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Answer: This is a new one. The Oregon landlord tenant law does not expressly address this specific issue. The closest it comes are the following laws:

1. ORS 90.755 Right to speak on political issues; limitations; placement of political signs:

(1) No provision in any bylaw, rental agreement, regulation or rule may infringe upon the right of a person who rents a space for a manufactured dwelling or floating home to invite public officers, candidates for public office or officers or representatives of a tenant organization to appear and speak upon matters of public interest in the common areas or recreational areas of the facility at reasonable times and in a reasonable manner in an open public meeting. The landlord of a facility, however, may enforce reasonable rules and regulations relating to the time, place and scheduling of the speakers that will protect the interests of the majority of the homeowners.

(2) The landlord shall allow the tenant to place political signs on or in a manufactured dwelling or floating home owned by the tenant or the space rented by the tenant. The size of the signs and the length of time for which the signs may be displayed are subject to the reasonable rules of the landlord. (Emphasis added.)

2. 90.750 Right to assemble or canvass in facility; limitations. No provision contained in any bylaw, rental agreement, regulation or rule pertaining to a facility shall:

(1) Infringe upon the right of persons who rent spaces in a facility to peaceably assemble in an open public meeting for any lawful purpose, at reasonable times and in a reasonable manner, in the common areas or recreational areas of the facility. Reasonable times shall include daily the hours between 8 a.m. and 10 p.m.

(2) Infringe upon the right of persons who rent spaces in a facility to communicate or assemble among themselves, at reasonable times and in a reasonable manner, for the purpose of discussing any matter, including but not limited to any matter relating to the facility or manufactured dwelling or floating home living. The discussions may be held in the common areas or recreational areas of the facility, including halls or centers, or any resident’s dwelling unit or floating home. The landlord of a facility, however, may enforce reasonable rules and regulations including but not limited to place, scheduling, occupancy densities and utilities.

(3) Prohibit any person who rents a space for a manufactured dwelling or floating home from canvassing other persons in the same facility for purposes described in this section. As used in this subsection, “canvassing” includes door-to-door contact, an oral or written request, the distribution, the circulation, the posting or the publication of a notice or newsletter or a general announcement or any other matter relevant to the membership of a tenants’ association.

(4) This section is not intended to require a landlord to permit any person to solicit money, except that a tenants’ association member, whether or not a tenant of the facility, may personally collect delinquent dues owed by an existing member of a tenants’ association.

(5) This section is not intended to require a landlord to permit any person to disregard a tenant’s request not to be canvassed. (Emphasis added.)

3. 90.740 Tenant obligations. A tenant shall:

(3) Behave, and require persons on the premises with the consent of the tenant to behave, in compliance with the rental agreement and with any laws or ordinances that relate to the tenant’s behavior as a tenant.

(4) Except as provided by the rental agreement:

(a) Use the rented space and the facility common areas in a reasonable manner considering the purposes for which they were designed and intended;

(i) Behave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors. (Emphasis added.)

So, you see, this simply isn’t addressed in the landlord-tenant law. Nor should it be. Clearly, the resident leaving the religious material in the clubhouse could, if he or she wanted, go door to door proselytizing, unless and until others complained. If the materials are left anonymously, without more than a single resident being offended, I’m not sure what the landlord could or should do. Remove and destroy the materials?

If the landlord knows who is doing this, perhaps a personal discussion with them might be in order. But telling them to “stop” because a single person is offended seems unnecessary. If there is a place in the clubhouse for storage of reading materials, perhaps removing the literature to that location would work. Certainly, no rule change prohibiting placement of materials in the clubhouse (just because they are religious) is unnecessary. Management cannot be responsible for controlling the placement of written materials in the clubhouse unless it is offensive, inappropriate for minors and guests. This is what free speech is all about. My view would be the same regardless of the denomination of the literature. If I’m incorrect, I’m sure I will hear about it.

Answer. This issue is not dissimilar to one asked recently where the hospitalized resident's sister came as a concerned family member and, bringing her small child, wanted to stay at the home which was located in a 55+ community.

My response then, s here, is that ORS Chapter 90, like most laws, is enacted to address essentially 80% of the most commonly observed landlord-tenant issues. That leaves the other 20% to be dealt with on an ad hoc basis, i.e. as they arise. This situation raises issues that do not have a direct answer under the law.

Here, the issue deals, perhaps more directly, with what authority management has to permit friends and family to reside in the home of the comatose resident? Without some assurance that any of these folks would be permitted to stay in the home, the answer is a bit easier than whether a visiting sister with a small child is in violation of the 55+ park rules (she was not).

The most conservative answer is, to me, the best one; unless there is some basis for granting consent, I would not permit anyone to occupy the home, other than the resident. You have no knowledge of the visitor's backgrounds, and permitting them to encamp in the resident's home could pose problems to other residents.

The Oregon landlord-tenant law contains nothing one could point to that would authorize management to turn over possession to friends and family. Even family alone, should not be permitted access. There are simply too many things that could go wrong, and families can do strange things when a member passes away.[1]

• Like taking items from the home that now belong to the estate;
• Like moving in and claiming the home was "inherited";
• Like selling the home and retaining the proceeds, etc.

And what if the resident recovers? Will there be issues when he/she wants to return home, and one or more persons are staying there? What if valuables are missing?

The take-away is this: Absent some fairly clear instructions from the resident, or the attorney-in- fact under a durable power of attorney, the downside in permitting occupancy far outweighs any upside. Your explanation should be simple and straight forward: Oregon law does not authorize you to turn over possession of a resident's home to any unauthorized third parties. Under no circumstances should you accept any rent payments from them.

