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Both Landlords and Tenants agree of the importance of sub-metering; it is a win-win proposition. Enduring years of Landlord/Tenant Coalition, one of the most daunting tasks was demonstrating Landlords do not have safes' locked full of money. Financing options simply did not exist to fund mandatory sub-metering. Where were Landlords to find upwards of $750+ per homesite to install water sub-meters? Of course, Landlords proved their argument and negotiated the right to unilaterally amend rental agreements to permit community-wide sub-metering; creating provisions to recapture installation expenses by billing Tenants. Considering a new program now available, I believe every Landlord should sub-meter sooner than later!

Now available is a sub-meter and installation program at zero expense to any Landlord wanting to install new or replace old sub-meter systems. No applications, no qualifications, and no money down gets you state of the art wireless monitored sub-meters (water, electric, and gas are all available). What's the catch? ... the Landlord signs a 10 year Billing Agreement with the provider, in which the Tenant pays. So, how does it work?

First, the meters are purchased/installed/administered/maintained/repaired/monitored/insured/read/etc. by an Independent 3rd party. Just as all meter reading companies, this 3rd party charges a monthly fee for their service ... it is their cost of doing business. In Eugene, this 3rd party charges nearly 1/2 less of what EWEB (Eugene Water and Electric Board) charges it's customers. Second, per ORS 90, the 3rd party bills the Tenant the cost of the sub-meter and installation over a minimum of 60 months. The sub-metering process is complicated; no worries, this 3rd party is experienced, has been in business for nearly a decade, has all the systems and sample notices in place, and handles the entire process on behalf of the Landlord.

The Bottom line: local government agencies and utility companies use Landlords to pass through their exorbitant "fees" and rate increases, in which Landlords are forced to carry until the next "rent" increase ... making the Landlord the greedy bad guy. Prior to sub-metering, utility expenses were 23% of my rent; my monthly invoices now line item sub-meter every utility possible. My rents are now very competitive within the market and I have direct control over costs. I see every reason why all Landlords should do the same.

Indeed, it sounds too good to be true ... it is. Contact me at troybrost@gmail.com, 541-554-1499, or visit www.infrasystems.us to find out for yourself. I will provide you with the contact and information you need and assist you along the way.

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.

On July 26, 1990, President Bush signed into law the Americans with Disabilities Act ("ADA"), The Americans with Disabilities Act Accessibility Guidelines (the “1991 Regulations") were shortly thereafter developed to guide new construction and alterations undertaken by covered entities and established the minimum requirements for "accessibility" for disabled persons in buildings and facilities and in transportation vehicles. After more than twenty years, the Department of Justice implemented new regulations, which became mandatory in 2012 (the “2012 Regulations.”) Your state may have passed parallel laws, which could increase the protection of individuals with disabilities, e.g., the Unruh Act in California. However, this article focuses on Federal ADA compliance. Keep in mind that the ADA is a civil rights law, which addresses a number of subjects, but this article focuses on ac- cessibility (no longer called “handicap”) issues only.

A mobile home park owner might ask, "How about my pre-exist- ing park, does it need to comply with ADA issues?" Answer: "It de- pends." If your mobile home park pre-dates the ADA statute, and the Park has not gone through any significant renovations (deter- mined on a case-by-case basis), then the park may be "grandfathered in" in most cases. However, there can still be considerations of "reasonable accommodation" and "readily achievable barrier removal" under the ADA that could require a park owner to make modifications to existing structures and to make existing buildings "accessible" to the disabled. There may be no "grandfathering in" under these provisions of the ADA. In addition, if the park has undergone sub- stantial alterations/renovations, this could also trigger ADA com- pliance. A mobile home park owner might also ask “If my park needs to comply with ADA issues, then does the park have to comply with the 1991 Regulations or the 2012 Regulations?” Once again, the answer is “it depends.” There is a broad “grandfather” clause that exempts all building elements constructed in compliance with the 1991 Regulations until those elements are subject to a planned alteration.

