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If the son is on parole, you may want to try to contact his parole officer. I fully suspect that there may be conditions of his parole that may apply to keep him out of the park.

At the risk of sounding harsh, it is a fact that "sexual predators" are not a protected class under the state and federal constitution. In short, you can have rules forbidding them to be in the park due to the proximity of children.

If you don't have such rules, you may want to enact some. But even though you don', I believe you did the right thing to require that he not occupy the home. You can and should do the same thing with regards to forbidding him to come into the park at all. If his family wants to see him, they can go to where he currently lives. The person(s) who has/have hired him to do odd jobs should be told that he cannot come into the park for ANY reason.

If you wonder whether this can be done without some specific rules, my response is that I would prefer rules to be in place. But even though you presumably have nothing on point, it would not stop me from banning him from the park. If he legally objects and wins, then it was a court that said he could come in - not you. Your main duty is to the park residents and their children. Better to try to remove him and fail than not to try at all.

Lastly, for your information, ORS 90.630(1)(c) permits a landlord to terminate a tenant if it is determined that they are "a predatory sex offender under ORS 181.585 to 181.587." From your question, I could not tell whether the adult son was on the rental agreement, but if so, he is a "tenant." The statute is not clear whether it can be applied to only a single tenant, without terminating the tenancy of the remaining occupants. Of course, the statute doesn'taddress the larger issue of whether you may prohibit him from coming into the park, but I believe you are fully within your rights, as discussed above. However, you should first clear any such action with the park ownership, and they should secure legal advice on how to proceed.

From one year to the next, the only certainty one can realistically expect is that rents will need to be adjusted just to keep pace with the utility increases that are coming one's way from the various providers. The annual questions are always, how much will they collectively go up, will they increase more than I am comfortable with recouping from my community residents, and will there be room to also keep up with inflation on my other increased operating costs? Double digit percentage rate increases aren't just exclusive to medical insurance companies. We have witnessed year-over-year, +20% increases with one sewer treatment provider alone and have seen huge increases from just about every utility with the possible exception of phone services.

Another concern about utility costs is the timing of when rates increase which do not necessarily coincide with the implementation of your next rental adjustment, leaving communities absorbing increased costs until the following year. Couple that with each and every time you try to recover these utility costs whereby you look like the quintessential greedy landlord, but in reality, you're just trying to maintain your margin. This should lead owners to question whether they can afford to continue to keep any utilities included in their rent.

A perfect illustration of a utility you should be proactive about is water, which is also normally the driving factor behind the sewer expense. You have probably heard that certain municipalities have increased their water rates despite a reduction in overall consumption. This has happened, in part, due to a need to fill a budgetary hole created by less revenue generated as a result of reduced consumption. Rates are high now and will continue to rise. A factor to consider is that over time, the EPA will have even greater scrutiny over water districts, increased regulation and testing requirements, and reduced maximum contaminant levels (MCLs) which will require better and more expensive treatment facilities. All this translates to more expense which will ultimately be passed on to the consumer. One thing is for certain - you don't want to be the last one in your service district to get out from under this payment responsibility.

You need to be aware that your business is under attack. Municipalities have grown to be creative in expanding their reach into your pocket by creating new sources of revenue by the addition of new fees and charges. As an example, the City of Oregon City has the following line item charges on its utility invoice: 1. Water Treatment, 2. Water Distribution, 3. Stormwater Management (aka surface water), 4. Pavement Maintenance (aka street sweeping), 5. Wastewater Collection, and 6. Wastewater Treatment. This is just one example, but this is not an exhaustive list. The City of Gresham has added what it claims to be a temporary police, fire, and park and recreation fee to their utility invoicing. The City of Everett has a charge on their utility bill for landfill fees. Tri Cities and Moses Lake have an emergency services charge on their utility billing. The City of Salem recently attempted to add street lighting and street maintenance to its list of fees and charges, but backed down under pressure from Commonwealth, MHCO, community owners, and community residents who protested their newly proposed fees which some considered to be a "tax". I'm sure there are also other examples which I have yet to learn about, but rest assured, new fees and charges are appearing with great regularity. The point is that we are under fire from the local municipalities which are attempting to circumvent the law by creating the equivalent of new taxes without them being referred to the voters as required by Oregon and Washington Law.

Many of the newer communities that were developed in the late 80's and early 90's opened their communities with utility charges separate from the rent while still paying the master bill and collecting the individual consumption charges from the residents in addition to their rent. Since then, there has been a growing trend for communities which have recognized this better model to pass through utilities to the residents over time to get out from under the burden of playing "catch up". This is more equitable to your residents, promotes conservation, and will more clearly show your valued community residents exactly what these municipalities are charging and how quickly their charges are increasing. Perhaps then, the residents may direct their ire to the appropriate party and focus their concerns in the direction it belongs with the goal of helping influence the cities or at least making them think twice before adding new fees and charges.

