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Yesterday, the Senate Banking Committee released a bipartisan agreement to clarify that a manufactured housing retailer or seller is not considered a "loan originator" simply because they provide a customer with some assistance in the mortgage loan process.  This is a key tenet of the Preserving Access to Manufactured Housing Act, which excludes manufactured housing retailers and sellers from the definition of a loan originator so long as they are only receiving compensation for the sale of a home. 

MHI successfully argued that just as a real estate agent's sales commission does not make him or her a loan originator under current law, a similar distinction is needed for those selling manufactured homes.  While they are only in the business of selling homes and do not originate loans, manufactured home retailers and sellers currently run the risk of being considered mortgage loan originators. This is problematic because loan originators must comply with licensing or qualification requirements that are completely unrelated and irrelevant to manufactured home retailers and sellers.  This agreement affirms MHI's longstanding position that it is inappropriate for a manufactured housing retailer - whose business is to sell homes and who is not receiving any gain or compensation for minimally helping the borrower with the mortgage loan process - to be subjected to costly and labor-intensive activities that are clearly designed to apply to the actual individual making the mortgage loan.

The manufactured housing language was a part of a bipartisan regulatory reform package drafted by Senate Banking Committee Chairman Mike Crapo (R-ID). A bipartisan group of nine Republicans and nine Democrats cosponsored the measure, including: Mike Crapo (R-Idaho), Bob Corker (R-Tennessee), Tim Scott (R-South Carolina), Tom Cotton (R-Arkansas), Mike Rounds (R-South Dakota), David Perdue (R-Georgia), Thom Tillis (R-North Carolina), John Kennedy (R-Louisiana), Jerry Moran (R-Kansas), Joe Donnelly (D-Indiana), Heidi Heitkamp (D-North Dakota), Jon Tester (D-Montana), Mark Warner (D-Virginia), Tim Kaine (D-Virginia), Angus King (I-Maine), Joe Manchin (D-West Virginia), Claire McCaskill (D-Missouri), and Gary Peters (D-Michigan). 

The provision is in Section 107 of the package, which is within the title of the bill dealing with improving consumer access to mortgage credit.  Specifically, Section 107 amends the Truth in Lending Act (TILA) to exclude from the definition of "mortgage originator" an employee of a retailer of manufactured or modular homes who does not receive compensation or gain for taking residential mortgage loan applications while maintaining consumer protections. Senator Joe Donnelly (D-IN), author of the Preserving Access to Manufactured Housing Act (S. 1751) and long-time supporter of manufactured housing, strongly advocated for inclusion of this important consumer access provision in the package. 

The Senate's bipartisan reform package is expected to be considered by the Senate Banking Committee in the coming weeks. MHI will continue working with its champions as the package moves through the legislative process. 

The inclusion of this language in the Senate's financial regulatory relief package is the result of MHI's persistent efforts to ensure the needed changes contained in the Preserving Access to Manufactured Housing Act are passed into law as soon as possible. In addition to the Senate regulatory reform package, the full Preserving Access to Manufactured House Act was passed as a part of the House's financial reform package (H.R. 10) in June.   In September, the House also passed the bill's provisions as a part of its Fiscal Year 2018 Appropriations package. 

Answer: So long as the park reasonably believes under all the circumstances that the tenant has left behind the RV with no intention of asserting any further claim to it, the park does not need to file an eviction action. Instead, the park can treat the RV as abandoned property and issue an abandoned property notice.

The abandonment process for RVs is similar to that for abandoned mobile homes. Under ORS 90.425, the park must issue an abandonment notice for the RV. The notice must state that: (a) The RV and any other property left behind is considered abandoned; (b) The tenant or any lienholder or owner must contact the landlord within 45 days to arrange for the removal of the RV; (c) The RV is stored at a place of safekeeping; (d) The tenant or any lienholder or owner may arrange for removal of the RV by contacting the landlord at a described telephone number or address on or before the specified date; (e) The landlord will make the RV available for removal by appointment at reasonable times; (f) The landlord may require payment of removal and storage charges; (g) If the tenant or any lienholder or owner fails to contact the landlord by the specified date, or after that contact, fails to remove the RV within 30 days, the landlord may sell or dispose of the RV; and, (h) If there is a lienholder or other owner of the RV, they have a right to claim it.

