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Answer.   The land is owned by the landlord, not the tenant. While the landlord has certain responsibilities regarding the ground,[1] most of these duties apply at the time in installation of the home.

However, ORS 90.730(3)(g) provides:

(g) Excluding the normal settling of land, a surface or ground capable of supporting a manufactured dwelling approved under applicable law at the time of installation and maintained to support a dwelling in a safe manner so that it is suitable for occupancy. A landlord’s duty to maintain the surface or ground arises when the landlord knows or should know of a condition regarding the surface or ground that makes the dwelling unsafe to occupy;

In this case, I don’t believe the landlord has a duty to backfill the eroded area costing thousands of dollars, but certainly should want to get the tenant relocated as soon as possible. If the home is not habitable due to the dangerous condition of the ground, I believe the tenant should be relocated immediately. If there is danger to the home and tenant, he/she should vacate, and resume occupancy only after the home has been relocated.  In the meantime, I would not recommend accepting rent for a space that is dangerous or not habitable.

If the home is damaged, that is the tenant’s responsibility to repair – hopefully he/she has casualty insurance.

In terms of timing, much depends on the severity of the erosion. As for the cost of the move, that is a good question. The statutes don’t address. I believe it could be covered by the tenant’s insurance company, if there is insurance.  If not, and the tenant cannot afford the move, something has to happen. The landlord’s insurance company may provide coverage, since it was a storm-caused event and affected the park’s property. For example, if the storm cause a tree limb to fall on a tenant’s home, the park’s carrier would likely have to pay. It is not much different with water damage endangering part of the park occupied by tenants. Both water and trees causing storm damage are Acts of God, and this is exactly what liability insurance is for. 

If there is no insurance coverage, I would suggest the cost be borne 50-50 between landlord and tenant, since both need the problem to be resolved, and the current statutes do not provide a clear answer. I suppose if the tenant refused – arguing that the space was created by the landlord, and must assume the risk of erosion along the waterfront – it might end up that the landlord should pay, just to avoid litigation.

If the tenant abandons the home, the landlord would proceed under ORS 90.675. However, absent a written letter from the tenant that they are abandoning the home, I always recommend that it be preceded by a 72-hour notice, because then the 45-day letter can be sent 7 days following entry of an order of restitution, and the landlord does not have to make any assumptions about the tenant’s state of mind.

One note of caution: Before issuing a 72-hour notice in this case, the landlord must relocate the home, since it would be risky to demand payment just because the tenant left a dangerous home.

[1]   90.730 Landlord duty to maintain rented space, vacant spaces and common areas in habitable condition. (1) As used in this section, “facility common areas” means all areas under control of the landlord and held out for the general use of tenants.

      (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 (6) of this section.

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

      (a) A sewage disposal system and a connection to the space approved under applicable law at the time of installation and maintained in good working order to the extent that the sewage disposal system can be controlled by the landlord;

      (b) If required by applicable law, a drainage system reasonably capable of disposing of storm water, ground water and subsurface water, approved under applicable law at the time of installation and maintained in good working order;

      (c) A water supply and a connection to the space approved under applicable law at the time of installation and maintained so as to provide safe drinking water and to be in good working order to the extent that the water supply system can be controlled by the landlord;

      (d) An electrical supply and a connection to the space approved under applicable law at the time of installation and maintained in good working order to the extent that the electrical supply system can be controlled by the landlord;

      (e) A natural gas or propane gas supply and a connection to the space approved under applicable law at the time of installation and maintained in good working order to the extent that the gas supply system can be controlled by the landlord, if the utility service is provided within the facility pursuant to the rental agreement;

      (f) 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;

      (g) Excluding the normal settling of land, a surface or ground capable of supporting a manufactured dwelling approved under applicable law at the time of installation and maintained to support a dwelling in a safe manner so that it is suitable for occupancy. A landlord’s duty to maintain the surface or ground arises when the landlord knows or should know of a condition regarding the surface or ground that makes the dwelling unsafe to occupy; and

      (h) Completion of any landlord-provided space improvements, including but not limited to installation of carports, garages, driveways and sidewalks, approved under applicable law at the time of installation.

      (4) A rented space is considered unhabitable if the landlord does not maintain a hazard tree as required by ORS 90.727.

      (5) A vacant space in a facility is considered unhabitable if the space substantially lacks safety from the hazards of fire or injury.

      (6) A facility common area is considered unhabitable if it substantially lacks:

      (a) 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;

      (b) Safety from the hazards of fire;

      (c) Trees, shrubbery and grass maintained in a safe manner;

      (d) If supplied or required to be supplied by the landlord to a common area, a water supply system, sewage disposal system or system for disposing of storm water, ground water and subsurface water approved under applicable law at the time of installation and maintained in good working order to the extent that the system can be controlled by the landlord; and

      (e) Except as otherwise provided by local ordinance or by written agreement between the landlord and the tenant, an adequate number of appropriate receptacles for garbage and rubbish in clean condition and good repair at the time of commencement of the rental agreement and for which the landlord shall provide and maintain appropriate serviceable receptacles thereafter and arrange for their removal.