One final important point to consider, for decades residents and resident advocacy groups have lobbied for rent control in our states. We have successfully dodged those bullets each and every time, yet rent control bills surface every legislative session in one form or another. Imagine your state government passing legislation which restricts how much you can charge for the already affordable housing services you provide. Consider how much your utilities have increased over time and what would happen to your cash flow and the value of your community from not being able to recover 100% of this expense. Having utilities separate from the rent is a transparent pass through from the provider to the consumer, rather than a rent increase which would be restricted in some form, likely requiring justification with a potential review board.

If you have any utilities which are included in your rent, I strongly recommend that you consider passing this expense through to your residents. Commonwealth has a solution for accomplishing all of this with minimal cost to you. Please stay tuned for more information about our recommended solution to help you protect the investment you have made in your business in next week's follow up article.

If you have any questions or would like to discuss this, please feel free to contact me at 503.718.0622, Christy Mays - Washington Vice President at 425.952.2750, and/or Tom Petitt - Oregon Vice President at 503.718.0620

Article provided by Adam Cook, President of Commonwealth Real Estate Services. Adam joined Commonwealth in 1992 and has been particularly effective in utilizing his years of experience to improve the services we offer to our clients. During the past fourteen years, he has served as a board member in the Oregon community owner's trade association, Manufactured Housing Communities of Oregon (MHCO), helping to shape legislative efforts in Oregon. He served two years as the association's president.

Answer: That is a good question. First, to be clear for our readers, a "security agreement" is any agreement that serves as "security" on the property. For example, a trust deed is recorded on real property, and secures the promissory note. If the note is not paid, the holder can turn to the security, and sell it to satisfy the unpaid indebtedness.

Since manufactured homes are not real property, the document is different, but the concept is the same. A Retail Installment Contract is defined in ORS 83.510(12). Its purpose is to retain a lien upon the manufactured home to secure a buyer's obligations under the contract. Form 2A informs the buyer that the seller/dealer is claiming a security interest in the home for the duration of the contract, and that in the event of default the seller/dealer will have certain remedies to foreclose and/or repossess the home. Upon a buyer's full payment and performance under the Retail Installment Contract, the seller/dealer is required to mail to the buyer good and sufficient instruments to indicate payment in full and to release all security rights in the home.

If the sale transaction is closed in escrow, there is nothing more for the seller to do to secure his/her security interest in the home, as escrow will submit the necessary documents to the Oregon Department of Business and Consumer Services.

However, if the seller/dealer does not close the transaction through escrow, they will have to perform the following steps themselves:

1. Submit to the Department of Consumer and Business Services (DCBS) an application for an ownership document on behalf of the purchaser.
2. The application must be on a DCBS-approved form, and include the following:
   1. The year, manufacturer's name, model if available, and identification number for the home;
   2. Any existing ownership document for the home or, if none, the homes certificate of origin or other document evidencing its ownership;
   3. The legal description or street address for site where the home is or will be placed;
   4. If the home is sited in a manufactured housing community, the name of the community;
   5. The name and mailing address of each person acquiring an interest in the home;
   6. The name and mailing address of each person acquiring a security interest in the home; and
   7. Any other information required by the DCBS by administrative rule.
3. If the seller/dealer is unable to comply with Sec. 2, above, within 25 business days of the sale/closing of the home, he/she must provide a notice of delay to the purchaser. The notice must contain:
   1. The reason for the delay;
   2. The anticipated extent of the delay; and
   3. A statement of the rights and remedies available to the purchaser if the delay becomes "unreasonably extended."[1]
4. Fail to comply with the above could result in the seller/dealer becoming subject to revocation or suspension of their license or being placed on probation by the DCBS pursuant to ORS 446.741.
5. If they fail to comply with Sec. 2, above within 90 days of the sale/closing, they could become subject to criminal penalties under ORS 446.746 (1)(h).
6. However, if the home buyer is not in compliance with the payment terms of their purchase or security agreement with you by the 20th calendar day after the sale/closing, the seller/dealer is not required to perform the steps in Sec. 2 until 25 calendar days after the home purchaser is in compliance with the payment terms. [Note: This does not excuse a seller/dealer from complying with Sec. 3, above, even though the purchaser is late on his/her payments.]

[1] Note: The statute does not define "unreasonably extended," nor does it identify any particular remedies you might suggest. If such a delay occurs, you should contact your own legal counsel, since you do not want to write such a letter to the purchaser identifying their "legal remedies" - that would be up to the purchaser's attorney.

Answer: Yes, there are a few new laws plus a few new twists on existing laws. In a shameless plug, I encourage all park owners renting RV spaces to attend my RV Law Seminar at the MHCO Annual Convention. The RV seminar is on Monday, October 20th at 3:30.