The park must send the notice to the tenant's park address and any other known address for the tenant. The park must also conduct a title search on the RV and send the notice to any listed lienholder or other owners. The notice must be sent by regular first class mail, except that lienholders must also be sent the notice by certified mail.

The good news is that after the park issues the abandonment notice, the RV itself can be removed from the rented space to open it up for a new RV tenant. The abandoned RV simply has to be stored in a "place of safekeeping," such as an on-site storage lot.

Finally, if the RV remains unclaimed after the 45-day period, the park can either throw away or give away the RV if the park estimates that the current fair market value is $1,000 or less, or so low that the cost of storage and conducting an auction probably exceeds the amount that could be realized from a sale. If the estimated value is more than $1,000, the park must hold an abandonment auction using the procedures described by the abandonment statute. (As usual, retain experienced legal counsel if unfamiliar with the abandonment process and procedures.)

Answer: Be aware that utility charges, late fees, etc. are not “rent.” Rent is the charge for the resident’s right to remain at the space. As you know from the MHCO 72-hour Notice, the right to evict only arises when the rent remains unpaid for seven days following the date of payment, which is usually the first of the month. The extra charges for late fees, utilities, and other expenses the landlord has a right to collect under the rental or lease agreement do not provide the basis for eviction under the 72-hour Notice. A landlord’s right to terminate a tenancy for payment of non-rent charges can be handled in two ways: (a) By issuance of a 30-day notice of termination; or (b) Small Claims Court. If the resident’s payment does not include 100% of the rent that is due, that is a different story. In that case, the landlord does not have to accept partial rent. However, if a landlord is willing to do so, he/she must secure a written agreement. Here’s what ORS 90.417 says: • A landlord may accept a partial payment of rent. • If the acceptance of a partial payment of rent is in accordance with the following protocol, it does not constitute a waiver of the landlord’s right to terminate the tenancy for nonpayment of the balance of the rent owed. • Here is the required protocol: Acceptance of a partial payment of rent waives the right of the landlord to terminate the tenant’s rental agreement for nonpayment of rent unless: o The landlord accepted the partial payment of rent before he/she gave a nonpayment of rent notice based on the tenant’s agreement to pay the balance by a time certain and the tenant does not pay the balance of the rent as agreed; o The landlord’s 72-hour notice must be served no earlier than it would have been permitted under the 72-hour notice statute, had no rent been accepted; and o The notice permits the tenant to avoid termination of the tenancy for nonpayment of rent by paying the balance within 72 hours or 144 hours, as the case may be, or by any date to which the parties agreed, whichever is later; or o The landlord accepted a partial payment of rent after giving a nonpayment of rent termination notice and entered into a written agreement with the tenant that the acceptance does not constitute waiver. The written agreement may provide that the landlord may terminate the rental agreement and file for eviction without serving a new 72-hour notice if the tenant fails to pay the balance of the rent by a time certain. • Note that a landlord and tenant may by written agreement provide that monthly rent can be paid in regular installments of less than a month pursuant to a schedule specified in the agreement. Such installment rent payments are not partial payment of rent under ORS 90.417.

Answer:  The park cannot guarantee that health safety measures will be followed by everyone and it is not your job to police the stay-at-home order.  There is little in the way of legal enforcement mechanisms that the park can use to enforce COVID-19 safety measures, particularly on the tenant’s own space.

The best that you can do is to remind residents that for the overall safety of everyone in the park, they should avoid congregating on anyone’s rental space.  Your reminder could include the admonition that residents are obligated under Oregon law to notdisturb the peaceful enjoyment of the premises, and that gatherings right now pose a threat to that peaceful enjoyment. (With regard to visiting family members or guests, there is little you can do to prohibit that issue as long as they are not otherwise violating park rules.)

You do have more control over common areas such as playgrounds, recreational halls, swimming pools, etc. To the extent possible, you should close those areas to help reduce your risk of liability for any claims of negligence should someone become sick after using your park facilities.  For common areas that are necessities, such as laundry rooms or restrooms, post and enforce reasonable social distancing requirements according to government recommended practices, and more regularly clean and sanitize those facilities. 