      (7) The landlord and tenant may agree in writing that the tenant is to perform specified repairs, maintenance tasks and minor remodeling only if:

      (a) The agreement of the parties is entered into in good faith and not for the purpose of evading the obligations of the landlord;

      (b) The agreement does not diminish the obligations of the landlord to other tenants on the premises; and

      (c) The terms and conditions of the agreement are clearly and fairly disclosed and adequate consideration for the agreement is specifically stated. [1999 c.676 §6; 2007 c.906 §40; 2011 c.503 §10; 2013 c.443 §2; 2015 c.217 §7]

Answer: This is a good – and important – question. Here are some points to always remember: 1. A resident who is renting the home is not under the manufactured housing section of Oregon’s residential landlord-tenant law (“ORLTA”) which is contained in ORS Chapter 90. This means that you do not treat non-owner residents the same way you would as if they were renting an apartment or home. Landlord and tenant rights, duties and remedies are different, depending upon whether the person renting the space also owns the home. 2. A landlord’s remedies [e.g. for-cause termination, etc.] against a non-owner resident are found in ORS 90.392, 90.394, 90.396, 90.398, 90.403 and 90.405; they are not found in the manufactured housing section of ORLTA, which commences at ORS 90.505. 3. Similarly, you do not want to use a standard manufactured dwelling space rental agreement for a non-owner resident. However, due to the number of park-owned homes, MHCO has developed a space rental agreement for tenants who do not own the home. You should use it. If you use MHCO’s standard manufactured home space rental agreement for persons owning their home, you will be contractually giving the non-owner resident greater rights than you would otherwise need to do. For example, the “cure period” for violations is much shorter for non-owner tenants – because they only need to vacate with their personal property. They do not need to move a home. If they owned the home, they would have a 30-day right to cure under ORS 90.630. This means that you will have to use a different, non-MHCO form for rules violations by non-owner tenants. 4. However, the eviction process, i.e. the filing and service of an FED Complaint under ORS 105.105, et. seq, is the same. That is, the process of the “first appearance,” trial settings, etc. is exactly the same. 5. Importantly, since the park owns the home, the park is the “landlord.” This means that it must provide inside the home certain safety measures that ORLTA requires of landlords, such as smoke detectors and [if there is a carbon monoxide source] a carbon monoxide detector. Some counties require a carbon monoxide detector in all cases, even if there is no carbon monoxide source, e.g. a gas fireplace. Go to the State Fire Marshall’s site for more information on these important issues.

Supply and Demand

The primary drivers of this sales activity are the usual suspects: supply and demand. In the past couple decades, the cost to develop new manufactured home communities in Oregon (and most of the U.S.) has risen to the point that it is impossible to generate a compelling financial return with a newly constructed park. Add to that the number of parks that are closed, or redeveloped to other uses, and it's clear that we operate in a market with a very restricted current supply - and no future new supply.

Meanwhile, demand for parks is climbing.

According to United Van Lines, Oregon is the most-moved-to destination in the United States for the past two years. If you are buying or selling real estate in Oregon, you likely already know this! People really want to live here.

The Multifamily NW Apartment Report released this spring shows falling vacancy rates in every Oregon/SE Washington market it surveys. Vacancy in Portland/Vancouver, Salem, and Eugene averages just under 3%. Bend is seeing 1.5% vacancy rate... and dropping!

Another recent factor driving demand is the influence of Wall Street and investment fund managers. In 2003, Berkshire Hathaway purchased Clayton Homes and inserted its influence in a big way; designing, building, selling, and financing manufactured homes. This single event began to alter the perception of investing in manufactured home communities.

Fast forward to now: the largest private equity group in the U.S. -- the Carlyle Group - is investing in mobile home parks; Sam Zell, the billionaire American business magnate, is the largest owner of mobile home parks in this country; and Clayton is still crushing it as the largest source of new modular and manufactured homes in the nation.

We've seen out-of-state interest surge right here in our market: At Western Equities, we've closed on $11,000,000 of mobile home park sales in the past year - with just one of our buyers! This buyer is a private equity fund manager, and he has another $10,000,000 committed in offers or pending sales with us. High-power investors like this have, collectively, a tangible effect the mobile home park sales market.

Effect on the Market

Not surprisingly, the limited supply and growing demand for parks has pushed sale prices up, and Cap Rates down. Prices up, and Cap Rates down? That's a seller's market!

"Cap Rate" is short for Capitalization Rate, which is the rate of return if an investor were to pay cash for the purchase price. Cap Rate is the most important initial indicator of the return on investment a property will produce. The formula to determine Cap Rate of a property is Net Operating Income (NOI) divided by Purchase Price.

Cap Rates vary widely with the unique nature of mobile home parks - and reliable cap rate data is available for only about half of the parks sold on the market. Investors and brokers in today's market are seeing steady cap rate compression in a majority of Oregon markets. For healthy parks in strong locations, the Cap Rate range in 2010 was typically between 7-8 _ %. Today, those parks tend to sell at 6 to 7% Cap Rate, or even lower.

One recent sale really affects the 2015 YTD Oregon Cap Rate and price per space averages: Songbrook, a 140-space, award-winning manufactured home community sold on June 10th for $13,800,000 - a stunning $98,571 per space, and a 5.0% Cap Rate! Songbrook was developed and sold by Troy Brost, a noted industry expert who has been a past board member and president of MHCO.

Large parks tend to be well-capitalized, in larger towns or cities, with very low vacancy, less collection loss, fewer deferred maintenance issues, and a significant management operation. Essentially, there is lower investor risk, so the returns are smaller.

Nationally, big funds managers and institutional investors are looking to 'park' multiple millions of dollars, and because of low returns in other investment options, that money is increasingly used to invest in manufactured home communities. Even private investors are rolling large into Oregon parks - i.e., the reported buyer of Songbrook. This demand is significant in driving prices up, and pushing returns down.