Liability Insurance

One of the new laws we'll cover is the tenant liability insurance statute. This new law allows landlords to require RV tenants to obtain and maintain liability insurance during their tenancy. The amount of coverage may not exceed $100,000. To implement this policy, landlords can give RV tenants a 30-day notice informing them of this requirement. New RV tenants can be required to obtain insurance as long as you notify them in writing when they apply for tenancy.

If you have long-term RV tenants, it might be worthwhile to make liability insurance a requirement in your park. It adds another layer of protection for you as a landlord if a tenant does something causing major damage or injury in the park. (NOTE: The law does not apply to mobile home park tenants.) There are some restrictions on the insurance requirement, which we will cover in more detail at the RV seminar.

Noncompliance Fees Charged to RV Tenants

There have been a few changes to the laws which allow a landlord to charge tenants a noncompliance fee for certain violations. These fees can be a useful tool in getting tenants to follow the park rules without having to issue an eviction notice. Landlords can charge fees for (1) late utility payments, (2) failing to pick up pet waste, (3) failing to clean up garbage, (4) parking violations, (5) improper use of vehicles on the premises, (6) smoking in non-smoking areas, and (7) keeping unauthorized pets. The fees can't be charged without first giving a written warning and there are several other restrictions that we will cover at the RV seminar.

Section 8 Rental Payments

A new law now makes it unlawful for you as a landlord to refuse to rent to Section 8 tenants for that reason alone. The rationale is to give low income tenants the opportunity to rent anywhere regardless of how they make their income. While this doesn'tusually arise in RV park rentals, all landlords should be aware of the new law.

Prior Evictions, Arrests of Crimes

RV tenant applicants now cannot have their evictions considered if the case was dismissed or a judgment entered in the applicant's favor. Eviction cases 5 or more years old at the time of the rental application similarly cannot be considered in evaluating the applicant.

The law also specifies that only certain types of crimes can be considered in evaluating an applicant: (1) Drug related crimes, (2) crimes against another person, (3) sex offenses, (4) financial fraud, and (5) a "catchall" provision that includes any crime that might affect the landlord's or other tenants' property or safety. Arrests in the person's past on any of these issues that did not result in a conviction cannot be considered. However, pending arrests that have not been adjudicated at the time of the application may be considered.

RV Restroom Requirements

While not a new law, Oregon law requires that parks provide bathroom facilities to "vacation or recreational" campers. Less clear is whether parks are obligated to keep or install restrooms if they only rent to long-term residential RV tenants. At the RV seminar we will explore this issue and how it might affect your park - particularly if you have a mixed-use park of both RVs and mobile homes.

1. Inadequate response time to a resident's questions.

In an era when customer relations is the new icon of successful marketing it only makes sense to get back to a resident's question or action-item in a timely manner. What is timely? Within 48 hours, at least tell the customer that you are checking on the matter and will have an answer soon. That's better than taking a week with no answer, or worse, forgetting about it.

1. Poor resident relations & communications.

Like timely responses, overall customer communications is important. That includes such basic things as listening. Periodically walk the park just to talk with residents and see how they are doing. Does anyone need special help? Keep a note pad and pen in your pocket. Seek input. Better yet, issue report cards at least twice per year to see how they grade you. Help them coordinate social activities. Host spontaneous events like an ice cream social at the clubhouse. Ice cream is an inexpensive alternative to customers grumbling about invisible management and owners. But it all boils down to something quite simple: treat them like you want to be treated.

1. Lax rules & regulations enforcement.

Irregular enforcement of rules and regulations or poorly written rules can only lead to confusion and trouble. Make sure maintenance violations are quickly handled with the proper notice. But be fair, friendly and firm. If your rules seem to prompt lots of confusion and questions, get someone outside the park to read the rules with an eye to clarity and possible changes.

1. Poor park maintenance.

The visual appeal of your park is essential to both residents and non-residents who drive by your park. Always maintain its "curb appeal." Regularly check for light outages, broken fencing, faded paint and common-area cleanliness. Neglected streets are especially annoying to residents. Of special importance is your entrance. It should look sharp, upscale

and inviting. Invest in flowering plants to add seasonal color. A well-kept park makes necessary rent adjustments easier to accept.

1. Inadequate training of on-site managers.

If your park manager is not familiar with mobile home park residency laws, unintentional violations could result. Staff should be updated on the latest changes. don't assume they know. Training for on-site managers is mandatory. Bring them up-to-date with the latest aspects of insurance, OSHA and health safety issues, worker's compensation laws, Fair Housing and especially Mobilehome Park Landlord/Tenant Laws.

1. Poor marketing.

Like any business, you have to keep an eye on your local competition while you're keeping your park filled. But marketing is more than park fill and advertising. Marketing includes everything from market surveys to community and government relations, from promotions and incentives to get new residents, to good relations with current residents. Good marketing means keeping a close eye on the target audience you want and how you will sell and service them.