If certain tenants or groups of tenants persist in gathering in an unsafe manner on their rental spaces, you might have good reason to issue a 30/14-day, for-cause eviction notice for disturbing the peaceful enjoyment of the premises.  Or, if a tenant did something intentional like trying to cough on someone, for example, then you could probably issue a 24-hour eviction notice for “outrageous behavior.”  However, as always, check with an attorney before issuing any eviction notices along these lines.

Answer: This was covered in a December 2016 MHCO Article. The major change in the law since then was due to the elimination of 72-hour notices of nonpayment of rent. Now a 10-day notice must be issued. (MHCO does not have a form for 144-hour notices, but it too has been eliminated. It has been replaced by a 13-day notice.)  For partial payments, MHCO members do have access to "MHCO Form 12: Receipt and Agreement for Partial Payment of Rent" available on-line at MHCO.ORG.

Withour a legal agreement to make specific and timely installment payments, tenants are required to tender to the landlord the full amount of rent owed under the rental or lease agreement no later than the date provided. Without a proper written agreement, the landlord may refuse to accept the tenant’s tender of rent that is for less than the full amount of rent due.[1]

If landlord is willing to accept partial payments, doing so must strictly follow ORS 90.417. If so, the acceptance of a partial payment will not constitute a waiver under ORS 90.412 (Waiver of termination of tenancy) or the landlord’s right to terminate the tenancy for nonpayment of the balance of the rent owed. Notwithstanding any acceptance of a partial payment of rent, the tenant continues to owe the landlord the unpaid balance of the rent.

However, the agreement must be in writing. It must specify the amount and date of the required payments. If the tenant fails to pay the balance due as agreed, landlord may issue a 10-day notice of termination under ORS 90.394 (Termination of tenancy for failure to pay rent). The written agreement should provide that the landlord may terminate the rental agreement and take possession under the eviction statutes (ORS 105.105  to 105.168) without serving a new 10-day notice under ORS 90.394 if the tenant fails to pay the balance of the rent by the agreed-upon time.

However, there are two important rules against giving the landlord rights under the written agreement that are more favorable than already permitted under the law. Specifically:

• It cannot permit the landlord to issue a termination under ORS 90.394 any sooner than would have been permitted had no rent been accepted; and
• The notice of termination must permit the tenant to cure it by paying the balance within the time period already allowed under ORS 90.394  (or by any date to which the parties agree, whichever is later.

Note that if the landlord already accepted a partial payment of rent after giving a nonpayment of rent termination notice under ORS 90.394, and then entered into a written agreement for installment payments, doing so will not constitute a waiver.

As always, before entering into a written agreement, landlords should consult with their legal counsel should they have any ques

[1]  Similarly, the landlord is not legally required to accept the tender of a late payment even if it is for the correct amount. However, if the rules or rental agreement provide for a late payment fee, I do not believe the landlord should refuse a late payment tender within the late-fee period. Can the landlord insist on payment of the fee with the tender of the late payment? My concern about doing so is the argument that the “fee” is not “rent.” I would not recommend refusing to accept any late payment unless there was a collateral issue involved, such as waiver – in which legal counsel should be consulted. If rent is tendered after issuance of the 10-day notice but before an eviction is filed, I would still advise my client to accept it. My belief is that once the court learns that rent has been tendered, albeit late, the judge would not likely grant an eviction. My belief is that the “3-strikes” rule under ORS 90.630(10) should suffice for habitual late payers. In all other case, granting some latitude (with collection of a late fee under the rental agreement of rules) should suffice in most cases. Some attorneys may disagree. Legal counsel should always be consulted if there are any questions.

Answer. Your confusion is understandable, because there are no black and white guidelines.  However, attached to this short article is a copy of a publication recently posted on the National Association of Realtors® website. It comes up at the top of the list on a Google search for “NAR disparate impact”, here.  It is simple, straightforward, and something you may wish to use.

