Buying your park

Resident Ownership of Manufactured Home Parks

Dear Homeowner:

GSMOL is a nonprofit advocacy organization, dedicated to protecting the rights and quality of life of manufactured home owners. GSMOL educates homeowners on their rights, helps to solve problems for MH communities throughout California, and supports legislative efforts for the benefit of MH owners.

Regarding the resident ownership of manufactured home parks, GSMOL believes:

(1) Resident ownership of MH parks is a very positive goal, for many reasons. Properly done, converting the park where you live to resident ownership:

  • Stabilizes your monthly housing expenses over the long term;
  • Secures the value of your homes;
  • Avoids the consequences if local rent control is ever lost or compromised;
  • Makes your homes easier to sell;
  • Builds your park into a real community and improves its quality of life;
  • Protects your park from ever being closed or changed to another use.

(2) The best approach is to incorporate your HOA as a nonprofit mutual benefit corporation. This corporation will own the park’s real estate when the purchase is complete. Homeowners are issued membership shares by the corporation. A board of directors (elected by the homeowners) decides park policies. The corporation hires a professional property management company to manage park operations day-to-day.

(3) The best way to start toward resident ownership is to send a letter to your park owner. The letter asks the owner to consider your resident group as a potential buyer. The letter also preserves your group’s right to notice, if the park is to be sold (Civil Code §798.80).

Every MHP resident group situation is different. What you say in the letter should maximize your chances of getting the park owner engaged. Contact me directly by e-mail or with a call to 831-688-1293. We can discuss your group’s situation, and determine the best content for your letter to the park owner.

I look forward to hearing from you.

Please see the Frequently Asked Questions, below. As always, if you have any questions regarding resident-owned MH communities, feel free to contact me directly. You can send me an email here, or, give me a call on (831) 688-1293.

Sincerely,

David Loop

David Loop
GSMOL VP – Resident-Owned MH Communities


FAQs: Converting Your Park to Resident Ownership

Q: Why should our resident group try to buy the MH park where we live?

A: There are many reasons:
  • To stabilize your monthly housing expenses over the long term.
  • To secure the value of your homes.
  • To avoid the consequences if local rent control is ever lost or compromised.
  • To make your homes more valuable and easier to sell.
  • To build your park into a community and improve its quality of life.
  • To make certain that your park will never be closed or changed to another use.

Q: How would we buy the park where we live, if given the opportunity?

A: Here are the steps you can follow to convert your park to resident ownership:

Communicate in writing with your park owner. Let him know your resident group is interested in buying the park, and capable of doing it.

If you receive a positive response from the owner, choose a qualified park purchase consultant for your group. He or she will analyze and structure the deal, arrange mortgage financing for your group, and represent your interests in negotiations with the park owner.

Incorporate your HOA as a California Nonprofit, Mutual Benefit Corporation (“NPMB”). When the purchase is complete, your NPMB will own the park.

Issue HOA memberships, and (after informing all residents on the details of the purchase) sell these memberships to the participating residents.

Perform property due diligence to determine the condition of the park infrastructure (Electric, water, gas, sewer, road systems, etc.).

Complete the transaction. Elect the HOA Board of Directors. Hire a property management company to handle day-to-day operations. Begin operating your park as a resident-owned community.

Q: How would we get started?

A: Your park owner probably thinks you don’t have the ability to buy the park. Your group is probably not on the owner’s “radar” as potential buyers. However, the resident group is often the most capable buyer in today’s market. Start by getting the park owner’s attention and interest in a positive way:

At least once a year (preferably every six months) send a letter to the park owner. The letter should say that the resident group would like to be considered as a potential buyer of the park. The letter should also include statements that:

  1. The resident group will pay a fair price for the park;
  2. The resident group believes it can get financing to buy the park; and,
  3. Selling to the resident group can give the owner tax benefits available from no other buyer.

All of these things are true.

The second page of your letter secures your right to notice if the park is to be sold. Your resident group has this right under MRL Section 798.80. However, you need to request this notice each year from the owner, in writing.

Because each resident group’s situation is different, you should contact me to determine the wording that will make your letter most effective. I can be reached by e-mail, or with a phone call to 831-688-1293.

Q: Will the owner respond to your letter?

A: There is no guarantee that the park owner will respond. In some cases, years may pass before the owner decides to sell. But most parks in California are sold, sooner or later. Your job is to send this letter to the owner (preferably every six months), and to generally communicate with him about your interest. When time comes for the owner to sell, you want him to know your resident group is an interested and capable buyer.

Q: How do we make sure the letter gets to the actual owner?

A: The letter needs to be sent to the park owner, not the resident manager. When you contact me, we can discuss ways to make sure your letter gets to the owner of the MH park where you live.

Q: What if we have further questions or get a positive response from our park owner?

A: Contact GSMOL’s VP of Resident Owned MH Communities: David Loop on 831-688-1293 or send him an email here. He will answer your questions and help with next steps.

Resident Park Purchases Arranged by Dave Loop and Park Purchase Consultant Deane Sargent

 

Alimur Park in Soquel

Palm Terrace in Aptos (Refinance)