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Phil Querin Q&A: Sub Lease Occupant and Eviction

Phil Querin

Answer: This fact pattern should be a cautionary tale for all park owners and managers about the risk of letting too much time elapse between the violation and legal action. In order to fully answer the question, I need to assume certain facts. First, I assume that the rules clearly do not permit one to occupy a home without management approval. Secondly, I assume that some form of permitted subleasing is OK, so long as the subtenant is approved by management. Third, I assume that someone - presumably the father - has been paying the rent.


If rent has been accepted with knowledge of this violation, it would be deemed to have been waived after the second acceptance of rent - regardless of who paid it. Clearly, if the rules prohibit this, as does the rental agreement and law, action should have been taken the moment she refused to cooperate.


The best solution may be for the father to proceed with the eviction, since he is a "landlord" under the non-manufactured housing side of the Landlord-Tenant law. Clearly, he can work it out with her and/or the court, better than management working with the recalcitrant occupant, who has already established her unwillingness to cooperate. Besides, why should the park absorb this expense, when it is really between the father as a "landlord" and his daughter as the "tenant." (I don't know why the judge sent them home, but suspect it was to try to resolve it as a family matter rather than a court matter.)


As for whether to accept the rent, it's already pretty late to be worried about "waiver" since that has long since been confirmed to have occurred. Nevertheless, I would NOT accept the rent until this matter is resolved.


The problem with park management doing the eviction based upon an "unauthorized occupant," violation, is that it's too late to enforce, in my opinion. However, your question about a "No-cause" eviction suggests that you believe this might be a viable alternative - i.e. the legal basis for eviction arises under the non-manufactured housing side of the statutes. I don't think so. First, because the manufactured housing side of the law still applies vis a vis the father, and regardless, rent has been accepted, making the waiver argument a real possibility.

Property Management - Tips and Traps

Phil Querin
  1. Make sure that the rental agreement really applies to your situation.  The MHCO rental agreement comes in two flavors: (a) The month-to-month (or “periodic”) rental agreement, and (b) the lease (or fixed term) agreement.  The difference is that the month-to-month agreement runs for 30 days at a time.  In the absence of termination, the periodic tenancy just “rolls over” month to month.  Regardless of which agreement is used, landlords renting or leasing spaces to residents in mobile home parks may generally not terminate them without cause.  However, a lease for at least two years carries a distinct advantage in that the park documents, i.e. the lease agreement and the park rules, may be automatically updated at the end of each lease term.  While there are certain limitations upon the landlord’s right to impose new park documents on the resident, it is clearly much easier to do under a lease than a monthly rental agreement. [2]  Also, landlords using a

fixed term lease agreement must expressly incorporate any rent increase provisions into the written agreement.  The rent increase statute, ORS 90.600, applies only to periodic (e.g. month-to-month) tenancies and not fixed term tenancies.  If the home located upon the space is a recreational vehicle rather than a manufactured home, landlords should not use the standard mobile home space rental agreement.  The reason is that the mobile home park section of the landlord-tenant law does not apply to recreational vehicles.[3]  When renting space for a recreational vehicle, landlords should use an appropriate RV rental form.

 

  1. Make sure that the rental agreement is signed by all adult tenants who will occupy the space.  This not only financially obligates them under the agreement, but it makes it easier to enforce violations against rules offenders.  Do not permit occupancy of a home until the rental agreement has been fully signed by everyone.  Trying to get signatures after-the-fact can be difficult, if not impossible.

 

  1. Make sure that the Statement of Policy, Rules, and Rental Agreement are given to the resident and properly receipted for.  Occasionally, residents deny receiving one or more of these documents.  However, the signed receipt by the resident is legal evidence of delivery of these documents.  ORS 90.510(9) provides that a signed receipt is a defense to a claim against the landlord for nondelivery of these documents.

 

  1. Similarly, landlords should make sure that the rights they summarize in the Statement of Policy accurately reflect their rental agreement and rules.  When using the MHCO forms this is not a problem.  It could be, however, when different forms from different sources are used, and the Statement of Policy provides that the resident has (or does not have) certain rights that are not consistent with those found in the rental agreement or rules. The Statement of Policy is not intended to be a binding legal document.  It is supposed to merely summarize the rights and duties of the resident which are found in the rental agreement or rules.