7. Mishandling delinquent rents.

Delinquent rents need quick action. Monitor them closely. Mishandling a notice can lead to delays/problems. Listen to a problem to decide if it's permanent/temporary. If it's permanent, act decisively. If temporary, you may want to set up a written payment plan if possible.

8. Getting the wrong insurance package.

Keeping costs down is important in any business, but so is risk management. That means insurance. The key is to look beyond the basic, generic policy and to seek property and general liability insurance with umbrella coverage. You want to insure your park for its actual insurable replacement value. Check the rating of the insurance carriers you are considering. Shop and compare rates/ratings.

1. Inadequate safety & accident prevention programs.

Insurance is not enough. Prevention is just as important. It's all about having a park safe for residents, their visitors and the park staff who serve them. Potholes in roads are unsafe. A child's cheerful bike ride could suddenly be ended by an unseen driver because bushes were not trimmed. Walkways must be well-lighted and free of cracks. Pools must be free of bacterial growth. Workers need equipment and training to avoid body movements that can injure them. Money spent on repairs, signage, equipment, and training is cheap compared to thousands in legal bills, insurance rate increases and time wasted.

1. Insufficient awareness of economic changes.

Like any business you have to cover costs and make a profit. In order to maximize your investment, keep abreast of changing local conditions around your park. An ill-informed decision could make your park unattractive to potential homeowners. For example, if a local plant closes or unemployment suddenly jumps, that's not a good time to raise rents. Even in healthy times, periodic small rent adjustments make more sense than one big increase that finds residents unprepared and prone to action. Subscribe to local newspapers. It's all about staying in touch and informed to make good decisions.

Note: This article orignially was published in MHCO's Community Update

While we know that anyone in a trusting relationship with the older person has the potential to be abusive, the dynamic is still predominantly intimate partner violence. This can be a long term relationship that has had abuse occurring all throughout the history of the relationship. Another form is a new relationship, possible post-divorce or widowed. In this relationship an older person may have experienced abuse in the past or this may be his or her first experience with abuse. Late Onset is a description of a relationship that has changed with an organic condition. The abusive person could have been controlling and verbally abusive and now is physically abusive. Or abuse may have not been present in the history of the relationship and now is, due to an organic condition such as dementia or capacity changes. Another dynamic is a person who was abused in the past and is now abusing the abuser. Believing, safety planning and collaboration are key in supporting the older survivor.

Take action by not letting the older folks in your lives be invisible. Try to notice when your older neighbor isn'taround or big changes occur in his or her lives. An adult child moving in, mobility changing, caregivers that aren'tconsistent or anyone that appears to be controlling the older person's life. Are the same support folks coming around or has something changed? Try to give that older adult some private space to have a safe conversation. Often, if the abuser thinks the older adult might be asking for help or telling others about the controlling behaviors, the abuser will retaliate. This could be punishing, physically and emotionally abusing or further isolation. Connecting with your local Adult Protective Services agency, Domestic Violence Agency and Social Service Senior agencies are a key way to help the older adult. The collaboration of these agencies can provide protection and support by the way of Elderly/Disabled Persons Abuse Prevention Act, criminal charges, emotional and resource support.

Answer. At first blush this appears to be an issue involving "hazard trees" under ORS 90.100(21). A "hazard tree" is one that:

1. Is located on a rented space in a manufactured dwelling park;

2. Measures at least eight inches DBH;[1] and

3. Is considered, by an arborist licensed as a landscape construction professional pursuant to ORS 671.560(Issuance of license) and certified by the International Society of Arboriculture, to pose an unreasonable risk of causing serious physical harm or damage to individuals or property in the near future.

Regarding hazard trees, ORS 90.727(3) (Maintenance of trees in rented spaces) provides that a landlord:

(a) Shall maintain a tree that is a hazard tree that was not planted by the current tenant, on a rented space in a manufactured dwelling park if the landlord knows or should know that the tree is a hazard tree.

(b) May maintain a tree on the rented space to prevent the tree from becoming a hazard tree, after providing the tenant with reasonable written notice and a reasonable opportunity to maintain the tree;

(c) Has discretion to decide whether the appropriate maintenance is removal or trimming of the hazard tree; and

(d) Is not responsible for maintaining a tree that is not a hazard tree or for maintaining any tree for aesthetic purposes.

Additionally ORS 90.740(4) provides that a rented space is considered uninhabitable if the landlord does not maintain a hazard tree as required by ORS 90.727 (Maintenance of trees in rented spaces).

When the hazard tree legislation was enacted, as best as I can remember, all of us involved in the drafting were looking up, not down. That is to say, we were focusing on large limbs falling on homes, or trees becoming top-heavy from a lack pruning and trimming, and falling over entirely. I do not recall any discussion about the root systems of trees causing dangerous conditions.