The value of smaller parks is increasing as well. Currently in Oregon, there are about 15 smaller (less than 100 spaces) parks listed for sale, with Cap Rates that are advertised between 6-12%. This wide range indicates the diverse nature of smaller parks, which are often very different from each other.

Price Per Space is another interesting indicator when looking at property values, but there is such huge discrepancy when comparing parks - especially smaller ones - that Price Per Space is generally a secondary calculation. Currently, there is an RV park on the market at $6,000 per space, compared with nearly $100,000 per space in the Songbrook sale.

Both of these are extreme examples; a more 'typical' Price Per Space range is $30-60k, and is influenced by many factors singular to that property.

Pricing your park correctly is critical to selling promptly. There are several parks on the market that have been available for multiple years - clearly priced incorrectly for their market.

Consult an experienced park broker. It's our job to know the many parks and markets that exist, and to personally know many of the sellers, buyers, brokers, lenders, vendors, and other industry people that collectively affect the value of Oregon parks. There is a ton of activity right now, and not all of it is apparent to investors without deep connections in the mobile home park industry. There are a lot of interesting and very relevant histories out there that inform our opinion and strategy when selling parks!

Keep an eye out for my next article: "Buying and Selling MH Parks in a Hot Market".

Ty Downing is a licensed real estate broker at Western Equities, and a mobile home park investor. Ty and principal broker Randy Smith own a combined total of nearly 400 spaces in 8 parks, and specialize in mobile home park sales across the western United States. Contact Ty at 503-653-3887.

Ty Downing
Associate Broker

W
Western Equities

Multifamily and Mobile Home Park Investing
3215 SE Raymond St.
Portland, OR 97202

Tel: 503-242-0033
Fax: 503-281-4054
Cell: 503-653-3887

tydowning@westernequities.com

By Dianne Lugo

Salem Statesman Journal - February 11, 2025

• The bill that would cap rent increases for manufactured home parks and marinas to the annual inflation rate.
• Proponents of the bill say it would protect residents, many of whom are on fixed incomes, from exorbitant rent increases.
• Opponents, including park owners, argue the bill would lead to closures and sales to large corporations, exacerbating the housing crisis.

Supporters of proposed legislation that would limit rent increases in manufactured home parks and marinas say it would protect existing affordable housing, but opponents fear the bill would force the closure of smaller parks or selling to large conglomerates.

House Bill 3054 would cap allowable rent increases for tenants in manufactured home parks and marinas to annual inflation rates.

"It addresses an alarming trend that we are seeing in manufactured housing communities across our state which is the skyrocketing costs for tenants" who predominantly are on fixed incomes and relying on Social Security, said House Majority Leader Rep. Ben Bowman, D-Tigard.

Multifamily NW, an association of members managing nearly 300,000 units, also wrote testimony opposing the bill, saying rent control poliies have created uncertainty in the state.

"We all know that Oregon is facing a severe housing shortage, and it is abundantly clear that our approach to this issue is not working," wrote Zach Lindahl with Multifamily NW. "Our focus should be on policies that encourage investment and increase supply, not those that further constrain the market."

What Oregon House Bill 3054 would do

HB 3054 would impact a specific subsection of tenants: owners of manufactured homes who rent the land within a park or marina. If a person rents a home within a park, the law won’t apply. Recreational vehicles, apartments or mobile homes outside parks or marinas would not be covered by the law.

“We’re trying to provide a little more transparency, predictability around what the costs of staying in that park will be for people,” said Rep. Pam Marsh, D-Ashland, a chief sponsor of the bill and chair of the House Committee on Housing and Homelessness.

According to testimony from the Oregon Law Center during a packed public hearing on Feb. 3, there are about 1,000 mobile home parks representing 62,000 spaces in the state. There are many of those parks in Marsh’s district in southern Jackson County.

The bill also removes some of what landlords can require before the sale of a manufactured home at parks or marinas. Rental increases for this subsection of tenants would be capped at the Consumer Price Index, a measure of inflation. The CPI calculation in 2024 was 3.2%, according to Oregon's Office of Economic Analysis.

Landlords would be unable to raise rent above 10% of what a selling tenant was paying if they sold a manufactured home that would remain in a rented space.

The bill would prohibit landlords from requiring that a selling tenant, prospective buyer, or buyer agree to an inspection of the inside of a home as a condition to approve the sale or new tenancy. HB 3054 also would bar landlords from requiring aesthetic or cosmetic improvements from prospective tenants.

Supporters cite fear, affordability in Oregon

Nearly 250 pieces of written testimony were submitted in support of the bill.

Bowman said he and other lawmakers hosted a constituent event at a mobile home park in his district that more than 100 people attended. The theme that became impossible to miss, he said, was that the status quo is not sustainable.

"These folks are facing egregious hikes to their rent year over year and it is pushing them to the brink," Bowman said. He said tenants in the mobile home park saw an 8.9% rent increase in 2022, a 10.3% increase in 2023, an 8.7% increase in 2024 and face a 9% increase this year.

The Oregon State Tenants Association submitted a report with a survey of nearly 500 tenants. According to the report, the average annual rent increase was nearly 7%. Average rent prices are projected to surpass Social Security benefits by 75% within 10 years and 100% within 15 years, wrote Rochelle Love Elder, vice president of the Oregon State Tenants Association.