 

  1. Understand the rights given you under the rental agreement form.  Not knowing your rights can result in not enforcing violations, which can lead to a waiver of those rights.[4]

 

  1. One of the more important provisions of the rental agreement form is the one which prohibits assignment, subletting or transfer of possession of the agreement or space without the landlord’s prior written consent.  Landlords should make sure that when a resident vacates, leaving a guest or visitor at the space, immediate action is taken to either terminate the tenancy or require that the occupant promptly apply for tenancy by filling out all required documentation.  Do not accept rent from the occupant, the ex-tenant, or on the occupant’s behalf, until the issue has been thoroughly resolved.

 

  1. Be aware that the fire insurance provision does not apply unless it is specifically checked:  It requires that the resident must maintain a homeowner's policy of insurance that includes coverage for fire in an amount sufficient to replace the home, and permits the landlord to request a current copy of the policy.

 

  1. Similarly, landlords should be sure to have the resident initial those portions of the rental agreement which require them to do so.  There are several such places found in the sections dealing with (a) sale of the home and (b) the resident’s legal obligations under the tenancy.  When these sections are not properly initialed, there remains an argument that it is not binding.  Although such an argument would not likely carry the day, it can be avoided entirely by simply making sure that when the agreement is signed, all internal provisions are properly completed, checked and initialed where appropriate.

 

  1. The landlord’s rights upon a resident’s resale are very important and need to be fully understood by both parties.  One such section of the resale portion of the rental agreement provides that in the event the resident (or their predecessors) has/have made any improvements or alterations to the interior or exterior of the home which did not conform to all applicable local, state and federal building codes or ordinances in existence at the time the work was performed, the landlord has the right to require, as a condition of consent to the sale, that such improvement or alteration be brought up to all applicable local, state and federal building and construction standards in existence at the time of the sale.  When homes have been substantially remodeled, especially where electrical or plumbing systems are involved, this provision may be useful for the landlord to enforce in order to make sure that the proper building codes are followed.

 

  1. Disputes are an inevitable part of being a landlord.  MHCO believes that assigning fault is less important that securing a workable resolution.  Landlords should be aware that Oregon law requires them to have a informal dispute resolution process in their rental agreement.[5]   The MHCO form provides that in the event of any dispute regarding the interpretation or enforcement of the rental agreement or the rules and regulations, either party shall have the right to have the matter handled through the alternative dispute resolution (“ADR”) process set forth in the attached MHCO Addendum, which is incorporated into the agreement.  If a resident request some form of informal dispute resolution, landlords should promptly respond in doing so.

 

[1] ORS 90.610(2).

 

[1] ORS 90.245 Provides prohibits the following provisions in a rental agreement: (a) Agreement to waive or forgo rights or remedies under the landlord-tenant law; (b) Agreements authorizing any person to confess judgment on a claim arising out of the rental agreement; or (c) Agreements relieving or limiting a landlord’s liability arising as a result of his or her willful misconduct or negligence or agreements requiring the tenant to indemnify the landlord for that liability or any costs connected therewith.  Any provision prohibited in ORS 90.245 is unenforceable. If a landlord deliberately uses a rental agreement containing provisions known by the landlord to be prohibited and attempts to enforce such provisions, the tenant may recover, in addition to the actual damages, an amount up to three months’ rent.

ORS 90.135 provides that “(1)f the court, as a matter of law, finds (a) A rental agreement or any provision thereof was unconscionable when made, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provision, or limit the application of any unconscionable provision to avoid an unconscionable result****”

 

[2] See, ORS 90.540, 90.545, and 90.610(3) – (8).

[3] See, ORS 90.505 and 90.100(23).

[4] See, ORS 90.415.

 

Phil Querin Q&A: Sub Leasing and Eviction

Phil Querin

Answer: This fact patter should be a cautionary tale for all park owners and managers about the risk of letting too much time elapse between the violation and legal action. In order to fully answer the question, I need to assume certain facts. First, I assume that the rules clearly do not permit one to occupy a home without management approval. Secondly, I assume that some form of permitted subleasing is OK, so long as the subtenant is approved by management. Third, I assume that someone - presumably the father - has been paying the rent.

If rent has been accepted with knowledge of this violation, it would be deemed to have been waived after the second acceptance of rent - regardless of who paid it. Clearly, if the rules prohibit this, as does the rental agreement and law, action should have been taken the moment she refused to cooperate.

The best solution may be for the father to proceed with the eviction, since he is a "landlord" under the non-manufactured housing side of the Landlord-Tenant law. Clearly, he can work it out with her and/or the court, better than management working with the recalcitrant occupant, who has already established her unwillingness to cooperate. Besides, why should the park absorb this expense, when it is really between the father as a "landlord" and his daughter as the "tenant." (I don't know why the judge sent them home, but suspect it was to try to resolve it as a family matter rather than a court matter.)