So--is a mobile home park a "place of public accommodation" or not? The ADA defines a "public accommodation" to be "a private entity that owns, leases (or leases to), or operates a place of public accommodation." Examples of places of "public accommodation" include places of lodging; establishments serving food or drink; places of exhibition or entertainment; places of public gathering; sales or rental establishments; service establishments; stations used for public transportation; places of public display or collection; places of public recreation; places of public education; social service center establishments; and places of exercise or recreation. Does a mobile home park fit within these descriptions? Based on discussions with ADA experts,the typical mobile home park does not appear to "fit" under any of the enumerated examples of a "public accommodation," assuming the park's facilities are only open for the sole use and enjoyment of the park's residents, rather than the "general public." In some cases, however, a park's clubhouse and office could be determined to be "public accommodations" as they are generally "opened to the pub- lic." In addition, the park's office is necessarily "opened to the pub- lic" as persons, not otherwise residents of the park, are allowed in and, in fact, are invited in to inquire about available spaces and/or mobile homes in the park. One issue which has been “rearing its ugly head” recently in connection with what are referred to as “drive-by” ADA lawsuits is the inadvertent conversion of a “non-public” ac- commodation to a “public” accommodation. For example, if the park clubhouse is not open to the general public, but the park allows the clubhouse to be used as a polling station for elections, or for classes for the local college, or for swimming lessons in the pool, the park may have inadvertently converted the area to a “public” accommodation and will be required to comply with the ADA for the impacted area, e.g., pool or clubhouse. Even the “innocent” re- quest by one person to use the “private” restroom at the management office could trigger thousands of dollars in improvements to make the restroom “accessible”.

If the park has "public accommodations" which have "barriers" to "access," then the next consideration is whether the "removal of the barrier" is "readily achievable." Remember that these barriers apply to all sorts of disabilities, including sight and hearing, and not just accessibility for wheel chairs. The ADA generally defines "readily achievable" as easily accomplished and able to be carried out with- out much difficulty or expense. 42 U.S.C.S. § 12181(9). Federal courts have developed several factors in determining what is "readily achievable": (1) nature and cost of the removal; (2) overall financial resources of the facility or facilities involved; (3) number of persons employed at such facility; (4) effect on expenses and re- sources; (5) impact of such action upon the operation of the facility; (6) overall financial resources of the covered entity; (7) overall size of the business of a covered entity with respect to the number of its employees; (8) the number, type, and location of its facilities; (9) type of operation or operations of the covered entity, including com- position, structure, and functions of the workforce of such entity; and (10) geographic separateness, administrative or fiscal relation- ship of the facility or facilities in question to the covered entity. Col- orado Cross Disability Coalition v. Hermanson Family Ltd. Pshp. The park however will bear the ultimate burden to prove that the barrier removal is not readily achievable. This will be determined on a case- by-case basis for each individual park. The 1991 Regulations pro- vide examples of steps that may be “readily achievable” according to the Department of Justice.

So, how do you lessen the chance of your park becoming a "tar- get" of an ADA lawsuit? There are no "bright lines" as to whether a park has ADA issues or not. Since an "ounce of prevention is worth a pound of cure," the prudent park owner might be best served by hiring a knowledgeable ADA Consultant to review and comment on whether the park has any ADA issues and how they should or could be addressed. California has implemented a Certified Access Specialist (“CASp”) training and licensing program, which provides incentives (i.e., some protections from lawsuits) for property owners who conduct a CASP inspection. Another, and more conservative approach would be to simply make sure that all of the park facilities are "ADA compliant," even if, technically and legally, you may not be required to do so. Little things can make a big difference in your park. Examples of ADA compliance include: levers on the entrance doors; levers on bathroom doors and fixtures; bathroom fixtures at proper height; proper bathroom accessories; doorways that accept wheelchair access; bathrooms that accept wheelchair access; counters at correct height for wheelchairs users; alternatives (ramps/elevators) to steps into the clubhouse and office; acceptable transitions (no lips) at doorways (interior and exterior); accessible parking and van access spaces; acceptable transitions (commonly referred to as "curb cuts") to sidewalks at street junctions and accessible parking; and acceptable inclines from parking areas to the park’s “public accommodations,” to name a few.