Many of the tenants who would be impacted were too afraid of retaliation to submit testimony or even take a flyer, Elder told lawmakers. Most residents currently pay $865 a month in lot rent. Scheduled rent increases in 2025 will bring most residents' lot rent to $951, she said.

"A lot of them are feeling like cash cows," Elder said.

Elder described the bill as a solution to keep 62,000 people in their homes.

Opponents say bill would force closures, sale of manufactured home parks

Opponents of HB3054 said the bill would do the opposite of what it intends, forcing the closure of smaller parks or sales to large conglomerates. Nearly 100 pieces of submitted testimony opposed the bill.

"It is an extreme proposal that hits owners with a one-two punch," said Bill Miner, a lawyer representing Manufactured Housing Communities of Oregon.

The organization represents 750 manufactured homes and marina facilities with 42,000 spaces. According to Miner, the bill relies on faulty assumptions.

"This bill is a solution in search of a problem," he told the Statesman Journal.

A survey from 100 of their owners found the average annual rent increase from 2019 and 2024 was 5.39%. Miner told lawmakers that in the last month, he had received five calls from landlords representing more than 5,000 spaces about the process of closing their parks should the current bill pass.

Miner described the proposal as "an industry killing type of bill."

Such shifts in the American population will bring significant changes to America - from the way products and services are developed and marketed to this expanding audience to the types of homes people will choose to purchase - including where these homes are located. When baby boomers choose to relocate/downsize from their existing "McMansion" homes, they will have a wider variety of housing options to choose from than today's senior home owners. Manufactured home builders and land"lease manufactured home communities will find themselves in an increasingly competitive housing marketplace where innovation and creativity are essential to success.

Housing Realities and Impacts

Forty"six percent of all households in America are headed by baby boomers (45"64 years old). If you add in those already aged 65 years or older, the number of these senior households grows to 60 percent. According to METLIFE Insurance Company, a large percentage of these heads of households will be grandparents. Due to economic necessity, many grandparents will be financially supporting their children and grandchildren, including having their children and grandchildren live with them. At the other extreme, 20 percent of these seniors will be living alone (this jumps to 38 percent of seniors over the age of 75). Because their children delayed having children until later in life, more of these seniors living alone also will have grandchildren who visit frequently.

Approximately 35 percent of Americans over the age of 65 rely almost entirely on Social Security payments for income, with the average Social Security benefit for a retired worker in 2011 about $1,177.00 per month. The Council on Aging estimates that while many aging Americans perceive their health as excellent or good, the reality is that most older adults have at least one chronic condition and many have multiple conditions. Older Americans spend approximately 13 percent of their total expenditures on health - more than twice the proportion spent by all consumers.

So what do these demographic changes mean for an owner of a land"lease manufactured home community? According to the U.S. Census Bureau's 2010 report, manufactured home community owners should expect the following housing impacts: expect people to double up or share their homes by renting rooms; they will have less income available to deal with higher utility bills and the need to financially support their extended families; and more home"bound residents will not have the option or won't be able to afford other living arrangements.

The impacts and challenges continue. Are 55+ communities realistic considering the need to allow extended or non" traditional families in manufactured home communities? Does offering homes for rent in these communities make economic sense? Should communities build playgrounds (maybe with adult exercise equipment) as a way of making them more family"friendly? Should people be allowed to rent rooms in their homes? Can duplex manufactured homes be developed to replace older homes in communities? Are manufactured homes able to accommodate residents who want to "age in place" in their homes? What kind of "assisted living" rental income homes with "age"in"place" technologies will keep residents in their communities longer?

Innovative Approaches and Solutions

The Newport Pacific Family of Companies is a manufactured home community, marina and apartment property management firm, managing properties and home owner associations in five states stretching across the country. Its full"service property management strategies have one goal: to create successful communities and increase their value for owners and residents alike. It has been a pioneer in addressing many of the issues created by an aging population within manufactured home communities.

Mike Sullivan, CEO and principal of Newport Pacific Capital and President of Cirus Development, is a certified property manager, a California General Contractor and a manufactured home retailer. As former President of the Board of Directors of the Western Mobilehome Park Owners Association (WMA) and President of the Santa Clara County Manufactured Housing Education Trust, Sullivan has an extensive understanding and appreciation of the challenges facing land" lease community owners.

Sullivan explains that land"lease community owners face an increasing problem as community residents get older. "One of my communities was facing the situation where it lost 10 residents in one month, 18 percent of its residents in one quarter, and the children of the deceased residents had stopped paying space rent," Sullivan noted. "We had to be creative in order to stem the problems this community faced." Another fact he uncovered in his research was that their original 55+ aged residents (now 75 to 85 years old and older) were being marketed to heavily by the local assisted"living companies surrounding their communities. "We had become the feeder lot for these organizations," said Sullivan.

Newport Pacific created a subsidiary, Lifestyle Services, Inc., to develop solutions that could address the many issues being raised by an aging resident population. Its Lifestyle Services Concierge Service helps seniors stay in their homes longer by helping them retain their independence as long as possible. The service assists residents with tasks that they can't easily do - or at all - any more. Additionally, the service offers family members who can't be with their aging loved ones as often as they would like the peace of mind of knowing that they are being well"cared"for. Services include housekeeping and yard maintenance, running errands and handyman services, and modified house sitting services.