As for whether to accept the rent, it's already pretty late to be worried about "waiver" since that has long since been confirmed to have occurred. Nevertheless, I would NOT accept the rent until this matter is resolved.

The problem with park management doing the eviction based upon an "unauthorized occupant," violation, is that it's too late to enforce, in my opinion. However, your question about a "No-cause" eviction suggests that you believe this might be a viable alternative - i.e. the legal basis for eviction arises under the non-manufactured housing side of the statutes. I don't think so. First, because the manufactured housing side of the law still applies vis a vis the father, and regardless, rent has been accepted, making the waiver argument a real possibility.

Rent Increases Before New Rent Control Legislation Becomes Law

Phil Querin

Question:  All indications are that the 2023 legislature is going to revisit the rent increase formula currently in effect, and once passed it would likely become law immediately upon the Governor’s signature. How can landlords deal with having already issued a September 2022 90-day rent increase notice if the 2023 rent cap is legislatively reduced before the landlord’s previously-issued September 2022 increase goes into effect?

 

Answer: Currently, ORS 90.600(2)(b) limits rent increases to 7% plus CPI (“Cap”) for any 12-month period. For 2023 that resulted in a Cap of 14.6%.[1] This amount surprised some, and we can fully expect the Oregon Legislature to pass a new law that could effectively reduce the Cap.

 

Note, that I do not read the law to limit rent increase after the first year of a month-to-month tenancy to only once per year – so long as the annual Cap is not exceeded in total. However, I believe that rent increase are generally limit to one-a-year by most Oregon MHP landlords.

 

Note also, that since ORS 90.600 only applies to periodic tenancies, i.e., month-to-month, the Cap does not apply to rent formulas in leases, i.e., fixed term tenancies. However, it has been my understanding that this was a legislative oversight in 2019; if so, the 2023 Legislature may change that, as well.

 

Currently, the text of ORS 90.600 provides that the landlord may not increase the rent (a) without giving each affected tenant notice in writing at least 90 days prior to the effective dateof the rent increase; and (b) during any 12-month period, in an amount greater than seven percent plus the consumer price index above the existing rent.

 

My reading of this is that so long as the rent does not exceed the Cap during a particular year – there is no limit on when the notice of 90-day increase may be issued. To put it another way, “increasing the rent” is not the same as “giving notice” of an increase in rent. There is no restriction against the frequency of the notices, just increases that exceed the applicable Cap.

 

For example, say word was out that the 2023 Legislature was going to dramatically reduce the Cap going forward. In my opinion, a landlord having already issued a 90-day rent increase notice in September 2022, effective January 1, 2023 (or later) would have two choices:

  1. Rescind the 2022 notice before it becomes effective, and re-issue a new 90-day notice for a different rent effective in 2023, so long as it was done before the effective date of the new legislation and did not exceed the 2023 Cap establish in 2022.

 

  1. Don’t rescind the earlier 2022 notice but issue a second rent increase notice that does not, in total, exceed the 14.6% Cap - so long as it is issued before the new 2023 legislation becomes effective.[2] Caveat: The 2-notice approach needs to make sure that the rental agreement or other park docs don’t limit increases to one per year.

 

Note that for both Nos. 1 and 2 above, the rent increase notice cannot be sent to any tenants who still have rent payments due on their first year of tenancy (including occupancy that may have preceded the signed rental agreement).

 

SB 608, the 2019 law amending ORS 90.600 and creating the Cap, applied to “rent increase notices delivered on or after the effective date of this 2019 Act.” In other words, the Legislature did not attempt to retroactively (and likely illegally) interfere with a rent increase that had already been issued before SB 608 went into effect.

 

Following that logic, should a landlord wish to rescind a 2022 90-day rent increase for 2023 and reissue a different one, it should be entirely legal so long as it is issued before the effective date of the legislation creating a new Cap.

 

Caveat: Landlords should check with their own legal counsel before rescinding any 2022 90-day notices or reissuing a second 90-day notice for 2023 rents under the 14.6% Cap.

 

 

[1] https://www.multifamilynw.org/news/2023-oregon-maximum-rent-increase-is-146

[2] For example, a 5.00% increase notice issued in September 2022 and a second notice for something less than 9.6% issued before the 2023 legislation becomes effective.

