Takeaways from our Facebook Live conversation regarding Mobile Home Management & Ownership Structures and Applicable Laws with Sue Loftin of The Loftin Firm, P.C.
3 Types of Mobile Home Ownership Structure:
- Rental Mobile Home Parks/Investor-Owned
- Investors own mobile home park and they rent the space to individuals who own the mobile home
- Third-Party Non-Profit
- Misunderstanding: Non-profit buys the park and communicated that it will benefit everyone, but this is not always the case
- They can and do raise the rent
- The non-profit may say that mobile home renters can rent-to-own but again, this is not always true
- The Takeaway: Work with an experienced management company, make sure the non-profit is transparent about their plan for the park. This model can be very beneficial to low-income mobile home parks if the structure is executed properly with an expert mobile home management company.
- Common interest subdivision
- Standard Co-Op: membership, no stock ownership
- Limited Housing Equity Co-op: residents set up 501c3 and can take tax-deductible donations and grants
- Corporate Ownership: residents form a corporation and buy the park
There are a variety of laws that mobile home property managers and mobile home residents/owners should be aware of, especially when changing ownership structures.
- Applies to: Common interest subdivision, Standard co-op, Limited housing equity
Non-profit mutual benefit corporate law
- This is the law under which mobile home communities form HOAs. This is important because it augments the Davis-Stirling Act with what you can/can’t do with your park.
- Always applies- no matter what the ownership structure is.
Highlighted questions from FB Live:
“How should a mobile home community prepare for financing or refinancing?”
- Collect a history of defaults on loans by residents
- Organize relevant documents
- Hire an experienced mobile home management company before applying for a loan
*Corporate owned parks are more challenging to refinance
“How do you decide which ownership is best for your park?”
- Hire someone to do a feasibility study
- Consider Location
- Survey residents
- Consider the age of homes
Main takeaway: hire an experience mobile home management company that is updated on new and amended legislation, and can help your community make the best, informed decisions regarding your HOA and management.