Another approach has been the development of technologies such as the "Close"By" Network that provides in"home monitoring and reporting of behavioral patterns like eating, sleeping and medication use directly to the doctors of the aging residents. The service also allows routine medical tests, such as blood pressure, to be performed directly in the resident's home, enabling doctors to monitor the procedures and results via direct video links. "It's a virtual doctor's office," said Sullivan. The service can even be expanded to offer in"community services in a community's clubhouse.

Next Steps Forward

One of the company's more innovative approaches has been the development of its Net Zero model home and electric car. Newport Pacific's sister companies, Modular Lifestyles and Cirus Development, began developing and building "Net Zero Green" homes in 2008 for a new 62+ community, Oak Haven, located in Ojai, CA. The new modular homes incorporated maximum energy"efficiency technologies that operate at or near "Net Zero" energy use. The home has a home energy rating system at the factory that is 21 percent better than standard"built homes. The homes are 90 percent constructed in the factory, with minimal waste and the onsite work requiring only two 8x8x8 dumpsters.

The first model of this new generation of homes was placed in the community in 2008 and proved to be quite successful. The community began filling up with these innovative homes within two years, and won the 2011 MHI "Homes Under 1800 Square Foot" award category with Cavco Industries.

When Florence Roach's Santa Barbara condominium sold the first day on the market, she knew that her decision to move was a good one. Considering her future retirement, Florence had wanted a less expensive place to live and maintain. With her daughter living in Ojai, Florence checked out Oak Haven's advertising claims of "low cost" living with "green" solar"powered, energy"efficient modular homes. Florence was sold on the Ojai Valley and purchased one of Modular Lifestyle's homes.

Before coming to Ojai, Florence had experienced respiratory problems that could come on without notice along with allergies and osteoarthritis. Since moving into her new home, she has had unexpected health improvements which she attributes to the dry heat and the less toxic interior environment of her new home. The whole"house fan in the new home continuously replaces the home's interior air with filtered air.

The homes include extra ceiling, wall and floor insulation that keeps their interior temperature moderate, with Florence's electric and gas bills at or near zero every month, even during her first hot summer in Ojai. These are the kinds of operating costs she can afford for the future. In fact, from July 2011 to July 2012 she has a cumulative negative $19.50 credit on her electric bill.

The company then turned its focus to developing and building its "Quest" home. These solar"powered, energy" efficient modular homes also include other energy"saving features such as tankless water heaters and propane"powered generators so that the homes are virtually independent of outside electrical service. Due to the high number of 30" and 50"amp "mobile home parks," this home solves the overall issue of aging infrastructure.

New Thinking

Senior communities, such as Oak Haven, are proving that land"lease communities are well"positioned for the upcoming Baby Boomer population explosion and have a unique opportunity unlike any other multi"family housing project. They have existing facilities that can be upgraded to incorporate services and products that more directly appeal to seniors. But to be successful, land"lease communities must embrace the changing housing marketplace with creative thinking and innovation. By doing so, land"lease communities can compete with and be attractive alternatives to the newly" built senior apartments and assisted"living developments. The reality of the generational changes taking place in the housing marketplace requires new thinking and new approaches...all at a very accelerated pace of just a few short years.

Such shifts in the American population will bring significant changes to America - from the way products and services are developed and marketed to this expanding audience to the types of homes people will choose to purchase - including where these homes are located. When baby boomers choose to relocate/downsize from their existing "McMansion" homes, they will have a wider variety of housing options to choose from than today's senior home owners. Manufactured home builders and land"lease manufactured home communities will find themselves in an increasingly competitive housing marketplace where innovation and creativity are essential to success.

Housing Realities and Impacts

Forty"six percent of all households in America are headed by baby boomers (45"64 years old). If you add in those already aged 65 years or older, the number of these senior households grows to 60 percent. According to METLIFE Insurance Company, a large percentage of these heads of households will be grandparents. Due to economic necessity, many grandparents will be financially supporting their children and grandchildren, including having their children and grandchildren live with them. At the other extreme, 20 percent of these seniors will be living alone (this jumps to 38 percent of seniors over the age of 75). Because their children delayed having children until later in life, more of these seniors living alone also will have grandchildren who visit frequently.

Approximately 35 percent of Americans over the age of 65 rely almost entirely on Social Security payments for income, with the average Social Security benefit for a retired worker in 2011 about $1,177.00 per month. The Council on Aging estimates that while many aging Americans perceive their health as excellent or good, the reality is that most older adults have at least one chronic condition and many have multiple conditions. Older Americans spend approximately 13 percent of their total expenditures on health - more than twice the proportion spent by all consumers.

So what do these demographic changes mean for an owner of a land"lease manufactured home community? According to the U.S. Census Bureau's 2010 report, manufactured home community owners should expect the following housing impacts: expect people to double up or share their homes by renting rooms; they will have less income available to deal with higher utility bills and the need to financially support their extended families; and more home"bound residents will not have the option or won't be able to afford other living arrangements.

The impacts and challenges continue. Are 55+ communities realistic considering the need to allow extended or non" traditional families in manufactured home communities? Does offering homes for rent in these communities make economic sense? Should communities build playgrounds (maybe with adult exercise equipment) as a way of making them more family"friendly? Should people be allowed to rent rooms in their homes? Can duplex manufactured homes be developed to replace older homes in communities? Are manufactured homes able to accommodate residents who want to "age in place" in their homes? What kind of "assisted living" rental income homes with "age"in"place" technologies will keep residents in their communities longer?