Phil Querin Q&A: Rent Increases With Legislative Action Pending (90-Day Rent Increase Notices Sent Before 2023 Legislation Becomes Law)

Phil Querin

90-Day Rent Increase Notices Sent Before 2023 Legislation Becomes Law

 

Question:  All indications are that the 2023 legislature is going to revisit the rent increase formula currently in effect, and once passed it would likely become law immediately upon the Governor’s signature. How can landlords deal with having already issued a September 2022 90-day rent increase notice if the 2023 rent cap is legislatively reduced before the landlord’s previously-issued September 2022 increase goes into effect?

 

Answer: Currently, ORS 90.600(2)(b) limits rent increases to 7% plus CPI (“Cap”) for any 12-month period. For 2023 that resulted in a Cap of 14.6%.[1] This amount surprised some, and we can fully expect the Oregon Legislature to pass a new law that could effectively reduce the Cap.

 

Note, that I do not read the law to limit rent increase after the first year of a month-to-month tenancy to only once per year – so long as the annual Cap is not exceeded in total. However, I believe that rent increase are generally limit to one-a-year by most Oregon MHP landlords.

 

Note also, that since ORS 90.600 only applies to periodic tenancies, i.e., month-to-month, the Cap does not apply to rent formulas in leases, i.e., fixed term tenancies. However, it has been my understanding that this was a legislative oversight in 2019; if so, the 2023 Legislature may change that, as well.

 

Currently, the text of ORS 90.600 provides that the landlord may not increase the rent (a) without giving each affected tenant notice in writing at least 90 days prior to the effective dateof the rent increase; and (b) during any 12-month period, in an amount greater than seven percent plus the consumer price index above the existing rent.

 

My reading of this is that so long as the rent does not exceed the Cap during a particular year – there is no limit on when the notice of 90-day increase may be issued. To put it another way, “increasing the rent” is not the same as “giving notice” of an increase in rent. There is no restriction against the frequency of the notices, just increases that exceed the applicable Cap.

 

For example, say word was out that the 2023 Legislature was going to dramatically reduce the Cap going forward. In my opinion, a landlord having already issued a 90-day rent increase notice in September 2022, effective January 1, 2023 (or later) would have two choices:

  1. Rescind the 2022 notice before it becomes effective, and re-issue a new 90-day notice for a different rent effective in 2023, so long as it was done before the effective date of the new legislation and did not exceed the 2023 Cap establish in 2022.

 

  1. Don’t rescind the earlier 2022 notice but issue a second rent increase notice that does not, in total, exceed the 14.6% Cap - so long as it is issued before the new 2023 legislation becomes effective.[2] Caveat: The 2-notice approach needs to make sure that the rental agreement or other park docs don’t limit increases to one per year.

 

Note that for both Nos. 1 and 2 above, the rent increase notice cannot be sent to any tenants who still have rent payments due on their first year of tenancy (including occupancy that may have preceded the signed rental agreement).

 

SB 608, the 2019 law amending ORS 90.600 and creating the Cap, applied to “rent increase notices delivered on or after the effective date of this 2019 Act.” In other words, the Legislature did not attempt to retroactively (and likely illegally) interfere with a rent increase that had already been issued before SB 608 went into effect.

 

Following that logic, should a landlord wish to rescind a 2022 90-day rent increase for 2023 and reissue a different one, it should be entirely legal so long as it is issued before the effective date of the legislation creating a new Cap.

 

Caveat: Landlords should check with their own legal counsel before rescinding any 2022 90-day notices or reissuing a second 90-day notice for 2023 rents under the 14.6% Cap.

 

 

[1] https://www.multifamilynw.org/news/2023-oregon-maximum-rent-increase-is-146

[2] For example, a 5.00% increase notice issued in September 2022 and a second notice for something less than 9.6% issued before the 2023 legislation becomes effective.

MHCO Legislative Update - 2017 Oregon Legislature Ends - House Speaker Vows To Continue Push for Rent Control

After working through much of the 4th of July weekend and holiday legislators wrapped up their legislative business today. The last bill that MHCO opposed - HB 2004B - did not move out of the Senate. The Senate Rules Committee adopted numerous amendments none of which could get the necessary 16 votes in the Senate to pass. So - no rent control and no changes to 'no cause' eviction. 

These issues (rent control and 'cause eviction') will not be going away and will return in the 2018 'short' legislative session. House Speaker Kotek issued a press release earlier today stating - "We made good progress, but we need to do more to protect renters from staggering rent spikes and no- cause evictions. In 2018, we will push to finish this session's unfinished business on housing ...". The war on Oregon landlords continues ... stay tuned!