Lastly, if the friends and family are already staying in the home, you have a different set of problems. These folks are squatters, in that they did not enter into possession under any legal claim of right. ORS 90.100(43) defines a "Squatter" as:

... a person occupying a dwelling unit who is not so entitled under a rental agreement or who is not authorized by the tenant to occupy that dwelling unit. "Squatter" does not include a tenant who holds over as described in ORS 90.427 (7).

Accordingly, you should first try to get them to vacate immediately and peaceably. If they refuse, your only alternative is to file for eviction against them. You do not need a written notice, since this case does not arise under the Oregon Residential Landlord-Tenant Act. You should contact an attorney familiar with eviction law, who can assist you in using the proper summons and complaint. (See, ORS 105.126) Once filed, the case will proceed in much the same fashion as all other evictions.

[1] Remember that the abandonment law has a specific protocol upon death of a resident living alone. Management is required to secure the home, issue a 45-day letter, and give the estate the same rights as a lienholder, with the obligation to pay storage fees and maintain the home until removal or resale. And no one may occupy the home. See, ORS 90.675(21).

Answer:  This is a new one.  The Oregon landlord tenant law does not expressly address this specific issue. The closest it comes are the following laws:

1. ORS 90.755 Right to speak on political issues; limitations; placement of political signs:

(1) No provision in any bylaw, rental agreement, regulation or rule may infringe upon the right of a person who rents a space for a manufactured dwelling or floating home to invite public officers, candidates for public office or officers or representatives of a tenant organization to appear and speak upon matters of public interest in the common areas or recreational areas of the facilityat reasonable times and in a reasonable manner in an open public meeting. The landlord of a facility, however, may enforce reasonable rules and regulations relating to the time, place and scheduling of the speakers that will protect the interests of the majority of the homeowners.

            (2) The landlord shall allow the tenant to place political signson or in a manufactured dwelling or floating home owned by the tenant or the space rented by the tenant. The size of the signs and the length of time for which the signs may be displayed are subject to the reasonable rules of the landlord. (Emphasis added.) 

2. 90.750 Right to assemble or canvass in facility; limitations. No provision contained in any bylaw, rental agreement, regulation or rule pertaining to a facility shall:

            (1) Infringe upon the right of persons who rent spaces in a facility to peaceably assemble in an open public meeting for any lawful purpose, at reasonable times and in a reasonable manner, in the common areas or recreational areas of the facility. Reasonable times shall include daily the hours between 8 a.m. and 10 p.m.

            (2) Infringe upon the right of persons who rent spaces in a facility to communicate or assemble among themselves, at reasonable times and in a reasonable manner, for the purpose of discussing any matter,including but not limited to any matter relating to the facility or manufactured dwelling or floating home living. The discussions may be held in the common areas or recreational areas of the facility, including halls or centers, or any resident’s dwelling unit or floating home. The landlord of a facility, however, may enforce reasonable rules and regulations including but not limited to place, scheduling, occupancy densities and utilities.

            (3) Prohibit any person who rents a space for a manufactured dwelling or floating home from canvassing other persons in the same facility for purposes described in this section. As used in this subsection, “canvassing” includes door-to-door contact, an oral or written request, the distribution, the circulation, the posting or the publication of a notice or newsletter or a general announcement or any other matter relevant to the membership of a tenants’ association.

            (4) This section is not intended to require a landlord to permit any person to solicit money, except that a tenants’ association member, whether or not a tenant of the facility, may personally collect delinquent dues owed by an existing member of a tenants’ association.

            (5) This section is not intended to require a landlord to permit any person to disregard a tenant’s request not to be canvassed. (Emphasis added.)

3.  90.740 Tenant obligations. A tenant shall:

            (3) Behave, and require persons on the premises with the consent of the tenant to behave, in compliance with the rental agreement and with any laws or ordinances that relate to the tenant’s behavior as a tenant.

            (4) Except as provided by the rental agreement:

            (a) Use the rented space and the facility common areas in a reasonable manner considering the purposes for which they were designed and intended;

            (i) Behave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors. (Emphasis added.)

So, you see, this simply isn’t addressed in the landlord-tenant law.  Nor should it be.  Clearly, the resident leaving the religious material in the clubhouse could, if he or she wanted, go door to door proselytizing, unless and until others complained.  If the materials are left anonymously, without more than a single resident being offended, I’m not sure what the landlord could or should do.   Remove and destroy the materials?  

If the landlord knows who is doing this, perhaps a personal discussion with them might be in order. But telling them to “stop” because a single person is offended seems unnecessary.  If there is a place in the clubhouse for storage of reading materials, perhaps removing the literature to that location would work.  Certainly, no rule change prohibiting placement of materials in the clubhouse (just because they are religious) is unnecessary.  Management cannot be responsible for controlling the placement of written materials in the clubhouse unless it is offensive, inappropriate for minors and guests.[i] This is what free speech is all about.  My view would be the same regardless of the denomination of the literature.  If I’m incorrect, I’m sure I will hear about it.

WMA Reporter November 2017 Resident Relations Feature Article Warren Buffett's advice to small business owners is this: "The best advice to a small business owner... is never stop thinking about how to delight your customer. Not to satisfy your customer, but to delight your customer. And when you wake up in the morning, start thinking about it. At night, think about it. And then dream about it."

Remember too, that people generally will go along with a change if given a reason. It does not need to be the most elegant or elaborate reason. The point is to five a reason, i.e., "Yes, garbage cost will be passed through to the residents and let me explain the reason why... ". Most of the time the residents will feel they had their say, and they will be satisfied with the answer. Get in the habit of saying "and let me explain the reason why... ". Saying this will be a boon to your communication skills and thus your resident relations.