However, clearly, if the root system of a tree meeting the definition of a "hazard tree" causes walkways to buckle, it can create a danger to the residents and others using them. Accordingly, under a pretty clear reading of the above-cited statutes, this appears to be a landlord issue that needs to be addressed. As between a resident who does not own the space or the common area walkways, and the landlord who does - and who presumably has the means and insurance to protect against the risk - the financial responsibility rests on the latter. It is a cost of doing business.

However, what if the tree does not meet the definition of a "hazard tree," is located on the resident's space, but has a root system that is encroaching up into common area walkways causing damage? That is a more difficult issue. I say this because if it isn'ta hazard tree, say by girth, then the resident has the trimming and pruning responsibility. But as to that portion of the root system encroaching into the common area, I believe that is the landlord's responsibility. Certainly, the problem did not result from a lack of resident maintenance.

My conclusion is this: The landlord should want the common area walkways safe. If this means cutting out the offending root system, the landlord should do so. Why, because if a resident or their guest falls and injures themselves on a broken walkway, you can be sure the landlord will be sued. Again, it's a cost of doing business, and presumably the reason why smart landlords have good liability insurance.

[1] "Diameter at breast height" i.e. 4.5 feet. See: http://www.phytosphere.com/treeord/measuringdbh.htm

The SAFE Act has received a lot of attention lately by park owners, but did you know that it’s really only one law of many state and federal lending regulations you are required to comply with when selling homes on contract?

The SAFE Act requires you, the park owner, to either use a licensed Mortgage Loan Originator such as Blackhawk Capital Group or obtain your own origination licensing in order to sell your park homes on installment contracts. However, the greater issue is that obtaining those licenses for most companies is really a small step towards being fully compliant when acting as a creditor. Below are just a few of the other regulations that you need to follow as a creditor.

1) The Dodd–Frank Wall Street Reform and Consumer Protection Act (DFA) established the Consumer Financial Protection Bureau (CFPB) as an independent entity housed within the Federal Reserve Board (FRB). The newly created CFPB is the primary regulator for non-depository lenders with the broad authority to write rules to protect consumers, a.k.a. “borrowers”, from unfair or deceptive financial products, acts or practices. The CFPB will be collecting, investigating and responding to borrower complaints which can be easily submitted from the comfort of a resident’s home via the CFPB’s website.

The CFPB will be in charge of the major consumer protection laws including RESPA, TILA, HOEPA, HMDA, SAFE, Fair Credit, Interstate Land Sales Full Disclosure Act; Telemarketing and Consumer Fraud and Abuse Prevention Act; Inspector General Act; Privacy Act; Alternative Mortgage Transaction Parity Act (AMTPA); Electronic Fund Transfer Act (EFTA); Equal Credit Opportunity Act (ECOA); Expedited Funds Availability Act; Fair Credit Billing Act; Fair Credit Reporting Act (FCRA); Fair Debt Collection Practices Act; Federal Deposit Insurance Act (FDIA); Federal Financial Institutions Examination Council Act; Federal Trade Commission Act; Gramm-Leach Bliley Act (GLB) and more.

This would naturally imply that if you’re investigated because of a consumer’s complaint stemming from a denial of credit or foreclosure, the CFPB could easily extend the investigation to include an examination of all your lending practices.

2) The Mortgage Disclosure Improvement Act (MDIA) requires creditors to wait 7 business days after the delivery of the initial Truth in Lending Disclosure Statement before you can close the loan. In addition, if the APR changes by more than a specified tolerance from initial disclosure you’ll need to allow the borrower 3 additional business days. However, waiting periods can be shortened or waived if the extension of credit is necessary to meet a personal financial emergency. To shorten the waiver period, borrowers must prepare a signed and dated written statement, signed by all borrowers involved, detailing the specific emergency and requesting a waiver of the waiting period.

3) The Fair Credit Reporting Act (FCRA) places disclosure obligations on users of consumer reports and to ensure fair, timely, and accurate reporting of credit information. This means that you are required to notify the borrower when an adverse action is taken on the basis of such reports, such as if you deny someone a loan or offer them a smaller loan than what they applied for. In addition, you must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the borrower. We recommend that you provide separate notices to each borrower to protect yourself from violating their privacy. There are additional criteria for those of you that furnish information to credit agencies that will land on a borrower’s credit report.

4) The Truth in Lending Act (TILA) applies to each individual or business that offers or extends credit more than 5 times for transactions secured by a dwelling in the preceding calendar year. There are many applicable areas within TILA depending on how your loans are structured so we’ll discuss the act in a few general areas only.

• TILA limits the amount of fees that can be charged on certain transactions without additional requirements and it limits when those fees can be charged for all transactions.

• TILA mandates early disclosure of a creditor’s identity, amount financed, itemization of amount financed, APR, finance charges, total of payments, payment schedule, prepayment penalties and late payment fees.

