Phil Querin Q&A: Storage Agreement About to Expire Home Unlikely to Sell

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Phil Querin

Question: A community owner entered into a Storage Agreement on a home in early January 2011. The agreement provides that the home must be removed by November 30th if it does not sell. We are now approaching the end of November, and the community owner does not believe the home will be sold by the end of this month. What's next? Does the community owner take the homeowner to court? Doesn't the landlord have to give one year to the home owner?

Answer: There are certain facts that are missing from this question. I will supply them and then answer. So, let’s assume the following: (a) This is a periodic (i.e. month-to-month) tenancy; (b) The tenant has moved out of the home and it is now vacant; (c) The rents are not being paid; and lastly, let’s assume that (d) The landlord was to be paid all past-due rent from the sale proceeds. However, before answering the question, however, let me point out a fatal error by this landlord – and many other landlords: They don’t look at the Worst Case Scenario. I’m sure the Storage Agreement adequately covered what was to occur upon sale. But since we have a landlord now asking what happens if the sale does not occur by November 30, I’m led to believe the parties neglected to address (in writing) the possibility of failure. Memo to MHCO landlords: Written agreements with tenants should always address “the exit strategy” – i.e. what protocol kicks in if the home is not sold and not removed by November 30. Without addressing this issue in the written Storage Agreement, we are left to figure out what Oregon law would provide under these facts. Here’s my take: • On December 1, the landlord should contact the ex-tenant and demand that the home be removed. This should be done in writing or e-mail, so it can be used later if necessary. • If removal does not occur promptly, the landlord must rely upon Oregon law. Unfortunately, the law leaves landlords holding the bag if a home is abandoned. • The landlord will have to determine if the tenant will voluntarily waive his abandonment rights, and if not, then he must follow the legal procedure under ORS 90.675. If there is a lienholder on the home, the landlord will have to give them notification under the abandonment law. • If the landlord wants to leave the home on the site and resell it to a new tenant, that option is always available , and probably should be pursued first, rather than going down the abandonment route, which can be costly in time and money. Care should be exercised to properly document such an arrangement, in order to avoid later complaints by the tenant that they were taken advantage of. In Oregon, following the formal abandonment process is the only legal way for a landlord to take control of a manufactured home if the tenant fails or refuses to remove it upon termination of the tenancy.

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