Your ADA consultant can walk your park and let you know what facilities do and do not comply with ADA. Making the necessary improvements will be money well spent, and potentially "ward off' ex- pensive litigation, which litigation, in all probability, will not be covered by your general liability insurance policy. You might also want to turn this into a "PR plus" for your park - i.e., tell your res- idents about the improvements after they are done! However, such actions may not be right for every park. The park owner should first discuss ADA considerations with its legal counsel to determine what the right course of action is under the particular circumstances.

In addition, insurance is playing an ever more important role in protection against ADA claims. More and more often, ADA plain- tiff lawyers are adding causes of action for negligence and alleging bodily injury to trigger the potential for coverage under the park owners CGL policies. Our recommendation is to tender any ADA claims to your carrier immediately. In addition, some insurers now offer what is known as “tenant discrimination” insurance, which may pro- tect the park owner in the event of an ADA claim since the ADA claim is a civil rights claim. We suggest all park owners speak with their industry insurance broker about possible insurance protection.

John Pentecost is a partner with Hart, King & Coldren, a law firm located in Santa Ana, California. His practice focuses on representation of mobilehome parks and recreational vehicle parks, as well as park owners, throughout the State of California. He can be reached at jpentecost@hk-claw.com

Reprinted with permission from “The Journal”, August 2013

Answer: Oregon landlord tenant law allows service of notices three ways: first class mail, personal delivery and "nail and mail." ORS 90.155.

We always advise our clients to deliver notices by first class mail. Not certified, not UPS, not FedEx, but good old fashioned first class mail with a stamp. They still make those. You can always get a certificate of mailing showing that you sent the notice on the day you say you did.

First class mail is not always an option; therefore, you can serve personally. When we say "personal delivery" it does not mean taping the notice to the door, or placing it under a windshield wiper (I've seen both cases), it means physically handing it to the person you are trying to give the notice to. Make a note of the time you sent it and if you can, bring a witness.

History

The Civil Rights Act of 1968 enacted The Fair Housing Act ("FHA") to prohibit housing discrimination based on race, color, religion, sex, or national origin. The FHA was amended in 1988 to expand its coverage to prohibit discrimination based on disability or family status, meaning the presence of a child under the age of 18 and pregnant women. Because the creation of families as a protected class clashed with the operation of retirement or adult communities, the 1988 amendments included exemptions for housing developments that qualified as housing for persons over the age of 55. Because there was an inherent conflict between protected family status and the exemption for older persons, Congress responded with The Housing For Older Persons Act of 1995 ("HOPA") which fine tuned the exemptions and is now the definitive authority for owners of such housing. (You should also be aware that municipalities can have ordinances prohibiting discrimination for categories broader than the Civil Rights Act. Examples of common ordinances gaining popularity are discrimination in housing on the basis of HIV/AIDS status, sexual orientation. Such ordinances are not addressed in this article.)

Occupancy Requirement to Qualify for Exemption

HOPA maintained the requirement that at least 80% of exempt housing must have one occupant who is 55 years of age or older. It also still required that the exempt hosing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older. Significant in terms of capital costs, HOPA eliminated the requirement that 55 and older hosing had to maintain "significant facilities and services" designed for the elderly. (Communities that are occupied solely by persons who are 62 and older are also exempt from the prohibition against family discrimination under Section 100.303.)

"Wiggle Room" Factor

At first blush, the 80% requirement appears to give a property owner some "wiggle room" to comply with the exemption. HOPA specifically allows a 55 and older community to be "exempt" from the preference for families if, after September 13, 1988, 80% of the units are occupied by at least one person age 55 years or older. Units occupied by employees of the housing facility or community who are under the age 55 do not count against the 80% as long as the employees perform substantial duties related to the management or maintenance of the community. Likewise, units occupied by persons who are disabled and require a reasonable accommodation, also do not count against the 80%.

However, the 80% requirement can also be a property owners' pitfall if it is achieved improperly. The 80% requirement does not mean that the property owner can manipulate the remaining 20% of units occupied by persons under the age of 55. The 80% occupancy requirement is coupled with an additional requirement that the facility or community adheres to policies and procedures that demonstrate the intent to be a 55 or older facility. A manager cannot merely choose to rent to "good" non-seniors or families just because the facility is over 80% senior.