All in all a rough legislative session but the end result should please everyone. Our success this session would not have been possible without the active engagement of MHCO members. Thanks to everyone who showed up for Lobby Day in February, sent emails, called legislators, showed up and testified at critical public hearings. Without YOUR INVOLVEMENT we would have faced a very different outcome. The quality and quantity of YOUR INVOLVEMENT made the difference. THANK YOU! 

There were changes to several landlord tenant issues such as disrepair and deterioration. MHCO Forms are currently being reviewd and updated. Phil Querin, MHCO's legal counsel, is preparing a summary of those changes and how they impact the operation of your community. We hope to have that available to MHCO members later this month. We will also be covering those changes extensively at the MHCO Annual Conference in Eugene (October 23-24) - registration will open in early August. 

If you have any questions or concerns or would like to become a member of MHCO with access to over 60 forms tailored to YOUR manufactured home community and a data base of over 200 articles specific to manufactured home communities please call the MCHO office at 503-391-4496.

Changing 55 and Older Status and Community Rules

Question: A landlord changed the status of the community from "Family" to "55&Older" in June. Management did not change the rules and regulations. However, they did advertise the community as "55&Older -"; identified that status in the community's Application Criteria; and have met the requirements of the "80/20 Rule". Now the community owner is changing the rules. One of the many rule change includes altering the status of the community from "Family" to "55 & Older". It is likely that the residents will have enough votes in the petition to vote down the rule changes. Where does this leave the community's "55 & Older Status"? Does that status actually need to be in the rules?Answer: I believe the rule change is essential. The reason is that it is the primary document (along with the rental agreement) that defines how the park is to operate under a 55+ regime. Here is a brief summary of how these conversions should occur:Currently, in order to qualify for the 55+ exemption under the Fair Housing Amendments Act of 1989 ("FHAA -") and the Housing for Older Persons Act ("HIPA -") of 1999, a community must comply with the following requirements:1. Be intended and operated for persons age 55 or over. This intent can be met by such things as (1) The manner in which the community is described to prospective residents; (2) Advertising designed to attract prospective residents; (3) Lease or rental provisions; (4) The written rules and regulations; (5) Consistent application of the rules, regulations and procedures; (6) Actual practices; and (7) Publicly posting statements describing the facility as a 55+ community. The age verification procedures must be updated every two years. This means maintaining a complete file on each space, including with the tenant application updated information, circulated every two years, confirming the names and ages of all persons who are currently residing in the home.2. Have at least one person who is 55 years of age or older living in at least 80% of its occupied units. This 80/20 rule is critical. Generally, communities strive to be over 80%, since falling below 80% means immediate disqualification. Does this mean that the 20% margin must be reserved for families with children? The answer is "No." In fact, a 55+ community may strive for 100% occupancy by persons age 55 or over. Does it mean that community management must accept otherwise qualified age 55+ applicants when the second or subsequent person occupant is 18 years of age or older? Again, the answer is "No." If desired, the community may increase the age requirement for the second or subsequent occupant to 25 years, 30 years, or even 55+ years. Similarly, the community may impose a more restrictive minimum age requirement than 55. However, it is important for park owners and managers to make sure that all such age/occupancy requirements be properly reflected in the community's Rules and the Statement of Policy - and be consistently applied. 3. Publish and adhere to policies and procedures that demonstrate an intent to be operated as a 55+ community. This requirement is fairly self-explanatory. The community must make sure that in all that it does, from its advertising, rules, rental agreements, and all other policies, it always hold itself out as a 55+ facility. 4. Comply with HUD age verification of occupancy procedures to substantiate compliance with the requirement that 80% of the facility be intended to be occupied by at least one person age 55 or over. The law provides that the following documents are considered reliable for such verification: (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. Today, if the community can meet the HOPA requirements in all respects (not because it discriminated in getting there, but simply by attrition of family occupants and the influx of more 55+ residents), it should be permitted to do so. The process would be fairly simple for those communities that exceed the minimum 80% floor (i.e. at least one occupant age 55 or over): Implement a rules change to conform with the 55+ laws, combined with new published policies and age verification procedures, which confirm the community's 55+ status. One caveat: Even though the Oregon landlord-tenant law does permit rules changes to implement material modifications in the parties' bargain, there is a risk of possible argument by families in the community, complaining that they are now limited in the pool of available buyers for their homes. However, this risk can be remedied by "grandfathering"those family residents in, thereby permitting them to sell their homes to other families. This assumes, of course, that by doing so, the community would not jeopardize its 80%-20% ratio. Before proceeding down this path, park owners are urged to contact their own legal counsel familiar with the FFHA and HOPA for advice and direction.