Several years ago, our state MHA offered the Accredited Community Manager (ACM) course. This course has been developed over the years by the Manufactured Housing Institute in conjunction with community owners. It is a top-notch course that dives deep into management and operations with sections on financials, resident relations, repairs and maintenance, and much more. The ACM instructor, Chrissy Jackson, a community owner, gave the class a tip for resident relations. It's the What We Do for You list. Chrissy recommended making a list of things, big and small, noticeable and unnoticed, that you do for the residents. Ideas for using the What We Do for You list could be printed once a year in your newsletter, put it on your website, as a hand out in the office, or laminated and posted in the office. It's also a tool for your manager, too. In the hubbub of their duties, it is easy for manager to forget why the community is a great place to live. The What We Do for You list needs to be top of mind for them.

It keeps them enthusiastic about the mobilehome park and what a great value it offers the residents. What doesn'twork is when a resident complains to a manager and the manager's response is, "Uh... let me get back to you." The manager's response needs to be energetic and positive after hearing out the resident. Our managers should add to this list monthly. Do you think there is nothing new that you do for your residents? Or do you think the residents know everything the community does and provides? Think again. This might be new information to your residents but it's a good refresher, too. Here is a sample:

A LETTER TO THE RESIDENTS OF ABC MOBILEHOME PARK

Dear Residents,

Thank you for another wonderful year at ABC. We have had some fun with our first annual Clean Up Contest. Looking back at the year in review, we have done some very nice improvements to the park and will continue that trend in to 2018.

Streets, Sewer and Water:

Most years we make a significant street repair or replacement project; our harsh Midwest climate is tough on streets. With an older park, such as our ABC, the water lines and sewer lines are repaired and replaced a lot. We thank our residents who are careful about what they put down their sinks and toilets and refrain from grease, cigarettes, and wipes getting flushed or poured down the drains.

Water Conservation and Water Meters

Adding individual meters has resulted in over 1,000,000 gallons of water consumption reduction per year! We also notify residents when their consumption spikes, so they can remedy a dripping faucet or other leak. Conserving water is an important contribution to sustainability. Consistently looking for water main leaks adds to this effort and contains operational cost.

New Homes:

Buying new homes for the community helps upgrade the overall appearance of the park. Buying pre-owned homes has offered our residents the opportunity to move up to a newer or larger home. When a resident buys a "new" park owned home, we often buy that resident's existing mobilehome. This helps them buy the "new" home.

LED and Sustainability:

We have installed some LED lighting in our outside storage area and on individual lots where the yard lights were repaired or replaced. Some of the hills have been planted with shrubs for erosion resistance and to cut down on mowing, as per a city initiative to curb carbon emissions.

Appearance of Homes and Home Sites:

During our Spring and Fall Clean Up Campaigns, our managers did a masterful job of working with the residents to get the mobilehomes and home sites looking clean and cared for as possible. There was a lot of power washing, painting, skirting and general junk removal. Our managers and residents worked together on this year's clean up so that residents can feel proud of where they live.

New Resident Screening:

The managers do their best to screen prospective residents so that when a home in the community sells a good resident moves in. Further, we use a service for background checks. Our managers provide onsite management that is backed up by our regional property manager, making sure that there is always someone available in person, by email, or by phone to listen and address questions or concerns.

Selling Tenant Owned Homes:

There are a lot of people that would like to move in to your community. The many inquiries and calls we receive is a good indication of demand. Our website benefits residents by providing basic information about the park, rules and policies, lot rent, homes for sale, etc. We also help our residents with the paperwork or selling their home.

Again, thank you for the wonderful year. Please feel free to reach out to management if you have a question or concern.

Ultimately, the mobilehome park's job is to operate in such a way that the homeowners' home value is at least maintained, if not enhanced. Mobilehome ownership may be one of the tenants' largest assets. We owe it to them to make the mobilehome park as clean, well run, and attractive as possible.

Joanne Stevens is a real estate broker specialist in listing and selling mobilehome parks and manufactured home communities throughout the U.S. She can be reached at 319.378.6785 phone; 319.365.9833 fax; and email: joannestevens@joannemstevens.com.

This article is reprinted with permission from WMA Reporter November 2017 'Resident Relations Feature Article'.

Q: If I am thinking of selling my park, when do I have to send notice to my tenants?
 

A: ORS 90.842 requires an owner to give written notice of the owner's interest in selling the park before an owner markets a park for sale or when the owner receives an offer to purchase that the owner intends to consider, whichever occurs first. If possible, I advise my clients to send the notice before entering into a listing agreement and certainly before actively listing the property. 

This requirement has been in place since 2015 and HB 2364 did not modify it. In the last few years, my experience has been that the statute is triggered mostly when an owner receives an offer to purchase that it intends to consider.

Q: Does the notice need to be sent to each tenant individually versus all tenants (e.g. "Dear Mr. Johnson" vs. "Dear Tenant")?

A: The plain language of the law states "all tenants," but the 2014 Summary of Legislation states that the purpose of the bill is to require park owners to notify "individual park residents" if the owner is interested in selling the park. Because it appears that the original intent was to notify everyone, the safer course is to send the notice to each tenant individually.

If a tenants committee has been formed, and the purpose of the committee is (in part) to purchase the park, and you have met with the committee in the previous 12 months, you can send a notice to the tenants' committee in lieu of all tenants. Also note that you must send a copy of the notice to the Housing and Community Services Department. 

My practice, since 2015 has been to still send the notice to all tenants, even if an owner is aware of a tenants’ committee. This requirement was not changed with HB 2364. The statute did add that the requirement to send the notice to the Housing and Community Services Department must be done “in the manner prescribed by the department by rule.”  At the time of publication, I do not believe this rule has been promulgated; however, at this time, I would send a copy of the notice to the Manufactured Communities Resource Center.

Q: What does the notice have to include?