One provision of HOPA which, on the surface, appears troublesome is Section 100.305(h) which provides that each housing facility may determine the age restriction for units that are not occupied by at least one person 55 years of age or older. On its face, this provision appears to allow a community to set any age requirement it wishes for the twenty percent (20%) of spaces which are not required to be occupied by a person 55 years of age or older, including requiring the occupants of the remaining twenty percent (20%) of spaces to be adults. However, this would appear to be contrary to the general intent of the FHA to prohibit discrimination on the basis of "family status". A more likely interpretation is that the housing provider need not apply any age restriction on occupancy of the remaining twenty percent (20%) of rental units. This interpretation seems likely, not only in view of the general intent of the FHA, but in view of Section 100.306(d) which provides that a housing facility or community may allow occupancy by families with children as long as it meets the intent requirements of Sections 100.305 and 100.306(a).

An argument could well be made that a community must allow up to twenty percent (20%) of the spaces to be occupied by persons who do not otherwise satisfy the community's minimum age requirements. The problem is that a park which "uses up" its twenty percent (20%) allotment may find itself below the 80% requirement if a space which was previously occupied by a person 55 years of age or older ceases to be so occupied. This could occur as a result of an older tenant dying or moving out of the community.

It has been our experience that HUD has, from time to time, interpreted the "twenty percent" allowance as a "fudge factor" in order to avoid hardship where, for example, an older tenant dies, leaving a widow who does not satisfy the community's minimum age requirements. This interpretation was bolstered by the requirement that the housing be intended for persons 55 years of age or older and that the properties have rules that limit residency to persons meeting the age requirements. Deliberately allowing persons under the age of 55 to move into the community seems contrary to this intention.

**Tip: In many states the law requires that mobile home parks owners uniformly enforce all published rules. To allow some households to avoid the requirement could run afoul of such laws leaving the door open for a disgruntled tenant to sue on a claim that the management is not uniformly enforcing its own rules.

Published Procedures & Policies of Intent

In addition to requiring that at least 80% of the occupied units be occupied by at least one person who is 55 years of age or older, HOPA requires that the housing be "intended and operated" for person 55 years of age or older, and that the housing facility "publish and adhere to policies and procedures that demonstrate its intent" to qualify for the 55 or older exemption. Section 100.306(a) sets forth a non-exclusive list or relevant factors in determining whether the park "demonstrates" this "intent":

(1) The manner in which the housing facility is described to prospective residents;
(2) And advertising designed to attract prospective residents;
(3) Lease provisions;
(4) Written rules and regulations;
(5) The maintenance and consistent application or relevant procedures;
(6) Actual practices; and
(7) Public posting in common areas of statements describing the facility as housing for persons 55 years of age or older;

These requirements bolster the "common sense" approach to a community demonstrating its intent to be housing for older persons. Specifically, without limitation, the parks' residency documents need to clearly state the age restrictions on residency, and the age restrictions need to be consistently enforced.

Unscrupulous attempts by property owners to manipulate the intent to remain senior housing have resulted in adverse judgments. In a 2003 federal case in California, Housing Rights Center et al. v. Galaxy Apartments, et al., the apartment complex and management company was sued for allegedly telling an expectant mother that it would not accept families with children because it was a "seniors only" complex. The Housing Rights Center sent "testers" to the building and learned that childless adult testers of all ages were accepted and only testers with children or who were expecting children were told that the complex was seniors only. Obviously, the apartment owner was not complying with the "intent" of the over 55 exemption and was ordered to pay the plaintiffs $51,000 and enter into a two year fair housing training program.

Some states require that housing intended and operated for occupancy by persons 55 years of age or older register with state agencies. You should consult your legal counsel for the applicable registration and renewal process in your state.

Age Verification

HOPA provides specific guidelines for "age verification". To protect your property, these procedures should be followed to the point that, at any given time in the past, you should be able to demonstrate, the percentage of units that were occupied by at least one person age 55 or older.

Section 100.307(d) provides that the following documents are considered "reliable" documentation of the age of the occupants:

(1) Driver's license;
(2) Birth Certificate;
(3) Passport;
(4) Immigration card;
(5) Military identification;
(6) Any other state, local, national, or international official documents containing a birth date of comparable reliability, or
(7) A certification in a lease, application, affidavit, or other document signed by an adult member of the household asserting that at least one person in the unit is 55 years of age or older.

