Last month the manufactured housing landlord-tenant coalition met to continue discussing issues in preparation for the 2015 Oregon Legislative session. As mentioned earlier, the coalition is a group of manufactured housing community interests - tenant organizations, landlord associations, banking interests, builders - that meet once a month to discuss industry issues. Manufactured Housing Communities of Oregon has been participating in the coalition since the 1990s.

It's the Dog Days of Summer - As 2015 Legislative Issues Get Legs

There are four issues that the coalition is discussing: 1. Back taxes owed on abandoned MHs (ORS 90.675 (14) 2. Who collects the $6 assessment on manufactured homes to fund the Manufactured Communities Resource Center (MCRC) 3. Revising ORS 90.630 regarding the cure period for ongoing versus discrete violations 4. Manufactured home sales conflicts with owner sales versus tenant sales

1. Back taxes owed on abandoned MHs (ORS 90.675 (14)

The negotiations on this statute focus on the situation where the current market value of the abandoned home is more than $8,000 and the proceeds of the sale don't cover the landlord costs and the past due taxes that have accumulated. In these cases, the financial incentive for the landlord when there is no purchaser at the abandonment sale is to destroy the home. Most community owners are not willing to pay $12,000 in taxes for a $9,000 home.

MHCO's position is to reduce this tax burden on the community owner as much as possible either by completely eliminating the tax obligation or reducing it as far as possible. The county tax assessors proposed eliminating up to $8,000 of the tax liability. MHCO's position is that the amount waived needs to be higher so that the economics of keeping abandoned homes in the community pencils out. We will be back in August negotiating this issue further, but it remains MHCO's top legislative issue.

2. Who collects the $6 assessment on manufactured homes to fund the Manufactured Communities Resource Center (MCRC)

Currently, ORS 446.525 imposes an annual $6 assessment on all manufactured homes which are taxed as personal property, meaning that they are not real estate (on land with joint ownership of the MH and the land or in a co-op or with a 20 year lease). The county assessor is responsible for collecting the assessment and forwarding the revenue to OHCS for MCRC. The concept is to collect this special assessment with the annual property taxes owed. This applies regardless of whether the MH is in a park.

MCRC estimates that the special assessment plus the $25 registration fee for all parks generated $443,051 in FY 2013 and $422,627 in FY 2014.

There are an estimated 63,000 MHs in parks; at $6 apiece, that would be $378,000/year. But the assessment is paid by non-park MHs, too.

In the past couple of years Multnomah County and some other counties have expressed a desire to get out of the business of collecting the $6 assessment. Multnomah County is drafting a bill for the 2015 Legislative Session exempting it from having to collect the $6 assessment

County tax collectors feel that, as a matter of principle, they should only collect taxes for their costs and for other local governments. This is not a tax.

Some manufactured home residents don't pay property taxes, either because of the senior tax deferral program or because of the ORS 308.250 cancellation of taxes on low-value (currently $15,500) MHs. That means the county bills those residents only for the $6. And, with the early payment 3 percent discount, the actual amount owed is only $5.82. The counties' cost to collect this amount exceeds the amount collected.

The coalition discussed increasing the assessment to $10 per manufactured home and possibly use some of the extra money to compensate the counties or MCRC to cover the cost to collect. Another proposal would expand this fee to floating homes. MHCO's position is to avoid having the community owner collecting the assessed fee from the residents and then passing the accumulated fees on to the Oregon Department of Revenue. The issue remains open to further negotiation.

3. Revising ORS 90.630 regarding the cure period for ongoing versus discrete violations

Manufactured home community residents who own and occupy their MHs and rent the space under the home in a community can only have their tenancies terminated for cause. Those causes are defined, to some degree, in ORS 90.630. The statute allows the tenant to cure the cause, within the 30 day notice period, and thereby avoid the termination. In some cases, the result of this cure right means that a tenant may continue the conduct which is the cause up until the 30th day.

Over the years, many of you have contacted the MHCO office to discuss 30 day notices of eviction and in the process expressed frustration that residents who where disturbing the peaceful enjoyment of other residents or where violating the rules and regulations in the community could continue living in the community till the end of the 30 day period after the notice had been served. As many of you have said to me on the phone, So basically they can misbehave for 30 days and we can't do a thing...."

We continue to discuss what conduct should be stopped immediately and what conduct should be allowed the full 30 days to cure. Phil Querin has suggested using the distinction that anything that materially impacts other residents should require a shorter period to cure. Some feel this is too subjective - where do you draw the line: failure to mow grass; large campaign sign for Kitzhaber; loud music; foul odors coming out of a home etc.