A: (1) The owner is selling the park; (2) The tenants, through a tenants committee, have an opportunity to purchase the park; (3) In order to compete to purchase the park, within 15 days after delivery of the notice, the tenants must form (or identify) a single tenants committee for the purpose of purchasing the park and notify the owner in writing of: (a) the tenants' interest in competing to purchase the park; and (b) the name and contact information of the representative of the tenants committee with whom the owner may communicate about the purchase; (4) The representative of the tenants committee may request financial information described in section 2(2) of the statute within the 15 day period; and (5) information about purchasing a park is available from the Housing and Community Services Department.

HB 2364 increased the time from 10 days to 15 days to allow the tenants to respond.

Q: Does 15 days really mean 15 days?

A: The law discusses "delivery of the notice." I advise my clients that all notices should be sent by first class mail and 3 days should be allowed for mailing just as if you were sending a 30-day notice or a 72-hour notice. Certificates of Mailing (Not certified mail!!) for each notice are strongly encouraged. By way of example, if you send the notice on June 1, then the "15 days" would run on June 18.

Q: What do the tenants have to do after I send them the notice?

A: If the tenants are interested in competing to purchase the park, within the 15 days, the tenants must notify the owner in writing of their interest in competing to purchase the park, the formation or identification of a single tenants committee formed for the purpose of purchasing the park and the name and contact information of the representative of the tenants committee with whom the owner may communicate about the purchase.

In practice, a non-profit entity, like CASA of Oregon, will notify you or your legal counsel of the tenants’ interest in competing to purchase your park. I have found CASA of Oregon to be professional and reasonable with both the manner of delivery of notices and information (electronic mail is preferred). In most cases, you (or your legal counsel) will not be dealing with the tenants’ committee but will be primarily communicating with CASA and their professional advisors.

Q: Do I have to give the tenants my tax returns, SSN and Mother’s Maiden Name?

A: No. But, during the 15 days of delivery of the notice, and in order to perform a due diligence evaluation of the opportunity to compete to purchase, your tenants (through CASA or another non-profit), may request specific financial information which may include: the asking price, if any (this provision contemplates that you may not yet know your asking price when you send your notice); the total income collected from the park and related profit centers, including storage and laundry, in the calendar year before delivery of the notice; the total operating expenses for the facility paid by the owner or landlord in the calendar year before delivery of the notice; the cost of all utilities for the park that were paid by the owner in calendar year before delivery of the notice; the annual cost of all insurance policies paid by the owner as shown by the most recent premium; the number of homes in the park owned by the owner; and the number of vacant spaces and homes in the park. Please note that I have seen requests that ask for additional information; providing information outside of what is outlined above is discretionary. The owner has 14 days to deliver the information to the tenants.

The changes above are three-fold: First, the owner has been given an additional 7 days to pull this information together. In practice, a well-organized owner should have this information all pulled together prior to sending the initial notice so there is no delay.  Second, the statute used to call for the information in the 12 months prior to sending the notice, now it is the calendar year. Figuring out this information across calendar years can be challenging. In practice, an owner may want to give information from the previous calendar year together with a year-to-date snapshot of the income and expenses. CASA may ask for 2-3 years’ worth of information; you are not required to give it, but there is nothing stopping you. Finally, “total operating expenses” were added. My practice has been to provide a P&L or pro forma that you would give to any other seller. Such information would likely exceed your obligations. 

Q:  Is the information protected from disclosure?

A: Yes. The statute allows an owner to designate all, or part of the financial information, as confidential. If the owner designates the financial information as confidential, the parties may establish a list of who can see the information and with whom the information can be shared. In practice, CASA has modified their confidentiality agreement to only allow members of CASA (and their legal and accounting professionals) to see the confidential information. If the confidentiality agreement is breached by the tenants, the owner may recover actual damages from the tenant or tenants.

What happens after I disclose the financial information?

A: Within 45 days after delivery of the financial information (or 45 days after the end of the 15 day period in the unlikely event the tenants do not request financial information), and if the tenants choose to compete to purchase the park, the tenants must: (1) form a corporate entity that is legally capable of purchasing property or associate with a nonprofit corporation or housing authority that is legally capable of purchasing real property or that is advising the tenants about purchasing the park in which the tenants reside; and (2) submit a written offer to purchase the park, in the form of a proposed purchase and sale agreement, and either a copy of the articles of incorporation of the newly formed entity .

The increase to 45 days is a substantial change to the statute. It used to be 15 days. While a bit more onerous, it is less than what was originally being proposed. 

Q: Do I have to accept the offer?

A: No. You may accept, reject, or submit a counteroffer. You should view the tenants (and negotiate with them) as you would any potential third-party purchaser. If the offer is far off or not commercially reasonable, you can reject the offer outright. While not required, I usually advise my clients to explain why it's not doable (e.g., unreasonable financing terms, not enough cash, long closing date, too much many contingencies). If the offer is close to the mark, you may want to counter with terms. In my opinion, the key is to deal with the tenants committee as you would any bona fide purchaser. don't treat them differently just because they are tenants.

Nothing in HB 2364 changed this, although a “good faith and fair dealing” requirement was added in the consideration and negotiation with the tenants group.  (See below).

Q: What if I just don’t want to sell to my tenants because they’re tenants?

A: In my opinion, this was the behavior that the Legislature was trying to address by adding in the “good faith and fair dealing” requirement. One of the problems with “good faith and fair dealing” is that it is not a specific action that can be measured, but an action that a future judge or jury will likely “know it when they see it.” There is no doubt that if an owner decided not to give a group of tenants an opportunity to compete to purchase or decided not to sell to the tenants when the terms were otherwise commercially reasonable (and better than other offers), just because they are tenants, that behavior would violate the statute. The penalty is severe. The owner could be facing a judgment equal to 10% of the purchase price of the facility plus attorney fees.