Pacific Northwest Update - 2020 Issues - NW Park Brokerage

Editor's Note:  The following article was provided by Northwest ark Brokerage. For more information on manufactured home communities for sale or an assessment of your community call Bill Jackson of Northwest Park Brokerage at (206) 652-4100 or email Bill at: billj@nwparks.com.  

*****

Everybody is wondering what type of year 2020 will shape up to be.  Elections, international unrest, political infighting, tariffs, taxes and a laundry list of other issues has kept everyone guessing.  None of us know what the future will bring, but in the housing industry two things will help us stay healthy and grow steadily – low interest rates and a strong economy.  

 

CAP RATESFrom what we have seen recently CAP rates can vary greatly, depending on the age and quality of the park/community and its location. 

 

Low interest rates combined with rising Net Operating Incomes are minimizing CAP rates in most areas of the country.  Coastal metropolitan areas account for lower CAP rates than other regions, where quality, larger communities are demanding CAP rates in the 4% range, and some have been sub-4%.  Buyers target high caliber parks in this CAP rate range, and they sell within weeks of listing.  This is something we haven’t seen before but there is limited inventory available for buyers targeting quality larger communities, and as private housing costs rise out of reach for many residents, demand for manufactured housing communities will continue to compress CAP rates.  If you are a potential seller of a larger quality community, we would love to talk to you.  We have the buyers.  Older communities in rural areas on septic systems and wells have seen CAP rates as high as the 7% range, but if they can be converted to central, local utilities they have a potential and there is still a strong demand for these properties.

 

INTEREST RATES.  In December the Federal Reserve signaled that it wants to hold off on further interest rate cuts for a while.  At its last meeting the Fed kept the federal funds rate between 1.5% and 1.75%.  Fed Chair Jerome Powell has been in his current position since November 2, 2017 and he expects that the economy will remain stable, but again emphasized that the future path of Fed actions will depend on many different possible events.  

 

The bond market has also been very stable, as rates have changed very little over the past few months.  The yield curve – the gap between rates on short-term and long-term bonds has maintained its historically normal upward sloping line.  This indicates that investors are not worried much about a possible recession occurring this year or next. 

 

If the economy slows the Fed will have a much smaller margin of error.  If market turmoil develops (think war or trade challenges) then the Fed will likely cut rates at least one more time.  However, that could result in the Fed gradually raising rates in 2021 according to a variety of economists and prognosticators. 

 

THE ECONOMY. Most economists seem to agree that the 2020 economy will look much like the 2019 economy.  Long gone are the days of 2007-2009 where real estate foreclosures and bank closures (remember Washington Mutual?) where the daily headline.  Today businesses are by-in-large doing well, unemployment is low, liquidity is plentiful, the stock market is steadily setting new records and many economists believe things will actually get even better in 2021.  The biggest area of uncertainty remains international trade and if that clears up 2020 might even be better than expected.

 

The “demand side” of the economy will be a little subpar, giving a small break to the supply side.  But when spending improves the supply limitations of low labor force growth and slow productivity growth will diminish, leading to increasing demand for products and services and a demand-supply balance.  Households are growing their incomes slightly more than they are growing their spending.  As a result, the savings rate is moving slowly upward.  That’s ideal, as a higher savings rate puts the economy on a more sustainable path.

 

Finally, the growth of income and spending has not been as great in 2019 as in 2018 because job gains are lower.  That results from the tight labor market.  Businesses would hire more if they could find additional qualified workers.  Wages have not risen much, so the income growth rate is lower than back in 2018.  However, the jobs picture is solid, leading to good incomes and a positive attitude among most consumers.  Look for them to continue growing their spending moderately in 2020 and into 2021.

 

Oregon Legislature

 

Senate Bill 586 Becomes Law on January 1, 2020

 

When Senate Bill 586 became law on 01/01/20 it amended several landlord-tenant laws.  Most industry representatives feel the new mediation aspects of this Bill are the most important. Notably, the provision that requires mandatory mediation if either the landlord or the tenant initiates a request for mediation.  They are most likely to be disputes relating to compliance with the rental agreement or modifications in the rules or regulations within the community. 

 

Interestingly, there are a number of types of disputes excluded from mandatory mediation, unless both parties agree otherwise.  They include facility closures, facility sales, rent increases, rent payments and/or amounts due, unauthorized occupants, disputes involving domestic violence or sexual assaults and disputes arising from termination of tenancy under ORS Chapter 90 (Oregon’s Residential Landlord-Tenant Law). 