• Creditors are liable for violation of the disclosure requirements, regardless of whether the borrower was harmed by the nondisclosure.

5) Equal Credit Opportunity Act (ECOA) prohibits discrimination of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Park owners may consider a borrower’s immigration status in order to ensure the borrower will be in the country long enough to repay the loan. You may not ask borrowers if they receive child support or alimony payments unless you notify them that they need only to provide this information if it will be used in determining their ability to repay. We encourage park owners to create written loan guidelines with clear underwriting standards to avoid violating fair credit laws. If you make an exception to your loan guidelines, be sure to properly document the reason for the exception and add it to the borrower’s file.

6) The Red Flags Rule requires creditors to implement a written Identity Theft Prevention Program to detect the warning signs of identity theft. There are four major components necessary to be compliant with the Red Flags Rule.

• First - be able to identify patterns, practices, and activity that signal identity theft.

• Second - incorporate business practices that will detect identity theft, “Red Flags”. Park owners using our loan processing service can rest assured knowing all borrowers are run through a red flag checklist which is provided after the completion of our underwriting process.

• Third - detailed response for any red flags detected by red flags.

• Fourth - your program must be updated periodically to reflect any changes or additional information you’ve discovered that will help reduce identity theft.

As you may have heard, Blackhawk Capital Group has developed a comprehensive, customizable loan processing solution to meet the needs of manufactured housing community professionals selling homes on retail installment contracts. Our goal is to provide you with a full compliance solution so that you can continue doing what you do best without having to learn all of the lending laws. You continue to be the lender and after the loan closes, you also continue to service your own notes. We simply facilitate the part of the transaction that requires a licensed mortgage loan originator. We facilitate the delivery of every form and disclosure that you will need to ensure you are compliant with the lending laws in your state. Currently, we are providing loan processing services in 11 states including Oregon, Washington, California, Utah, Idaho, Nevada, Arizona, Florida, Colorado, Maryland and New Mexico.

Our standard fee per loan is $895; however, we are proud to offer MHCO member communities a discounted rate of $800. To take advantage of this discount please email kmonte@bhcapitalgroup.com and be sure to include in your email that you’re a member of MHCO.

The FHAA

In 1988, Congress amended the Fair Housing Act (FHA) to prohibit not just discrimination on the basis of race, color, sex, religion, disability, or national origin, but also included familial status discrimination. Familial status is defined as " one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals."

Among other provisions, it is unlawful:

"To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ..."

Thus, a restriction on access or use of common facilities and amenities bases on age of a child (familial status) is a violation of the FHAA, absent compelling business necessity. Any such rule must be proved to be the least restrictive means to achieving a health and safety justification. What does this legalese mean to the community owner in practical terms? A full-blown trial, risks of heavy penalties, damages, and attorney's fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case depends on the facts and surrounding circumstances. In other words, each case is a test-case. In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

Children are as protected as any other protected class. Thus, a simple way to test a rule for FHA compliance is this: insert any other protected class in the place of "children" when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is "all children under 14 years of age must be accompanied by an adult resident when in the pool area." Then, how does this sound: "All Methodists must be accompanied by an adult resident ...." Obviously, such a rule is patently violative of the FHA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference, (e.g. "... gosh, if I had my druthers, I would rather not rent to families"). Another issue is use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or

national origin, (example, in an area overwhelmingly populated by non-English speakers, advertising only in English language publications). Other violations will be found where there are ads or statements made regarding applicants, including: "mature person;" stating an aversion to "families with children" or "teenagers in the building;" advertisements stating non more than "one child;" or, stating that the community owner does not "rent to children." Posting "Adult Community: at the entrance to a non-exempt community also violates the FHAA. Use of the word "adult" without more, constitutes a violation of the FHAA. There are no such thins as adult manufactured home communities, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The various rules cited by the courts as impermissibly restricting access or denying the use of the communities' facilities and/or areas on the basis of age, included the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implanting regulations and judicial and administrative interpretations) be promptly consulted.

• Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
• Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
• Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
• Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
• Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
• Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
• Use of the billiards room was restricted to residents over eighteen (18) years old;
• Use of the spa was prohibited to children under eighteen (18) years old;
• Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
• Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
• Parent or resident child or resident host must accompany children at all times in the pool or pool area.
• Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
• No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
• No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
• At 2 p.m. children are to be out of the pool area;
• Children are not to walk around the community without adult supervision;
• Minors under sixteen (16) years old are not permitted in the therapeutic pool;
• For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
• Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

The court held that these rules were not based on compelling business necessity and did not represent the least restrictive intrusions on familial status rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney's fees and costs for the private plaintiffs.