We will continue to discuss this issue in the months ahead. MHCO recognizes this is an important issue to both community owners/managers and residents. It remains one of our top legislative priorities.

4. Manufactured home sales conflicts with owner sales versus tenant sales

There have been some alleged abuses in situations where residents are trying to sell their homes and the community owner has other homes in the community that he/she are selling. Some residents claim that this inherent conflict results in their homes either not selling or selling at a substantially reduced price.

The State of Oregon has been investigating this through the Department of Consumer and Business Services. It is not clear what action the State wants to take - or other legislators for that matter. One of the proposals considered by the state is to prohibit issuance of any type of Manufactured Structure Dealer license to any mobile home or manufactured dwelling park owner or onsite park management representative. Other less draconian measures would be to adopt a "best practices".

Needless to say this is an issue that MHCO that will be watched closely. MHCO opposes eliminating your ability sell homes in your community. This may be an issue we will have to fight in the 2015 Oregon Legislative Session.

(Editors Note: MHCO is fortunate to have over 25 association members who provide a variety of services to manufactured home communities. MHCO strives to maximize associate member's exposure to the broader community membership. All MHCO associate members are invited to provide articles for the MHCO web site. We welcome your involvement - just contact the MHCO office.)

By Todd Montgomery Simmons & Associates Insurance

There are many considerations taken into account by Insurance companies when looking into insuring a Mobile Home Park. The following are just some of the factors:

- Type of Park:
Are you family friendly, 55 & older, Seasonal, or possibly a combination?

- Management:
Is your park managed by a management company? Do you have an onsite manager? Does the owner visit the park often?

- Rental Units:
Does your park have rental units? Do you require renters to carry renters insurance? Are the rental units inspected inside and out at least annually?

- Utilities:
Is your park on city sewer and water? If on a well, how often is the water tested? Is it tested by an outside independent company? How often is trash disposed of?

- Recreational Facilities:
Playground? Horseshoe pits? Tennis courts? Basketball courts? Weight room or exercise equipment?

- Exposure to water:
Do you have a pool? Does it have a slide or diving board? Is the pool area completely fenced? Are the rules and regulations clearly posted? Are depths marked? Is there safety equipment available? Is there a Jacuzzi or hot tub?

Is there any other exposure to water? (lake, pond, river, etc.)

- Security
Is there a gate at the entrance to your park? Are there security patrols from an outside agency? Are any park activities open to the public?

- Streets:
Are the streets paved? Are there any pot holes, depressions, or major cracks? Do you have speed humps? Are they painted? Is a speed limit posted? Do you have street lights?

- Tree exposure:
Does your park have an exposure to large trees? Are they pruned regularly?

Finally, the two most important factors Insurance companies consider when insuring a Mobile Home Park...

How many spaces?
Gross annual revenue?

Feel free to contact me if anything you have read in this article creates a question for you.

Todd Montgomery
511 Center Street
Oregon City, OR 97045
(503) 768 - 9706
todd@simmons-ins.com
www.simmons-ins.com

If you're a landlord, you may use consumer reports to evaluate rental applications - as long as you follow the provisions of the Fair Credit Reporting Act (FCRA). The FCRA is designed to protect the privacy of consumer information report information and to guarantee that the information supplied by consumer reporting agencies (CRA's) is as accurate as possible. The FCRA requires landlords who deny a lease based on information in the applicant's consumer report to provide the applicant with an adverse action notice."

What is a Consumer Report?

A consumer report contains information about a person's credit characteristics

Fair Housing Update on Advertising Fair housing law prohibits housing providers and the media from printing or publishing an advertisement that indicates a preference, limitation, or discriminates based on a protected class. Currently state and federal law protects people from housing discrimination based on an individual's race, color, national origin, religion, sex, family status, or disability. State law also protects marital status and source of income, and some cities or counties protect age, sexual orientation and gender identity. What should be avoided? o Direct discrimination, such as "No Children" or "Healthy Only" o Pictorial inserts that only show non-disabled white adults communicate the same illegal message as the words "non-disabled white adults only" What else should I know? o Words that describe behavior - not status - are generally permissible. Examples of acceptable words are "responsible" or "reliable." If the word "independent" is used, it should be clear that a person with a disability who can live alone with some outside assistance is not excluded. o Words that describe an attribute of a dwelling unit are permissible unless the ad restricts who can live there. For example "family room" or "mother-in-law apartment" are okay as long as it does not really mean only a mother-in-law can live there. Similarly "view" or "within walking distance of downtown" are descriptive and acceptable. What would be illegal are "no blind persons" or "no wheelchairs". o Age. Age is a protected class only in some areas, but beware of any ads limiting age, because they may discriminate against families with children. o Senior housing and "adults only". Senior housing may exclude families with children, but it must meet certain criteria, including an intent to be senior housing. Using "adults only" does not express the intent to be "senior housing." The ad should indicate the housing is for those over age 55 or age 62 or seniors. o Words that do not directly prohibit a protected class but are "neutral" are permissible. Permissible are phrases like "choice location, "executive home," "private." But if you know that your client wants to use "code" words because of an intent to exclude protected class individuals, follow the spirit of fair housing and do not do it. Other suggestions -- o Use the HUD fair housing logo where possible o If a dwelling unit is accessible to persons with mobility impairments, mention it in your ads