 

If a community has a mediation policy, it must include a detailed process and format to initiate mediation, the names and contact information for mediation services made available by the Housing and Community Services Department, a clause stipulating that all communications during the mediation process be held in strict confidence, and it may include specific disputes between the landlord and one or more tenant, or a dispute between two or more tenants. 

 

All parties must participate in the mediation by making a good faith effort to schedule mediation within (30) days after it is initiated, attending and participating in the mediation process and cooperating with reasonable requests of the mediator. 

 

Californians Are Moving North

 

A new study by United Van Lines shows California is ranked among the top 10 of “most moved from states” last year, coming in at number 7.  One of the hot spots people are moving to?  Boise, Idaho.  According to the Boise Valley Economic Partnership, in a span of about five years approximately 7,200 Californians have moved to the Boise area.  And if you have visited Boise recently you can attest to this fact by navigating their increasing crowded roadways, bustling restaurants and newly constructed hotels, motels and shops. 

 

Forbes Magazine recently named Boise as the fastest growing metro area in the US, crediting the area’s robust tech sector and job growth.  The median home price is Boise is $332,698.  In San Francisco?  $1,325,000. 

  

Gas prices in Boise are a dollar less than in California and most of the other typical items that make up a family’s cost of living are all significantly less in Idaho.  Also, manufacturers are attracted to the Treasure Valley because of the favorable climate and geological attributes.  Boise is not an area where floods, earthquakes, tornados and hurricanes are a threat, and large companies find that very appealing when investing in large brick-and-mortar factories, data centers and distribution hubs.

 

Oregon is experiencing the same migration, but it’s been going on much longer.  Californians disproportionally move to southern and central Oregon when compared to other parts of the country.  Southern Oregon has been growing at a rate of about 5% per year, but 12% of net migration is from California.  Most other Californians move to the Portland area and the Willamette Valley.  On average 39,320 Californians move to Oregon annually.  But an average of 19,523 Oregonians also make the move south, leaving Oregon with a net gain of 19,797 new residents from California every year.  Also, in central Oregon, Bend has seen a net gain in population from Washington state in recent years.  This is unusual, but in each of the past few years, central Oregon has gained population from all parts of Washington including the Seattle area and SW Washington. 

 

THE NORTHWEST BENEFIT

 

All of this data bodes very well for the housing industry and in particular the manufactured housing industry.  There is a severe housing shortage in Oregon and the Boise, Idaho region, as well as parts of Washington state.  Manufactured housing can provide a quick, affordable, well built and energy efficient housing solution to all these former Californians looking for a better life up north.  This is evidenced by recent reports of increased new and pre-owned manufactured home sales and production. Retailers and manufactures report solid 4th quarter sales and production results in Oregon, Washington and Idaho. 

 

CrossMod – A New Class of Manufactured Home

 

The Manufactured Housing Institute – MHI – recently introduced the official name for the new class of manufactured homes.  “CrossMod is a reflection of the industries commitment to elevate the industry by bringing the quality and innovation that can be found in all off-site built housing, including Manufactured Homes, Modular Homes and now CrossMod homes, to even more home buyers” MHI said in a prepared statement.   The term was developed with involvement from multiple professional agencies and teams of industry participants to serve as a mark of distinction for this new HUD code home category. 

 

“As housing affordability challenges continue to grow, families of all economic backgrounds are searching for attainable, high-quality homes that do not create an unsustainable financial burden.  CrossMod homes are place on a permanent foundation, qualify for conventional financing, help challenge exclusionary zoning ordinances and are virtually undistinguishable from higher-price, site-built options.  Best of all, this new class of off-site built home can be appraised using comparable site-built homes.” 

 

MHI partnered with market research firm Landor to test a variety of names directly with over 1,000 consumers.  Their impression of the term CrossMod included “modern and sleek”, “combines different models and styles”, “sounds secure and safe” and is an “innovative and smart home”  While just 9% of respondents said they would consider purchasing a manufactured home, 46% said they would purchase a CrossMod. 

 

Find out more at www.manufacturedhousing.org  

 

Financing a Manufactured Home Community

 

The latest interest rates for manufactured housing community financing or refinancing on West Coast remain at or near these rates, which continue to fluctuate and have remained steady in the past few weeks.  Here are some of the lowest rates available for $1 - $10 Million:

 

Three-year fixed 4.40%, five-year fixed 4.161%, seven-year fixed 4.255%, ten-year fixed, 4.366% and fifteen-year fixed at 4.322%.  ARM’s are as low as 2.9%.  Rates can be found as high as 5.483% for 20-year fixed rate loans and underwriting requires complete and detailed historical operation data. Rate locks are available up to 90-days prior to close in most cases. 