This last provision is useful in those cases where tenants who are believed to be over 55 years of age fail or refuse to provide proof of age to the park by allowing any other adult member of the household to sign a statement to the effect that the person in question is, in fact, at least 55 years of age.

**Tip: Make it a policy to obtain a written application for tenancy from every household and keep those applications for the length of the tenancy.

Section 100.307(g) further provides that: "If the occupants of a particular dwelling unit fail to comply with the age verification procedures, the housing facility or community may, if it has sufficient evidence, consider the unit to be occupied by at least one person 55 years of age or older." This section goes on to provide that such evidence may include government records or documents, such as a census; prior forms or applications; or a statement from an individual who has personal knowledge of the age of the occupants. In the latter case, the individual's statement must set forth the basis for such knowledge. Compliance with this provision most probably would be met by a park employee statement as to their opinion of the age of a tenant, based upon the tenant's appearance and, if applicable, the apparent age of the tenant's adult children.

A typical pitfall for owners of such properties is the HOPA requirement that the age verification information must be updated at least every two years, pursuant to Section 100.307(c).

**Tip: In addition to keeping the tenant's application, the management should consider developing a form which it distributes to all spaces at least once every two years, asking residents to confirm the names and ages of all persons who are currently residing in the home. This is probably good policy in any case, since a record of what adults are actually occupying a home is useful in other situations (e.g., naming all adults occupants in an unlawful detainer complaint.)

MHCO has a number of forms specifically designed for use in a "55 and Older Community". Form are available for MHCO members at MHCO.ORG

Reprinted from MHCO "Community Update" March/April 2005

Answer: No, the park should definitely not use a regular manufactured home rental agreement for RVs. By doing so, the park might inadvertently give the RV tenants more rights than they are otherwise entitled to under Oregon's Landlord-Tenant Laws.

Specifically, the MHCO manufactured home rental agreement (and most other, similar manufactured home rental agreements) typically define the rented space as being used for a "manufactured home." This could used against the park in an eviction action. The RV tenant's attorney could very well argue that the RV is a "manufactured home," and therefore not subject to a 30-day, no-cause eviction, as RV tenants typically may be evicted.

Tenant attorneys might also try to argue that the termination provisions in a manufactured home rental agreement similarly do not allow no-cause evictions. All in all, using a regular rental agreement is not a good idea.

Instead, use MHCO Form 80 (Recreational Vehicle Space Rental Agreement). It includes all of the usual landlord protections, plus these specific requirements under Oregon law: (a) That the tenancy may be terminated by the landlord without cause upon 30 or 60 days' written notice for a month-to-month tenancy or upon 10 days' written notice for a week-to-week tenancy; (b) that any accessory building or structure paid for or provided by the tenant belongs to the tenant and is subject to a demand by the landlord that the tenant remove the building or structure upon termination of the tenancy; and, (c) that a state agency or local government may not prohibit the placement or occupancy of an RV, or impose any limit on the length of occupancy, if the RV is located in a manufactured dwelling park, mobile home park or recreational vehicle park, occupied as a residential dwelling and lawfully connected to water and electrical supply systems and a sewage disposal system.

Mark L. Busch, P.C.
Attorney at Law
Cornell West, Suite 200
1500 NW Bethany Blvd.
Beaverton, Oregon 97006

Ph: 503-597-1309
Fax: 503-430-7593
Web: www.marklbusch.com
Email: mark@marklbusch.com

Answer:    As for the first question regarding tenants “paying back the community for the meter and cost of installation, I believe you are referring to subsection (4) of ORS 90.537 [Conversion of billing method for utility or service charges.] It is summarized below:

The landlord that installs submeters pursuant to this statute may recover from a tenant the cost of installing the submeters, including the costs to improve or repair the existing utility or service system infrastructure necessitated by the installation of the submeters.  There are two alternatives:

1. By raising the rent, as with any capital expense in the community, except that the landlord may not raise the rent for that purpose within the first six months after installation of the submeters; or