If I were to list my rules of thumb[1] that I would follow if I were a manager or park owner, I’d distill them down to the following:

1. Subject to Nos. 8 and 9 below, don’t screen out persons solely for arrests;
2. You may distinguish between non-violent vs. violent convictions;
3. You may distinguish between misdemeanor, driving, and felony convictions;
4. You may distinguish between a single conviction vs. multiple convictions;
5. You may distinguish between a recent conviction and one long ago;
6. You may distinguish between persons who have a verifiable history of rehabilitation following a conviction (You should check personal references for this), vs. those with no such verifiable history;
7. Related to No. 6, you want to find out where the applicant has lived and worked during the years since the conviction.
8. Absent compelling mitigating circumstances, I would be very hesitant to admit into a community anyone with a conviction for a violent crime (i.e. any crime against the person, such as assault, etc.) within the last seven years; ditto for arson.
9. I would automatically reject anyone either under arrest, pending trial or plea, or a conviction anytime, based upon a sexual assault, sexual abuse, or any other sex related crime – regardless of whether they are on any public lists. The reason for this hardline position (as well as No. 8, above) is that as a part of your screening process, the law permits you to consider the safety of others in the community – that should always be your Number One rule of thumb.
10. You have the absolute right to automatically reject an applicant who has had a conviction for the illegal manufacture or distribution of a controlled substance.
     

In conclusion, always remember that if the applicant does not pass screening based upon any other valid criteria, then you do not have to go through the criminal background analysis at all. For example, if a person does not meet the financial requirements, or has a poor rental history, that is sufficient to reject them. Only if they qualify in the other screening areas, but have one or more criminal convictions, should you even need to make the above analysis.

[1] This is to say that I’m not “legally advising” you to follow my list. You may develop your own.

The renting of spaces by manufactured homes in a manufactured home community is governed by the Oregon Residential Landlord and Tenant Act in Chapter 90 of the Oregon Revised Statutes. The Act requires that a written rental Agreement, Statement of Policy and Rules and Regulations be provided to each tenant renting a space in a manufactured housing community. This agreement, which includes or incorporates the community rules and regulations, becomes the contract that governs the relationship between the landlord and the tenant. Much of what you may or may not be able to do in your community will be addressed in the rental agreement.

Although many residents in your community may have rental agreements that are 5 or 10 years old, residents moving in to your community must be given a current rental agreement that conforms with the most recent amendments of Residential Landlord and Tenant Act and Federal Fair Housing Act. MHCO form '5A', "Manufactured Dwelling Space Rental Agreement/Dispute Resolution Addendum" (for month to month tenancies) and MHCO form '5B', "Manufactured Dwelling Space Lease Agreement/Dispute Resolution Addendum" are available through MHCO or you may have a rental agreement drafted by your attorney.

The Oregon Legislature occasionally adopts revisions to the Landlord and Tenant Act. Landlords and managers should make sure that they are utilizing the most current Rental Agreement. Rental Agreements generally may not be changed after execution, with the exception of mutual agreement of the parties; rent increases; and statutory changes (requirements of revised laws will apply even though not stated in the pre-existing agreement). ORS 90.510(4).

The MHCO Rental Agreement is designed to meet the current requirements of Oregon State Law. The Rental Agreement, which is intended for use in all classifications of parks, can be changed or altered to suit individual situations. In either event, you should consult with your attorney in order to insure that the agreement you choose meets all the legal requirements. It is important to remember that the tenant cannot be required to waive any rights that are granted to the tenant/resident by Oregon State Law.

The Rental Agreement should be completed and signed by both the landlord and the tenant/resident PRIOR to the home being moved into the community or PRIOR to the tenant/resident occupying a home already sited in the community. 

Even when you have solid evidence that a resident has violated the lease or your community’s rules, he may try to turn the tables by questioning your motives. Unless you’ve applied the rules fairly and consistently, you could suddenly find yourself on the defense if it looks as though you’re acting in a discriminatory manner.