 

The larger REIT’s and investment funds continue to offer and expand a variety of tax-saving and tax-deferred structures to sellers interested in something other than a 1031 tax-deferred “up leg” exchange or an all-out cash transaction.  Resident purchases are also on the rise.

 

4th Quarter Production Rises

 

According to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD) and verified by the Manufactured Housing Association for Regulatory Reform (MHARR), HUD Code manufactured home production increased in October of 2019 according to the latest reports.  Just released statistics indicate that HUD Code manufacturers produced 9,415 homes in October 2019, up a strong 9.6% from the 8,588 new HUD Code manufactured homes produced during October of 2018. 

 

On a cumulative basis industry production for 2019 totaled 79,912 HUD Code homes, a decline of 3.6% from the 82,942 HUD Code homes produced during the same period in 2018. While this marks a decline in year-over-year production and shipments and margin has narrowed and industry experts are predicting stronger production and shipment numbers in 2020 as a result of newly introduced products and increased consumer awareness of the affordability and quality of today’s manufactured home. 

 

For more information on manufactured home communities for sale or an assessment of your community call Bill Jackson of Northwest Park Brokerage at (206) 652-4100 or email Bill at: billj@nwparks.com

Fair Housing Pit Falls: Charging Tenants a Fee to Process Accommodations Requests

MHCO

Designated parking spaces for mobility-impaired tenants is another frequent source of reasonable accommodations complaints and legal mistakes. Consider this common scenario.

Spot the Discrimination Mistake

A landlord is ready, willing, and able to provide designated parking and other reasonable accommodations for mobility-impaired individuals, provided that those individuals are willing to pay the costs of processing the request.

Pitfall: The ban on charging a fee for granting a requested reasonable accommodation also applies to charging fees or deposits for processing an accommodations request. Requesting processing or administrative fees is a common mistake, especially in the context of parking accommodations that entail monetary costs or additional liability risks to the landlord.

Example: A Pennsylvania senior housing provider had to shell out $80,000 to settle discrimination claims brought by mobility-impaired tenants and fair housing agencies, including for allegedly charging tenants with disabilities as much as $350 for designated parking spaces necessary to make their apartments accessible [Clover Group, May 2020].

Solution: Recognize that if an accommodation is reasonable, you must pay the associated costs out of your own pocket and not charge the requestor a fee or deposit to defray the associated expenses. In addition, you can’t deem a requested accommodation unreasonable simply because it costs time and money to provide.

To reject an accommodation as being unreasonable, the burden must be “undue,” based on the financial resources, the benefits to the requestor, and the availability of cheaper, easier alternatives that would effectively meet the requestor’s needs. Thus, for example, you don’t have to create extra parking spaces or enlarge your parking lot just to accommodate a single tenant.  

Phil Querin Q and A - Space Erosion - What is the Landlord's Responsibility?

Phil Querin

Answer: This may be a habitability issue which you will have to address. Here is what the statute says about the landlord's habitability duties in a manufactured housing park:

90.730 (Landlord duty to maintain rented space, vacant spaces and common areas in habitable condition.) provides:

(2) A landlord who rents a space for a manufactured dwelling or floating home shall at all times during the tenancy maintain the rented space, vacant spaces in the facility and the facility common areas in a habitable condition. The landlord does not have a duty to maintain a dwelling or home. A landlord's habitability duty under this section includes only the matters described in subsections (3) to (5) of this section.

(3) For purposes of this section, a rented space is considered uninhabitable if it substantially lacks:

(e) At the time of commencement of the rental agreement, buildings, grounds and appurtenances that are kept in every part safe for normal and reasonably foreseeable uses, clean, sanitary and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin;" (Underscore mine.)

This would seem to suggest that from a habitability standpoint, as long as the space was in good shape at the commencement of the tenancy, you no longer have any further duty to the resident. I think that conclusion would be a mistake.

Here, the condition of the space has deteriorated due to the proximity of the stream. Inasmuch as you own the ground, and the ground is failing, I would suggest that relocating the home is your responsibility. Alternatively, if the stream is on a part of the park property, you may want to explore stabilizing the lateral support of the side of the stream.

Look at it this way: If you do nothing, and the subsidence continues to the point of damaging the tenant's home, he or she will have a damage claim against the park. If you relocate the home or properly fix the stream bank, further risk of damage is greatly reduced if not eliminated.

If you do pay to relocate the home, make sure that you have a professional address the issue of any further erosion from the stream. You don't want to have to address this problem again a few years down the road.