The House Financial Services Committee Passes Bipartisan Legislation to Protect the Availability of Financing for Manufactured Homes (Editor's Note: As mentioned in the earlier article with the passage of similar legislation pending in the US Senate, MHCO is working with the Oregon Congressional delegation to ensure passage of this critical legislation.)

Washington, DC - The U.S. House Financial Services Committee today passed the bipartisan Preserving Access to Manufactured Housing Act (H.R. 1779) to protect the ability of manufactured home customers to buy, sell and refinance affordable manufactured homes, the largest form of unsubsidized affordable housing in the nation. Specifically, the bill would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) to address the criteria by which home loans are classified "high-cost" while keeping in place strong consumer protections. Sponsored by Representatives Stephen Fincher (R-TN), Bennie Thompson (D-MS), and Gary Miller (R-CA), the bill is also supported and cosponsored by an additional 110 House Members on both sides of the aisle.

"The ability to access affordable manufactured homes is vital to millions of low- and moderate-income Americans, and our industry is also an important economic driver and job creator in many communities across the country," said Nathan Smith, Chairman of the Manufactured Housing Institute. "This legislation would ensure that manufactured housing remains a viable affordable housing option, particularly in rural, distressed and underserved areas. We urge the full House of Representative to move swiftly to consider this important legislation." The Consumer Financial Protection Bureau (CFPB), through a rulemaking process required under Dodd-Frank, deemed that all purchase loans-including mortgages on manufactured homes considered personal property-be covered by the Home Ownership and Equity Protection Act (HOEPA). Under these guidelines, many small-balance loans used for the purchase of affordable manufactured housing are now unfairly classified as predatory and high-cost. Unfortunately, the CFPB failed to recognize the uniqueness of manufactured home loans compared to the rest of the housing industry.

While the cost of originating and servicing a $250,000 loan and a $25,000 loan are the same in terms of real dollars, the cost as a percentage of each loan's size is significantly different. This difference causes the smaller-sized manufactured home loan to potentially exceed the new thresholds and be categorized as a HOEPA high-cost loan.

Due to the increased lender liabilities associated with making a HOEPA high-cost loan, it is unlikely that these loans will be offered to homebuyers, denying access to necessary credit for new and existing manufactured homes. In fact, industry lenders have already stopped originating loans of less than $20,000 as a result of the new rule. According to the American Housing Survey, roughly half of the nation's 8.5 million manufactured homes have a purchase price of less than $30,000.

Manufactured home loans perform just as well, if not better, than loans on site-built counterparts and are serviced in a responsible and consumer-friendly manner. This is evidenced by delinquency rates among manufactured housing lenders that are half of what is reported in the larger mortgage market.

Eliminating this important source of financing would unfairly penalize low and moderate-income homebuyers who do not qualify for traditional mortgage financing needed for single family home ownership; do not have access to limited government-insured and GSE secondary market programs; or live in rural areas where affordable rental housing is scarce or non-existent. Additionally, millions of families could see the equity they have diligently built up in their manufactured homes wiped out because lenders would be unwilling to provide the financing needed for resale.

"Homeowners who purchased safe, energy efficient homes that they can afford rather than taking out a loan they could not pay back should not be punished, and we are thankful so many lawmakers have backed this effort to protect the more than 22 million Americans living in manufactured homes," added Smith.

The bipartisan legislation would also clarify that manufactured home retailers and salespersons would not be considered loan originators unless they receive compensation from a lender, mortgage broker or loan originator. The new CFPB definition of a loan originator is based on traditional mortgage market roles that do not equate with the business model of the manufactured housing industry, including lending and retail sales practices.

A similar bipartisan bill has been introduced in the Senate, the Preserving Access to Manufactured Housing Act of 2013 (S. 1828), by Senators Joe Donnelly (D-IN) and Tom Coburn (R-OK).