Innovative Approaches and Solutions

The Newport Pacific Family of Companies is a manufactured home community, marina and apartment property management firm, managing properties and home owner associations in five states stretching across the country. Its full"service property management strategies have one goal: to create successful communities and increase their value for owners and residents alike. It has been a pioneer in addressing many of the issues created by an aging population within manufactured home communities.

Mike Sullivan, CEO and principal of Newport Pacific Capital and President of Cirus Development, is a certified property manager, a California General Contractor and a manufactured home retailer. As former President of the Board of Directors of the Western Mobilehome Park Owners Association (WMA) and President of the Santa Clara County Manufactured Housing Education Trust, Sullivan has an extensive understanding and appreciation of the challenges facing land" lease community owners.

Sullivan explains that land"lease community owners face an increasing problem as community residents get older. "One of my communities was facing the situation where it lost 10 residents in one month, 18 percent of its residents in one quarter, and the children of the deceased residents had stopped paying space rent," Sullivan noted. "We had to be creative in order to stem the problems this community faced." Another fact he uncovered in his research was that their original 55+ aged residents (now 75 to 85 years old and older) were being marketed to heavily by the local assisted"living companies surrounding their communities. "We had become the feeder lot for these organizations," said Sullivan.

Newport Pacific created a subsidiary, Lifestyle Services, Inc., to develop solutions that could address the many issues being raised by an aging resident population. Its Lifestyle Services Concierge Service helps seniors stay in their homes longer by helping them retain their independence as long as possible. The service assists residents with tasks that they can't easily do - or at all - any more. Additionally, the service offers family members who can't be with their aging loved ones as often as they would like the peace of mind of knowing that they are being well"cared"for. Services include housekeeping and yard maintenance, running errands and handyman services, and modified house sitting services.

Another approach has been the development of technologies such as the "Close"By" Network that provides in"home monitoring and reporting of behavioral patterns like eating, sleeping and medication use directly to the doctors of the aging residents. The service also allows routine medical tests, such as blood pressure, to be performed directly in the resident's home, enabling doctors to monitor the procedures and results via direct video links. "It's a virtual doctor's office," said Sullivan. The service can even be expanded to offer in"community services in a community's clubhouse.

Next Steps Forward

One of the company's more innovative approaches has been the development of its Net Zero model home and electric car. Newport Pacific's sister companies, Modular Lifestyles and Cirus Development, began developing and building "Net Zero Green" homes in 2008 for a new 62+ community, Oak Haven, located in Ojai, CA. The new modular homes incorporated maximum energy"efficiency technologies that operate at or near "Net Zero" energy use. The home has a home energy rating system at the factory that is 21 percent better than standard"built homes. The homes are 90 percent constructed in the factory, with minimal waste and the onsite work requiring only two 8x8x8 dumpsters.

The first model of this new generation of homes was placed in the community in 2008 and proved to be quite successful. The community began filling up with these innovative homes within two years, and won the 2011 MHI "Homes Under 1800 Square Foot" award category with Cavco Industries.

When Florence Roach's Santa Barbara condominium sold the first day on the market, she knew that her decision to move was a good one. Considering her future retirement, Florence had wanted a less expensive place to live and maintain. With her daughter living in Ojai, Florence checked out Oak Haven's advertising claims of "low cost" living with "green" solar"powered, energy"efficient modular homes. Florence was sold on the Ojai Valley and purchased one of Modular Lifestyle's homes.

Before coming to Ojai, Florence had experienced respiratory problems that could come on without notice along with allergies and osteoarthritis. Since moving into her new home, she has had unexpected health improvements which she attributes to the dry heat and the less toxic interior environment of her new home. The whole"house fan in the new home continuously replaces the home's interior air with filtered air.

The homes include extra ceiling, wall and floor insulation that keeps their interior temperature moderate, with Florence's electric and gas bills at or near zero every month, even during her first hot summer in Ojai. These are the kinds of operating costs she can afford for the future. In fact, from July 2011 to July 2012 she has a cumulative negative $19.50 credit on her electric bill.

The company then turned its focus to developing and building its "Quest" home. These solar"powered, energy" efficient modular homes also include other energy"saving features such as tankless water heaters and propane"powered generators so that the homes are virtually independent of outside electrical service. Due to the high number of 30" and 50"amp "mobile home parks," this home solves the overall issue of aging infrastructure.

New Thinking

Senior communities, such as Oak Haven, are proving that land"lease communities are well"positioned for the upcoming Baby Boomer population explosion and have a unique opportunity unlike any other multi"family housing project. They have existing facilities that can be upgraded to incorporate services and products that more directly appeal to seniors. But to be successful, land"lease communities must embrace the changing housing marketplace with creative thinking and innovation. By doing so, land"lease communities can compete with and be attractive alternatives to the newly" built senior apartments and assisted"living developments. The reality of the generational changes taking place in the housing marketplace requires new thinking and new approaches...all at a very accelerated pace of just a few short years.

Mobile and manufactured homes are personal property. They are only treated as a part of the land (i.e., as “real property”) when properly sited on a lot or parcel owned by the owner of the home and approved by the local authorities. Then, a deed to the land conveys the manufactured home as well, since they are combined under a single ownership.

Since the land in a manufactured housing community is owned by the landlord, and the spaces are rented to tenants, all manufactured structures on the spaces are personal property. They are either own by the tenant occupying the space, or by the park, or other third party.