1. In a manufactured dwelling park, the landlord may impose a special assessment;

1. It must pursuant to a written special assessment plan and may be adopted unilaterally by the landlord;
2. The plan may include only the landlord’s actual costs to be recovered on a pro rata basis from each tenant;
3. Payments may be made due no more frequently than monthly over a period of at least 60 months.
4. Payments must be assessed as part of the utility or service charge [i.e. separate from the “rent.”];
5. The landlord must give each tenant a copy of the plan at least 90 days before the first payment is due.;
6. Payments may not be due before the completion of the installation, but must begin within six months after completion.
7. A new tenant of a space subject to the plan may be required to make payments under the plan [i.e. even though the system was installed before they arrived];
8. Payments must end when the plan ends.
9. The landlord is not required to provide an accounting of plan payments made during or after the end of the plan.

You want to make sure you follow one of the two alternatives, as they are the only two methods by which you may recover back the capital costs of the system and its installation.  As for “ownership” of the system, it belongs to you as the owner of the park.  It is treated no differently than if you simply recovered the cost of any amenity via periodic rent increases.  The fact that the tenants pay a pro rata portion of the cost in their base rent does not give them any ownership rights in the amenities paid for. As for maintenance, since you own the system, maintenance is your responsibility.  Of course, you may recover that cost through periodic rent increases.

As to your second question, it appears your answer is found at Section 2.f, above which is highlighted above.  Since tenant payments did not commence within the first six months after installation, I believe it would be risky for you to do so now. You will not Section 2. g, which refers to new tenants who came in after the installation.  Clearly Section 2.f was not meant to apply to them.  Arguably, then, you might be able to recover the cost from them going forward.  However, I can see a contrary argument, that since the cost recovery was never made part of a “special assessment plan,” you’re too late for that too.  Your best bet might be to simply include any cost recovery from existing and future tenants through periodic rent increases, since there does not appear to be any time limit on your doing so.  However, you should consult your own attorney on this approach before doing so.

When they left their children's play furniture and other items out on the patio, the apartment manager issued a few warnings and then another $20 fine.

The family's actions violated apartment policies, according to a complaint filed last September in Multnomah County Circuit Court. But under an agreement with the state announced Friday, the apartment complex and its property management firm will pay nearly $65,000 to tenants, the state and a legal aid organization. They will have to ditch policies that tenants criticized as discriminating against families.

And they will have to install a playground structure.

"It's a really good (result) for families in Oregon," said Christina Dirks, who represented the Sazykins, one of several families who made claims against the apartment complex and property management firm Norris & Stevens. "It's helping to assure that families in our community have equal access to enjoy their rental housing."

Under the agreement, Wah Mai Terrace and Norris & Stevens, do not admit any wrongdoing.

Norris & Stevens representatives did not return a call for comment.

Jonathan Radmacher, an attorney for the Wah Mai Terrace owners, said the policies were never meant to be anti-children.

He noted that the apartment complex owners and property managers were quick to address the problems as soon as they were brought up.

The policy that barred tenants from storing items other than bikes and barbecue grills on their patios was to keep the look of the complex presentable and clean, Radmacher said. The policy that prohibited children from riding bikes, tricycles, Big Wheel-type toys, skateboards and rollerskates on the property was out of concern for older residents, he said.

"There are lots of places to play in the neighborhood," he said, noting Ventura Park and Floyd Light Middle School, both about a block or two away from the complex at SE 111th and SE Stark.

He criticized the state, saying that the apartment complex and property managers were not aware of the discrimination concerns until the state intervened and threatened them with tens of thousands of dollars in state legal fees. "I know my client would never want to have any policy that's discriminatory... They would always want that brought to their attention, and they would fix it," he said. About $35,000 of the settlement will go to six current and former tenants. Norris & Stevens and Wah Mai Terrace also must pay attorney fees and costs of $20,000 to the Oregon Department of Justice and $9,816.36 to Legal Aid Services of Oregon.

Representatives for the two entities must participate in training on fair housing practices.

They also cannot try to collect fines and other debts that were levied against tenants under the "potentially unlawful" policies.

Norris & Stevens, which manages 8,300 units throughout the Portland area, will adopt the revised policies at all properties in its portfolio, and not just to the Wah Mai Terrace Complex, the state said.

