark Side of the Moon he would be out of radio contact with everyone for approximately 48 minutes at a time. During the process of this Opportunity to Purchase, there are many phases where all contact has been lost, but we are just assuming that all is going well when we come back from the Dark Side of the Moon. Seemed to work for Michael Collins.

Now, as we approach November 1st, let’s go to the closing, until…

What? The Executive Director of CASA is on the line with the Development Manager. Why are they calling now? Everything is going well, isn’t it? You want to do what?

In part 5 of this series, the Author gets the phone call from CASA. Even though there has been some periodic communication, this is a call from the Executive Director. It’s never good news when the closing date is near and the ED wants to speak with you. Are we still on? Have things changed?

 

 

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