The Conundrum. If all manufactured homes in a community are personal property, when abandonment occurs, why are there two forms? The answer is basic – at least to start. It depends on who owns the home.

• Using Form No. 30. If the home is tenant-owned and the tenant abandons it, park owners and managers should use MHCO Form No. 30.[1]

• Using Form No. 30A. If the home is not tenant owned, e.g., park-owned, management only needs to declare an abandonment of the other personal property on the space, such as the contents of the home, cars, RVs, and other personal property on the space itself.[2]

• The RV exception. Since RVs are personal property, which form should be used when the tenant owns it but later abandons it on the space? The answer is to use MHCO Form No. 30A.

FAQs for Personal Property Abandonments under Form 30A.[3]

How long does the tenant have to respond to the notice of abandonment? 5 days if served personally, or 8 days if served by mail. This applies to all abandoned personal property except recreational vehicles. For an RV, the tenant has 45 days to respond.

How long after responding does the tenant have to make arrangements for removal of the personal property? 15 days. If it is a recreational vehicle, 30 days.

What must I do with personal property during the abandonment process? Abandoned personal property should be kept in a place of safekeeping, and management should exercise reasonable care in protecting it. Food or perishables may be disposed of, and any abandoned animals or livestock should be turned over to the proper authorities. Landlords are entitled to reasonable or actual storage costs, costs related to moving the items, and potentially, costs related to disposal.  Abandoned personal property may be stored as management sees fit, whether that is at the dwelling, at another location on the premises, or in an off-site storage unit.

What if the owner does not claim their personal property within the required time? If an owner or interested party does not respond to MHCO Form 30A within the appropriate window (5-8 days for personal property/45 days for recreational vehicles) the landlord is free to sell or dispose of it in accordance with the directions in Form 30A or ORS 90.425.

[1] Note: ORS 90.675 deals with abandonment of manufactured homes owned by the tenant. ORS 90.425 deals with automobiles, RVs, and all other tenant owned personal property. However, ORS 90.675(1)(e) provides that “personal property” does not include goods left inside a manufactured dwelling or floating home or left upon a rented space and subject to disposition under ORS 90.425.” The problem is that oftentimes, when a home is abandoned, other things may be abandoned as well, such as the contents of a home and personal property on the space. Thus, where the contents of the home have value over $1000, it may become necessary to use both forms. Where autos and RVs are left on the space members should definitely use both forms. MHCO is considering adding an addendum to Form 30 to combine these issues into a single form. Until then, using both forms is appropriate where the tenant abandoned both the home and significant items of personal property such as autos, motorcycles, and RVs.

[2] If the home is owned by a third party who is renting the home to a tenant who abandons it, management should immediately notify the owner-landlord. Space rent must be paid regardless of the tenant’s abandonment. If the owner-landlord does not respond after giving proper notice, file an eviction for nonpayment of rent. If the owner does not show up for court, get a judgment of restitution and then file an abandonment of the home, which is permitted under ORS 90.675. Death of a tenant owner of the home also triggers the abandonment process under that statute.

[3] Caveat: This is a summary only and does not address rights of lienholders,  tax collectors, assessors, or third-party owners. Before using this form, competent legal counsel should be consulted if questions.

Answer: Under ORS 90.675(20), death of a resident living alone triggers the abandonment procotols.

1. First you need to determine if there is a personal representative ("PR") named in a will or appointed by a court to act for the deceased tenant. If not, is there a person designated in writing by the tenant to be contacted in the event of their death. (Of course, the best practice is to have this information, in advance, for all residents living alone.)
2. If you do not have any contact information, you may have to do some research, which means checking the decedent's rental application, or checking with neighbors. My experience is that when an older person passes away, relatives and others come out of the woodwork. Eventually you will need to identify some person who is willing to assume responsibility for the decedent's property.
3. There is such a thing as a Small Estate Probate, and most counties have the available forms. That would be the best approach for the responsible person to go through.
4. However, note that as a landlord/manager, your job is to get the space re-rented, either by a sale of the home to an approved resident, or removal of the home and re-siting of another.
5. The 45-day abandonment letter must be sent by first class mail to the deceased tenant at the premises, and personally delivered or sent by first class mail to the PR or designated person, if actually known to you. (Note: The 45-day letter must refer to the personal representative or designated person, instead of the deceased tenant.)
6. If the PR or designated person, or other person entitled to possession of the property, such as an heir, responds to you by actual notice (E.g. verbal contact, phone call, email, fax, etc.) within the 45-day period set forth in the 45-day letter, and requests to enter into a written Storage Agreement, you must do so.
7. The written Storage Agreement should provide that the home and personal property may not be sold or disposed of for up to 90 days, or until the conclusion of any probate proceedings, whichever is later.
8. The written Storage Agreement entitles the PR or designated person to store the personal property on the space during the term of the agreement, but does not entitle anyone to occupy the home. You should secure it, even if it means changing the current locks. You duty commences the moment you send the 45-day letter.
9. If a written Storage Agreement is signed by yourself and the responsible party, you may not enter into another such agreement with the lienholder until the signed until the agreement with the personal representative or designated person ends.
10. During the term of the Storage Agreement, the PR or designated person has the right to remove or sell the home and personal property (including a sale to a purchaser, or a transfer to an heir who wishes to leave it on the rented space and become a tenant - subject to the approval of background information that you have as a landlord or manager under ORS 90.680).
11. You may condition approval for occupancy of any purchaser or heir upon payment of all unpaid storage charges and maintenance costs.
12. If the PR or designated person violates the signed Storage Agreement, you may terminate it by giving at least 30 days written notice stating facts sufficient to notify him/her of the reason for the termination. Unless the PR or designated person corrects the violation within the 30-day period, the Storage Agreement will be terminated, and you may sell or dispose of the home and property without further notice to them.
13. Upon the failure of a PR or designated person to enter into a written Storage Agreement, or upon termination of the Storage Agreement, you may sell or dispose of the property pursuant to the statute (ORS 90.675) without further notice to them (unless the parties otherwise agree, or the PR or designated has already sold or removed the property).