The change helps families - particularly low-income families - who don't have the means to just pick up and move elsewhere, said Dirks, a staff attorney with Legal Aid Services of Oregon. The rental market, as well, offers few options.

The Portland market is tied with Minneapolis for having the second-lowest vacancy rate in the nation, according to a survey of the National Association of Realtors.

Why Submeter?

One of the largest expenses for a mobile home park is utilities. It is also an expense item that continues to increase over time. There are three major reasons for this:

- Rate Increases - The cost of energy (gas and electric) production and acquiring clean water has outpaced inflation for the past decade.

- Increases in Occupancy - Due to the economic environment more people are living with extended families. Higher occupancy leads to higher utility usage.

- Wasteful Usage - Residents are often less conservative with their utility usage when they are not aware of their individual consumption or do not have an incentive to save.

Studies have shown that once residents become aware of their utility usage, the total consumption will go down, on average around 22%. According to a 2007 Santa Clara Water District study, Water Submetering in Mobile Home Parks, "Tenants who are individually metered can benefit by being able to monitor and control their water use - with submetering, they only pay for what they use, not what others use . . . the four mobile home parks examined shows an annual water savings of from 15 to 30%."

Submetering makes economic sense for both the association and the residents. The water, gas and/or electric can be billed back to the residents thus reducing the overall association's expenses. Without submetering, associations and property owners may be forced to pass the increased expenses evenly to all residents. This would unfairly increase costs for residents who are already conscious of their utility usage. The residents will benefit because they are now in control of their utility expenses.

Submeters and Automatic Meter Reading Systems (AMR)

There are many types of submeters that will accommodate any mobile home. In areas where water pipes can freeze, you need to take measures to prevent the meters from freezing. For these applications there are meters with freeze plates or heat tape with insulation jackets. There are also a variety of gas and electric meters suitable for any environment. Submeters were once read by a "meter reader" who came to the property once a month to read the meters either manually or with a variety of handheld devices. This outdated way of reading meters only provided the meter readings once a month, so if there were a leak on the property or a running toilet, hundreds of gallons of water would have already been wasted before the resident received their next bill. The current way of reading submeters is through an Automatic Meter Reading System or (AMR). AMR's have a small transmitter connected to each meter that sends the meter reads wirelessly to a data collector located on the property. The meter readings can then be downloaded daily and used to notify a property manager or resident if there is a sudden or steady increase in water usage. The devices can pinpoint the exact meter and time the increased usage started so the leak can be resolved within days, not months. Many submetering and billing companies can provide a web-based system with daily meter reads with their services.

How does it Work?

It is best to select a reputable submetering and billing company in the beginning to ensure you are getting the appropriate meters and AMR system for your property. These companies will typically handle all of the details, from the design and installation to the resident billing so you can start saving immediately. Following are some typical steps for a new installation:

1. A complete property analysis is completed to determine the best submetering products for the desired application.

2. Notices are issued to inform residents of the new submetering system.

3. Equipment is ordered and depending on state and local regulations may be sent to a government office for inspection and testing. The meters would then be installed along with the AMR system.

4. Resident information along with their meters is uploaded to a billing system and ready for processing.

5. Meter information is read via (AMR) wireless transmitters and receivers and transmitted back to a billing company. Individual meter readings are then imported into a billing system and individual utility bills are created.

6. Utility bills are sent directly to residents via U.S. Mail and/or electronically to e-mail addresses.

7. The billing company will typically collects payments via multiple payment methods including check, money order, eCheck or major credit card. Online and phone payments are often accepted as well.

8. A monthly utility reimbursement check is then sent to the owner, manager or association.

Multifamily Utility Company offers both code-compliant submetering systems and customized Ratio Utility Billing Systems (RUBS) for mobile home parks. Multifamily Utility Company handles everything from the system design and installation to monthly meter reading and billing. With more than 20 years of experience, Multifamily Utility is committed to being an industry leader in submetering and billing.

For more questions please contact Multifamily Utility Company at: 800.266.0968 or view their website at www.mobilehomeutility.com or www.multifamilyutility.com

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.