While the action had been brought as a class claim (in which all of possibly thousands of affected residents could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court's comments regarding the invalidation of these rules is telling and troubling. The court stated the age-restrictive rules were facially discriminatory. In other words, no matter how administered, the rules were invalid as drafted. Even if never enforced , such rules might dissuade a prospective applicant from applying for tenancy. These rules "...treat children, and thus, families with children differently and less favorably than adults-only households." "Describ[ing] parks as 'adult' parks are clear examples of illegal steering. Although they are not outright refusals to sell or rent or families with children, they indicate a preference for adults only and certainly discourage families with children from applying."

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

The absolute prohibitions include those rules that (1) prohibit all children under 18 (or 21) years old from using the billiard room and from riding bicycles, (2) prohibit all children under 16 (or 18) years old from using the therapeutic pool, (3) prohibit all children under 14 (or 18) years old from using the sauna or Jacuzzi, (4) require all children under 8 years old to be confined to rear fenced yard of family residence, and (5) prohibit all children from playing on community streets and any other common areas.

The court held that absolute prohibitions such as the foregoing are illegal. The regulations are not the least restrictive means to achieve health and safety objectives ("...prohibiting all 'children' from playing in common areas ... cannot be justified"). The same applies with the billiard room ("... it is unclear how a 17-year-old's access to a billiard room is any more hazardous to ... health or safety that a 22-year-old's access").

Supervision restrictions

The fundamental premise adopted by the court is that "[A]ny concerns that defendants may have are not necessarily linked to age, and any concerns about problem behavior can be address with the use of rules." Thus, the court invalidated blanket prohibitions of all 15-year-olds from using the therapeutic pool and all 13-year-olds from using the sauna or Jacuzzi

In certain instances adult supervision might less restrictively advance health and safety concerns ("assuming arguendo that defendants' concerns were more logically linked to the age restrictions, requiring adult supervision rather than imposing an absolute ban is clearly a less restrictive means ..."). But where to set the limit is uncertain. California regulations state:

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning – No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

Based on the Plaza Mobile Estates decision, it is needlessly legally risky to impose any supervision requirement. Clearly, a 14 year age limit for an adult supervision is not enforceable, not legal, and constitutes a violation of the FHA, despite former administrative decisions suggesting the contrary and California regulations cited above. Yet, the need for an age limit is strikingly clear. The same rule applies to use of spas and whirlpools. Certainly an adult supervision requirement should be reasonable[1], but eh court has ruled that such concerns are fro the parents, not the management.

A few apparently unassailable precepts

Given that this case raises many more questions than it answers, the ability to promulgate and rely on age-restrictive rules for access and supervision are certainly less than a matter of clarity. While the previous rulings concerning the enforceability of age-restrictive rules are in some doubt, a few precepts can be stated with some reliability. The first is that an outright prohibition of use or access to any facility or amenity cannot be allowed. Setting up selected hours for usage of a facility of amenity cannot be allowed. Less certain is the ability to promulgate rules requiring adult supervision of children of varying ages for use of facilities or amenities. It would appear that no supervision can be mandated for areas such as clubhouse, billiard room, library or common areas.

Establishing minimum age requirements for supervision: A foray into the uncertain

The "14 and under" requirement of California regulations for pool supervision is a should not a must provision. Hence, management cannot require supervision of 14 years of age and under. The only clearly legal position is not to require supervision, and let it be for the parents to take personal accountability and responsibility for their children. The court makes this statement:

"... there is nothing magical about the age 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement."

The courts have intervened on occasion to require discrimination against children for their own good and government does so all the time. For example, you cannot vote until you are 18, drink alcohol until you are 21, cannot drive until you are 16.[2] However, housing providers subject to the FHA may not rely on or use the same governmentally-established restrictions in developing their rules and regulations despite the dangers posed by the common area facilities.

Another example: Pedestrian injuries are the second greatest cause of harm to children from five to 14 years of age. See the National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997.[3] However, it is illegal to have a rule and regulations which states that "children are not to walk around the community without adult supervision."

Is it unreasonable to require adult supervision within the common areas of a manufactured home community? It would seem that such a rule is reasonable. However, for a community owner, such a rule violates the FHA. On the other hand the Consumer Products safety Commission urges supervision of children while on a playground for example (Consumer Product Safety Commission, Public Playground Safety Checklist, CPSC Document #327: "10. Carefully supervised children on playgrounds to make sure they're safe"). The federal law states that the parents are responsible for their children, not the management.

Previously sustained rules

The courts have previously allowed the following rules. This information may be largely historical at this juncture, for it remains unclear whether or not they remain viable in light of the Plaza Mobile Estates decision (these rules were sustained under the previous "reasonableness" test, not the "compelling interest" basis test):

1. Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
2. A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
3. Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
4. In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine – in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
5. One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

However, it is too much to criticize or impugn the court for adhering to the letter of the law, and not legislating by "judicial fiat." The court interprets what the law is and does not legislate. That is the job of Congress and more pointedly in this case HUD (in its rule-making powers). The FHA prohibits discrimination, period. The federal law makes NO exceptions; exceptions to familial status rights is the job of HUD. It is not the court's duty. The court is not the Legislature.