Answer: At the risk of dating myself, I represented MHCO many moons ago when Oregon’s abandonment law was first being negotiated. One of the other representatives, John VanLandingham, did an excellent job not only on behalf of the tenant coalition, but also in riding herd over the group and drafting the text which ultimately was enacted into law.

There were at least four industry groups at the table representing the following interests[2]: (a) Tenants; (b) MH Lenders; (c) Landlords; and (d) Personal property tax assessors. Because of the size of the stakeholders, and their disparate interests, the result, ORS 90.675 and ORS 90.425,[3] are lengthy and complicated statutes – akin to reading War and Peace.

Background.

Before answering the above question, we must first address some basic concepts:[4]

1. When a tenant or tenants abandon the home, it must be clear they are doing so with no intent to return. This is because once the abandonment is legally declared by the landlord, other interests become superior to those of the abandoning tenant(s).

2. Before the abandonment can be declared, a 45-day letter must be issued to certain designated parties. If the abandoning tenant(s) receipt for or learn of the 45-day letter and timely respond, they have certain rights to protect their ownership of the home. If they do not timely respond, the tenant(s)’ interest is declared abandoned. Any known lienholders, including the personal property tax assessor, must also be notified, and given an opportunity to inform the landlord of their interest.

3. Once the abandonment has been legally declared because the tenant(s) did not timely respond, interests of the remaining stakeholders, landlord, lender and personal property tax assessor, come to the fore – and all have to be coordinated going forward. If they do not timely respond their interests are also deemed to be abandoned.

4. If the tax assessment of the home is $8,000 or less the landlord may dispose or sell the home and it will be removed from the community.

5. If the tax assessment is over $8,000, there is a statutory process describing how the home will be advertised for sale and sold to a new tenant who will occupy it or remove it from the community. If the sale proceeds are in excess of the landlord’s costs of the abandonment, recovery of unpaid space rent, and repayment of the lien, if any, the balance must be repaid to the abandoning tenant(s) if they can be located. Otherwise, the proceeds escheat to the state.

6. Lastly, and significantly, the law provides that during this lengthy abandonment process, the landlord must secure and protect them home. This is because after removal of perishables and pets, there could be personal property inside with monetary or sentimental value. Thus, immediately upon issuing the abandonment letter, my advice to most landlords is to immediately secure the home by changing the locks and, if necessary, post No Trespassing signs on it. This is because if the abandoned home is accessed by anyone – even friends and relatives – things can disappear, and a claim could be made against the landlord by the persons who claim ownership or an interest in the personal property. This is not to say the landlord should deny access to everyone, but it must be controlled and supervised.

Death of the Tenant Living Alone.

ORS 90.675(21) and ORS 90.425(20) address what happens when the only tenant, who is the owner of the home, dies.

The relationship of death and abandonment, albeit far different in actuality, result in the same issues, i.e., how to address and protect the interests of the remaining stakeholders, plus, the estate of the decedent.

In my experience, which I am sure does not differ from that of other MHP lawyers and landlords, is that following a tenant’s death, unless the landlord immediately declares the abandonment so he/she can safeguard and prevent uncontrolled access to decedent’s home, there are a parade of horribles that can occur. Battling siblings can – and do – obtain access to the home and “retrieve” what they believe is rightfully theirs; friends and relatives can do the same; and others, e.g., the long-lost friend or relative who had been absent over the years, materializes to access the home and remove items. Lastly, and not uncommonly, is one or more shirttail relatives, friends, or acquaintances, begin living in the home. If the person(s) refuse(s) to leave, the landlord is forced to file for eviction to recover possession and control of the home during the abandonment process.

In some cases, the tenant’s death may necessitate a small estate probate to effectuate the legal transfer of title. In that case, and others, the rightful party, e.g., the .personal representative, must decide whether to hold on to the asset for the estate – which entails paying storage fees for the home. If fees are not paid, the home can become subject to a loss of rights to the estate.

Conclusion. While death of the tenant living alone presents more emotional issues than a voluntary abandonment, the process following both events are very similar – because third parties are left to protect their interests.

Although Oregon’s abandonment law has been amended from time-to-time over the years, it has withstood the test of time. So, while both statutes are voluminous and complicated, they have successfully balanced the disparate interests of all the stakeholders affected by the process. It is a delicate balance, but it does work.

[1] This wording is imprecise. The law correctly addresses events following the death of a tenant when there are not other “tenants” as defined in ORS 90.100 (47).

[2] I say “at least” because within these major groups were various collateral interests represented.

[3] ORS 90.675 deals with homes located in manufactured housing communities; ORS 90.425 addresses those located outside of such communities, i.e., on private parcels of land.

[4] This summary is not “legal advice.” It is intended as a general description of the process in broad strokes. For details, the statutes must be reviewed and understood before proceeding.