As you can imagine, as MHCO was attempting to understand what this would mean for owners, we wanted to understand what the intent of the language was. We were able to work with Chair Julie Fahey (now Majority Leader Fahey) to place some helpful language in the legislative record that would assist future owners (and their attorneys) in understanding what was (and was not) “good faith”. 

Chair Fahey’s comments, together with the examples of what is good faith will help any future owner navigate an offer from their tenants.
 

During consideration in the Committee, Chair Fahey was clear in stating that the purpose of the good faith language was not intended to give the tenants a “right of first refusal” nor to give tenants any special advantage over another third-party purchaser in negotiation; rather, the purpose is to strengthen the requirement that facility owners give a fair chance to their tenants to compete to purchase a facility. 

Furthermore, Chair Fahey stated that, “good faith on the part of the parties, both the tenants and any facility owner, is presumed.” A tenant or group of tenants would have to prove that that a facility owner was unwilling to consider an offer from tenants, to negotiate with tenants, or to sell to tenants solely because they are tenants (and no other commercially reasonable factors exists), would violate the statute, as amended.

Additionally, Chair Fahey shared some specific examples of what was acting or negotiating in good faith:

1. After giving the notice required by ORS 90.842, the facility owner enters into a non-binding letter of intent with a separate third-party potential purchaser. That non-binding letter of intent references the facility owner’s duty to consider, in good faith, any offer the tenants may make (this is a common practice, and one I advise my clients on as it allows an owner to move on two tracks). It is very important that the third-party purchaser be aware of and respect an owner’s obligation to consider the tenants’ offer;

2. After receiving an offer from the tenants, the landlord rejects the offer because the material terms of the offer are outside of what the facility owner would consider.  Material terms could include (but are not limited to): price; date of closing, amounts and timing of earnest money deposits; dates of due diligence and contingences and possible effect on date of closing; and whether earnest money is “hard”, or whether the earnest money will go hard; details of contingencies (including financing contingencies);

3. After receiving an offer from the tenants, the landlord rejects the offer because of other extenuating circumstances. Other extenuating circumstances could include (but are not limited to): the potential sale of a facility that would include other consideration besides cash (i.e. stock or property trades);
4. A landlord rejects an offer from the tenants and the landlord provides a rationale for the rejection that is true (please note that the rationale is not necessary, but providing a truthful rationale, is in of itself good faith); and

5. After receiving an offer from the tenants, the landlord makes a counteroffer that is commercially reasonable.

This is not an exhaustive list but provides good guidance on how an owner should consider any potential offer. Again, you should work with your legal professional as you navigate this issue.

Q: What happens if the tenants don't respond within the 15 days or don't respond within the 45 days of me providing financial information?

A: You have no further duties under the statute.

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

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

Q: I've entered into a purchase and sale agreement with a separate buyer, and I haven't followed the process. What should I do?

A: Call your lawyer – today.  It may be fixable but failing to follow this process allows affected tenants to obtain injunctive relief to prevent a sale to a third-party purchaser (which could cause you to be in breach with that third party purchaser) and to recover significant penalties. Bottom line is to be aware of your responsibilities and follow the statute.
 

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

A: You must file an affidavit certifying that you've complied with the process and that you have not entered a contract for the sale or transfer of the park to an entity formed by or associated with the tenants. The purpose of this affidavit is to preserve the marketability of title to parks. Additionally, there is a requirement that you notify the Housing and Community Services Department who the new owner is.

Q:  Are there exceptions to this statute?

A: Yes. The exceptions are listed in ORS 90.848. The most common exception is any sale or transfer in which the facility satisfies the purchaser’s requirement to make a like-kind exchange under section 1031 of the Internal Revenue Code. In other words, if you receive an unsolicited offer from a potential purchaser who is attempting to satisfy a 1031 exchange you are not required to give your tenants an opportunity to compete to purchase.

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

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.

The FHAA

In 1988, Congress amended the Fair Housing Act (FHA) to prohibit not just discrimination on the basis of race, color, sex, religion, disability, or national origin, but also included familial status discrimination. Familial status is defined as " one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals."

Among other provisions, it is unlawful:

"To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ..."

Thus, a restriction on access or use of common facilities and amenities bases on age of a child (familial status) is a violation of the FHAA, absent compelling business necessity. Any such rule must be proved to be the least restrictive means to achieving a health and safety justification. What does this legalese mean to the community owner in practical terms? A full-blown trial, risks of heavy penalties, damages, and attorney's fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case depends on the facts and surrounding circumstances. In other words, each case is a test-case. In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

Children are as protected as any other protected class. Thus, a simple way to test a rule for FHA compliance is this: insert any other protected class in the place of "children" when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is "all children under 14 years of age must be accompanied by an adult resident when in the pool area." Then, how does this sound: "All Methodists must be accompanied by an adult resident ...." Obviously, such a rule is patently violative of the FHA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference, (e.g. "... gosh, if I had my druthers, I would rather not rent to families"). Another issue is use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or

national origin, (example, in an area overwhelmingly populated by non-English speakers, advertising only in English language publications). Other violations will be found where there are ads or statements made regarding applicants, including: "mature person;" stating an aversion to "families with children" or "teenagers in the building;" advertisements stating non more than "one child;" or, stating that the community owner does not "rent to children." Posting "Adult Community: at the entrance to a non-exempt community also violates the FHAA. Use of the word "adult" without more, constitutes a violation of the FHAA. There are no such thins as adult manufactured home communities, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The various rules cited by the courts as impermissibly restricting access or denying the use of the communities' facilities and/or areas on the basis of age, included the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implanting regulations and judicial and administrative interpretations) be promptly consulted.

• Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
• Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
• Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
• Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
• Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
• Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
• Use of the billiards room was restricted to residents over eighteen (18) years old;
• Use of the spa was prohibited to children under eighteen (18) years old;
• Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
• Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
• Parent or resident child or resident host must accompany children at all times in the pool or pool area.
• Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
• No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
• No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
• At 2 p.m. children are to be out of the pool area;
• Children are not to walk around the community without adult supervision;
• Minors under sixteen (16) years old are not permitted in the therapeutic pool;
• For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
• Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

The court held that these rules were not based on compelling business necessity and did not represent the least restrictive intrusions on familial status rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney's fees and costs for the private plaintiffs.

While the action had been brought as a class claim (in which all of possibly thousands of affected residents could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court's comments regarding the invalidation of these rules is telling and troubling. The court stated the age-restrictive rules were facially discriminatory. In other words, no matter how administered, the rules were invalid as drafted. Even if never enforced , such rules might dissuade a prospective applicant from applying for tenancy. These rules "...treat children, and thus, families with children differently and less favorably than adults-only households." "Describ[ing] parks as 'adult' parks are clear examples of illegal steering. Although they are not outright refusals to sell or rent or families with children, they indicate a preference for adults only and certainly discourage families with children from applying."

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

The absolute prohibitions include those rules that (1) prohibit all children under 18 (or 21) years old from using the billiard room and from riding bicycles, (2) prohibit all children under 16 (or 18) years old from using the therapeutic pool, (3) prohibit all children under 14 (or 18) years old from using the sauna or Jacuzzi, (4) require all children under 8 years old to be confined to rear fenced yard of family residence, and (5) prohibit all children from playing on community streets and any other common areas.

The court held that absolute prohibitions such as the foregoing are illegal. The regulations are not the least restrictive means to achieve health and safety objectives ("...prohibiting all 'children' from playing in common areas ... cannot be justified"). The same applies with the billiard room ("... it is unclear how a 17-year-old's access to a billiard room is any more hazardous to ... health or safety that a 22-year-old's access").

Supervision restrictions

The fundamental premise adopted by the court is that "[A]ny concerns that defendants may have are not necessarily linked to age, and any concerns about problem behavior can be address with the use of rules." Thus, the court invalidated blanket prohibitions of all 15-year-olds from using the therapeutic pool and all 13-year-olds from using the sauna or Jacuzzi

In certain instances adult supervision might less restrictively advance health and safety concerns ("assuming arguendo that defendants' concerns were more logically linked to the age restrictions, requiring adult supervision rather than imposing an absolute ban is clearly a less restrictive means ..."). But where to set the limit is uncertain. California regulations state:

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning - No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

Based on the Plaza Mobile Estates decision, it is needlessly legally risky to impose any supervision requirement. Clearly, a 14 year age limit for an adult supervision is not enforceable, not legal, and constitutes a violation of the FHA, despite former administrative decisions suggesting the contrary and California regulations cited above. Yet, the need for an age limit is strikingly clear. The same rule applies to use of spas and whirlpools. Certainly an adult supervision requirement should be reasonable[1], but eh court has ruled that such concerns are fro the parents, not the management.

A few apparently unassailable precepts

Given that this case raises many more questions than it answers, the ability to promulgate and rely on age-restrictive rules for access and supervision are certainly less than a matter of clarity. While the previous rulings concerning the enforceability of age-restrictive rules are in some doubt, a few precepts can be stated with some reliability. The first is that an outright prohibition of use or access to any facility or amenity cannot be allowed. Setting up selected hours for usage of a facility of amenity cannot be allowed. Less certain is the ability to promulgate rules requiring adult supervision of children of varying ages for use of facilities or amenities. It would appear that no supervision can be mandated for areas such as clubhouse, billiard room, library or common areas.

Establishing minimum age requirements for supervision: A foray into the uncertain

The "14 and under" requirement of California regulations for pool supervision is a should not a must provision. Hence, management cannot require supervision of 14 years of age and under. The only clearly legal position is not to require supervision, and let it be for the parents to take personal accountability and responsibility for their children. The court makes this statement:

"... there is nothing magical about the age 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement."

The courts have intervened on occasion to require discrimination against children for their own good and government does so all the time. For example, you cannot vote until you are 18, drink alcohol until you are 21, cannot drive until you are 16.[2] However, housing providers subject to the FHA may not rely on or use the same governmentally-established restrictions in developing their rules and regulations despite the dangers posed by the common area facilities.

Another example: Pedestrian injuries are the second greatest cause of harm to children from five to 14 years of age. See the National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997.[3] However, it is illegal to have a rule and regulations which states that "children are not to walk around the community without adult supervision."

Is it unreasonable to require adult supervision within the common areas of a manufactured home community? It would seem that such a rule is reasonable. However, for a community owner, such a rule violates the FHA. On the other hand the Consumer Products safety Commission urges supervision of children while on a playground for example (Consumer Product Safety Commission, Public Playground Safety Checklist, CPSC Document #327: "10. Carefully supervised children on playgrounds to make sure they're safe"). The federal law states that the parents are responsible for their children, not the management.

Previously sustained rules

The courts have previously allowed the following rules. This information may be largely historical at this juncture, for it remains unclear whether or not they remain viable in light of the Plaza Mobile Estates decision (these rules were sustained under the previous "reasonableness" test, not the "compelling interest" basis test):

1. Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
2. A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
3. Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
4. In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine - in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
5. One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

However, it is too much to criticize or impugn the court for adhering to the letter of the law, and not legislating by "judicial fiat." The court interprets what the law is and does not legislate. That is the job of Congress and more pointedly in this case HUD (in its rule-making powers). The FHA prohibits discrimination, period. The federal law makes NO exceptions; exceptions to familial status rights is the job of HUD. It is not the court's duty. The court is not the Legislature.