The need for uniform guidelines to inform the housing providers of permissible restrictions

HUD should provide guidance for housing providers and establish bright line tests for common sense age-restrictive rules. HUD should defer to other legislative judgments made for child protection by allowing community owners to replicate existing laws in their rules and regulations. Model regulations for protection of the young could be published. HUD could establish a rule pre-approval procedure.

Community owners just want to comply with the law and provide reasonable requirements for protection of children. But now, even experienced lawyers cannot intelligibly predict the enforceability of any age-restrictive rules. At this time, attaining any ascribed legitimacy of a rule only follows after an expensive legal defense with a heavy burden of proof requiring compelling business necessity. A conciliation agreement binds the complainant. If another resident complains the next day, the conciliation agreement is worthless as a defense to the rule. This is an inconceivably inefficient manner of testing rule validity. The costs to business in such concerns vastly outweigh the benefit to be achieved. The cost to the consumer in spreading the expense of this exercise could be largely obviated if the housing provider had some guidance in defining acceptable rules for promotion of health and safety. The suggestion of administering proficiency tests is a null and void concept. The liability for negligently administering such tests, seeking and paying for qualified testers, and then excluding the non-proficient residents will not be pursued by a single housing provider.

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service – disseminating information and facts – not discriminating against children.[5]

You may also consider consulting with HUD in advance of amending rules and regulations. IF HUD even informally opines that a proposed policy is not defensible, or that no comment can be offered, at least the community owner can better assess the risk faced with a new rule and regulation. For example, if a resident complains that a particular resident who has open sores due to infection with the AIDS virus desires to use the swimming pool, can the management require that resident to stay out of the pool?

When faced with the question, the manger called to advise that she was not sure how to proceed. While administrative regulations require a doctor's letter stating that no public health or safety risk was posed by the patient's use of the pool, I consulted with HUD before announcing the management policy.

Finally

All the community owner wants is to know what the law is! What we do know is certain rules, certain practices reflecting what the law is not. But it is grossly unfair to relegate the duty to set standards on management. Having read this article, can you now, safely amend your rules to impose such a rule? No. No attorney can give an absolute assurance that such a rule will be sustained until ruled valid in a court. Until a court actually rules on the validity of the rule, or HUD or DFEH offers guidance on their interpretation of the rule, there can be no assurance of what an will not be permitted in developing age-restrictive rules and regulations. The best policy is to eliminate any and all age restrictive rules and regulations to avoid FHA claims.

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

Terry Dowdall has specialized in manufactured home communities' law since 1978. His firm, Dowdall Law Office, APC is located in Orange County and Sacramento, with a practice limited exclusively to the manufactured housing industry. Mr. Dowdall serves as a legal advisor on WMA's Legislative Committee and has authored publications for the Continuing Legal Education of the State Bar. He is a frequent contributor to the WMA Reporter and facilitator at WMA educational seminars. He can be reached at 714-532-2222 (Orange) or 916-444-0777 (Sacramento).

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools – drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures – CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[2] Municipal curfew regulations abound which restrict children. Los Angeles is typical. No one under 18 years of age is permitted in public places during school hours (" ... present in or upon the public streets, ... or any place open to the public during the hours of 8:30 am and 1:30 pm"). L.A.M.C. 45.04. The same restrictions apply after 10 pm. ("... any minor under the age of eighteen years to be present in or upon any public street, ... between the hours of 10:00 pm on any day and sunrise of the immediately following day; ...."). L.A.M.C. 45.03. Regulations for pool halls E.g. 17 (Midland Mi. Mun. Code Sec. 15-34) and 18 (1063-B. Pool halls. Public Laws of Maine) year age requirement), are commonly promulgated for the health and safety concerns for minors. It is unsafe for a park owner to rely on local or state laws in this respect in drafting rules and regulations.

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic–related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[4] According to the U.S. Products Safety Commission: "The U. S. Consumer Product Safety Commission estimates that between 1985 and 1989, the latest period for which data are available, there were 1,200 amputations of children's fingers because of contact with exercise bikes. Most children were under the age of five. Many of the injuries occurred when the child's fingers touched the moving bike wheel or the chain and sprocket assembly. The Commission is concerned about the severity of injuries to children, especially because the hazard may not be obvious. Therefore, the commission warns parents always to keep children away from exercise bikes. Never use a bike without a chain guard, and when not using the bike, store it where children cannot get to it. Children's fingers can be amputated if they touch moving parts of exercise bike." Prevent Finger Amputations to Children From Exercise Bikes: Safety Alert: CPSC Document #5028.

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality – they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles. 

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

(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.)