For example, the resident may argue that you took a hard line against him for breaking the rules only because he was a member of a protected class, and his claim could get some traction if he can show that you allowed other residents—who did not share his protected characteristic—to get away with the same or similar infractions. Evidence of inconsistent enforcement of your rules could lead a court to conclude that his violation of the rules wasn’t the real reason for evicting him, but merely an excuse to cover up unlawful housing discrimination.

Avoid the temptation to bend the rules for some people, but not for others, just because you happen to be friends with them or you think they’re nice people. You may not intend to discriminate against anyone, but treating some residents better than others may give the impression that you have discriminatory reasons for holding other residents to higher standards

Q: What happens after I give them the financial information?

A: The tenants committee must (1) form a corporate entity that is legally capable of purchasing property or associate with a nonprofit corporation or housing authority that is legally capable of purchasing real property or that is advising the tenants about purchasing the park in which the tenants reside; and (2) submit a written offer to purchase the park, in the form of a proposed purchase and sale agreement, and either a copy of the articles of incorporation of the newly formed entity .

Q: Do I have to accept the offer?

A: No. You may accept, reject or submit a counteroffer. You should view the tenants (and negotiate with them) as you would a potential purchaser. If the offer is far off, reject the offer and explain why it's far off (e.g. unreasonable financing terms, not enough cash, long closing date). If the offer is close to the mark, counter with terms. The key is to deal with the tenants committee as you would any bona fide purchaser. don't treat them differently just because they are tenants.

Q: What happens if the tenants don't respond within the 10 days or don't respond within the 15 days of me providing financial information?

A: You have no further duties under the statute.

Q: What do I do if I think this process is only being invoked to harass me?

A: Call your lawyer. The parties (including the tenants) arerequired to act in a commercially reasonable manner. Depending on the conduct (and the ability to establish the conduct and motive) your attorney should be able to develop a strategy to combat poor behavior.

Q: I've entered into a purchase and sale agreement with a separate buyer and I haven'tfollowed the process. What should I do?

A: Call your lawyer. It may be fixable, but failing to follow this process allows affected tenants to obtain injunctive relief to prevent a sale to a third-party purchaser (which could cause you to be in breach with that third party purchaser) and to recover the greater of actual damages or 2 times the monthly rent. Bottom line is be aware of your responsibilities and follow the statute.

Q: What do I do after I've completed the process?

A: You must file an affidavit certifying that you've complied with the process and that you have not entered into a contract for the sale or transfer of the park to an entity formed by or associated with the tenants. The purpose of this affidavit is to preserve the marketability of title to parks.

Q: Who are you and why are you talking to me?

A: I serve as the Partner in Charge of the Portland office of Davis Wright Tremaine. DWT is a full service law firm with 500 attorneys on both coasts and in Shanghai, China. The Portland office consists of approximately 80 attorneys and over 80 staff. I work with my clients to resolve their legal problems through pre-litigation counseling, litigation, and mediation. I try cases in state and federal courts and through private arbitration. My experience includes defending and prosecuting business torts; breach of contract claims; disputes between and among members of limited liability companies; residential and commercial real estate matters, including landlord-tenant, title, lien, and timber trespass disputes; and probate and trust cases. I speak often at MHCO seminars and conferences. You can reach me here: http://www.dwt.com/people/WilliamDMiner/

Bill Miner is currently Partner in Charge of the Portland office of Davis Wright Tremaine. DWT is a full service law firm with 500 attorneys on both coasts and in Shanghai, China. The Portland office consists of approximately 80 attorneys and over 80 staff. He works with clients to resolve their legal problems through pre-litigation counseling, litigation, and mediation. He tries cases in state and federal courts and through private arbitration. His experience includes defending and prosecuting business torts; breach of contract claims; disputes between and among members of limited liability companies; residential and commercial real estate matters, including landlord-tenant, title, lien, and timber trespass disputes; and probate and trust cases. He is a frequent and popular speaker at MHCO seminars and conferences. You can reach Bill at: http://www.dwt.com/people/WilliamDMiner/

Bill Miner | Davis Wright Tremaine LLP
1300 SW Fifth Avenue, Suite 2300 | Portland, OR 97201
Tel: (503) 778-5477 | Fax: (503) 778-5299
Email: billminer@dwt.com | Website: www.dwt.com