The need for uniform guidelines to inform the housing providers of permissible restrictions

HUD should provide guidance for housing providers and establish bright line tests for common sense age-restrictive rules. HUD should defer to other legislative judgments made for child protection by allowing community owners to replicate existing laws in their rules and regulations. Model regulations for protection of the young could be published. HUD could establish a rule pre-approval procedure.

Community owners just want to comply with the law and provide reasonable requirements for protection of children. But now, even experienced lawyers cannot intelligibly predict the enforceability of any age-restrictive rules. At this time, attaining any ascribed legitimacy of a rule only follows after an expensive legal defense with a heavy burden of proof requiring compelling business necessity. A conciliation agreement binds the complainant. If another resident complains the next day, the conciliation agreement is worthless as a defense to the rule. This is an inconceivably inefficient manner of testing rule validity. The costs to business in such concerns vastly outweigh the benefit to be achieved. The cost to the consumer in spreading the expense of this exercise could be largely obviated if the housing provider had some guidance in defining acceptable rules for promotion of health and safety. The suggestion of administering proficiency tests is a null and void concept. The liability for negligently administering such tests, seeking and paying for qualified testers, and then excluding the non-proficient residents will not be pursued by a single housing provider.

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service - disseminating information and facts - not discriminating against children.[5]

You may also consider consulting with HUD in advance of amending rules and regulations. IF HUD even informally opines that a proposed policy is not defensible, or that no comment can be offered, at least the community owner can better assess the risk faced with a new rule and regulation. For example, if a resident complains that a particular resident who has open sores due to infection with the AIDS virus desires to use the swimming pool, can the management require that resident to stay out of the pool?

When faced with the question, the manger called to advise that she was not sure how to proceed. While administrative regulations require a doctor's letter stating that no public health or safety risk was posed by the patient's use of the pool, I consulted with HUD before announcing the management policy.

Finally

All the community owner wants is to know what the law is! What we do know is certain rules, certain practices reflecting what the law is not. But it is grossly unfair to relegate the duty to set standards on management. Having read this article, can you now, safely amend your rules to impose such a rule? No. No attorney can give an absolute assurance that such a rule will be sustained until ruled valid in a court. Until a court actually rules on the validity of the rule, or HUD or DFEH offers guidance on their interpretation of the rule, there can be no assurance of what an will not be permitted in developing age-restrictive rules and regulations. The best policy is to eliminate any and all age restrictive rules and regulations to avoid FHA claims.

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

Terry Dowdall has specialized in manufactured home communities' law since 1978. His firm, Dowdall Law Office, APC is located in Orange County and Sacramento, with a practice limited exclusively to the manufactured housing industry. Mr. Dowdall serves as a legal advisor on WMA's Legislative Committee and has authored publications for the Continuing Legal Education of the State Bar. He is a frequent contributor to the WMA Reporter and facilitator at WMA educational seminars. He can be reached at 714-532-2222 (Orange) or 916-444-0777 (Sacramento).

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools - drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures - CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[2] Municipal curfew regulations abound which restrict children. Los Angeles is typical. No one under 18 years of age is permitted in public places during school hours (" ... present in or upon the public streets, ... or any place open to the public during the hours of 8:30 am and 1:30 pm"). L.A.M.C. 45.04. The same restrictions apply after 10 pm. ("... any minor under the age of eighteen years to be present in or upon any public street, ... between the hours of 10:00 pm on any day and sunrise of the immediately following day; ...."). L.A.M.C. 45.03. Regulations for pool halls E.g. 17 (Midland Mi. Mun. Code Sec. 15-34) and 18 (1063-B. Pool halls. Public Laws of Maine) year age requirement), are commonly promulgated for the health and safety concerns for minors. It is unsafe for a park owner to rely on local or state laws in this respect in drafting rules and regulations.

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic-related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[4] According to the U.S. Products Safety Commission: "The U. S. Consumer Product Safety Commission estimates that between 1985 and 1989, the latest period for which data are available, there were 1,200 amputations of children's fingers because of contact with exercise bikes. Most children were under the age of five. Many of the injuries occurred when the child's fingers touched the moving bike wheel or the chain and sprocket assembly. The Commission is concerned about the severity of injuries to children, especially because the hazard may not be obvious. Therefore, the commission warns parents always to keep children away from exercise bikes. Never use a bike without a chain guard, and when not using the bike, store it where children cannot get to it. Children's fingers can be amputated if they touch moving parts of exercise bike." Prevent Finger Amputations to Children From Exercise Bikes: Safety Alert: CPSC Document #5028.

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality - they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles. 

The FHAA

In 1988, Congress amended the Fair Housing Act (FHA) to prohibit not just discrimination on the basis of race, color, sex, religion, disability, or national origin, but also included familial status discrimination. Familial status is defined as " one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals."

Among other provisions, it is unlawful:

"To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ..."

Thus, a restriction on access or use of common facilities and amenities bases on age of a child (familial status) is a violation of the FHAA, absent compelling business necessity. Any such rule must be proved to be the least restrictive means to achieving a health and safety justification. What does this legalese mean to the community owner in practical terms? A full-blown trial, risks of heavy penalties, damages, and attorney's fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case depends on the facts and surrounding circumstances. In other words, each case is a test-case. In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

Children are as protected as any other protected class. Thus, a simple way to test a rule for FHA compliance is this: insert any other protected class in the place of "children" when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is "all children under 14 years of age must be accompanied by an adult resident when in the pool area." Then, how does this sound: "All Methodists must be accompanied by an adult resident ...." Obviously, such a rule is patently violative of the FHA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference, (e.g. "... gosh, if I had my druthers, I would rather not rent to families"). Another issue is use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or

national origin, (example, in an area overwhelmingly populated by non-English speakers, advertising only in English language publications). Other violations will be found where there are ads or statements made regarding applicants, including: "mature person;" stating an aversion to "families with children" or "teenagers in the building;" advertisements stating non more than "one child;" or, stating that the community owner does not "rent to children." Posting "Adult Community: at the entrance to a non-exempt community also violates the FHAA. Use of the word "adult" without more, constitutes a violation of the FHAA. There are no such thins as adult manufactured home communities, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The various rules cited by the courts as impermissibly restricting access or denying the use of the communities' facilities and/or areas on the basis of age, included the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implanting regulations and judicial and administrative interpretations) be promptly consulted.

• Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
• Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
• Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
• Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
• Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
• Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
• Use of the billiards room was restricted to residents over eighteen (18) years old;
• Use of the spa was prohibited to children under eighteen (18) years old;
• Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
• Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
• Parent or resident child or resident host must accompany children at all times in the pool or pool area.
• Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
• No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
• No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
• At 2 p.m. children are to be out of the pool area;
• Children are not to walk around the community without adult supervision;
• Minors under sixteen (16) years old are not permitted in the therapeutic pool;
• For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
• Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

The court held that these rules were not based on compelling business necessity and did not represent the least restrictive intrusions on familial status rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney's fees and costs for the private plaintiffs.

While the action had been brought as a class claim (in which all of possibly thousands of affected residents could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court's comments regarding the invalidation of these rules is telling and troubling. The court stated the age-restrictive rules were facially discriminatory. In other words, no matter how administered, the rules were invalid as drafted. Even if never enforced , such rules might dissuade a prospective applicant from applying for tenancy. These rules "...treat children, and thus, families with children differently and less favorably than adults-only households." "Describ[ing] parks as 'adult' parks are clear examples of illegal steering. Although they are not outright refusals to sell or rent or families with children, they indicate a preference for adults only and certainly discourage families with children from applying."

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

The absolute prohibitions include those rules that (1) prohibit all children under 18 (or 21) years old from using the billiard room and from riding bicycles, (2) prohibit all children under 16 (or 18) years old from using the therapeutic pool, (3) prohibit all children under 14 (or 18) years old from using the sauna or Jacuzzi, (4) require all children under 8 years old to be confined to rear fenced yard of family residence, and (5) prohibit all children from playing on community streets and any other common areas.

The court held that absolute prohibitions such as the foregoing are illegal. The regulations are not the least restrictive means to achieve health and safety objectives ("...prohibiting all 'children' from playing in common areas ... cannot be justified"). The same applies with the billiard room ("... it is unclear how a 17-year-old's access to a billiard room is any more hazardous to ... health or safety that a 22-year-old's access").

Supervision restrictions

The fundamental premise adopted by the court is that "[A]ny concerns that defendants may have are not necessarily linked to age, and any concerns about problem behavior can be address with the use of rules." Thus, the court invalidated blanket prohibitions of all 15-year-olds from using the therapeutic pool and all 13-year-olds from using the sauna or Jacuzzi

In certain instances adult supervision might less restrictively advance health and safety concerns ("assuming arguendo that defendants' concerns were more logically linked to the age restrictions, requiring adult supervision rather than imposing an absolute ban is clearly a less restrictive means ..."). But where to set the limit is uncertain. California regulations state:

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning – No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

Based on the Plaza Mobile Estates decision, it is needlessly legally risky to impose any supervision requirement. Clearly, a 14 year age limit for an adult supervision is not enforceable, not legal, and constitutes a violation of the FHA, despite former administrative decisions suggesting the contrary and California regulations cited above. Yet, the need for an age limit is strikingly clear. The same rule applies to use of spas and whirlpools. Certainly an adult supervision requirement should be reasonable[1], but eh court has ruled that such concerns are fro the parents, not the management.

A few apparently unassailable precepts

Given that this case raises many more questions than it answers, the ability to promulgate and rely on age-restrictive rules for access and supervision are certainly less than a matter of clarity. While the previous rulings concerning the enforceability of age-restrictive rules are in some doubt, a few precepts can be stated with some reliability. The first is that an outright prohibition of use or access to any facility or amenity cannot be allowed. Setting up selected hours for usage of a facility of amenity cannot be allowed. Less certain is the ability to promulgate rules requiring adult supervision of children of varying ages for use of facilities or amenities. It would appear that no supervision can be mandated for areas such as clubhouse, billiard room, library or common areas.

Establishing minimum age requirements for supervision: A foray into the uncertain

The "14 and under" requirement of California regulations for pool supervision is a should not a must provision. Hence, management cannot require supervision of 14 years of age and under. The only clearly legal position is not to require supervision, and let it be for the parents to take personal accountability and responsibility for their children. The court makes this statement:

"... there is nothing magical about the age 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement."

The courts have intervened on occasion to require discrimination against children for their own good and government does so all the time. For example, you cannot vote until you are 18, drink alcohol until you are 21, cannot drive until you are 16.[2] However, housing providers subject to the FHA may not rely on or use the same governmentally-established restrictions in developing their rules and regulations despite the dangers posed by the common area facilities.

Another example: Pedestrian injuries are the second greatest cause of harm to children from five to 14 years of age. See the National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997.[3] However, it is illegal to have a rule and regulations which states that "children are not to walk around the community without adult supervision."

Is it unreasonable to require adult supervision within the common areas of a manufactured home community? It would seem that such a rule is reasonable. However, for a community owner, such a rule violates the FHA. On the other hand the Consumer Products safety Commission urges supervision of children while on a playground for example (Consumer Product Safety Commission, Public Playground Safety Checklist, CPSC Document #327: "10. Carefully supervised children on playgrounds to make sure they're safe"). The federal law states that the parents are responsible for their children, not the management.

Previously sustained rules

The courts have previously allowed the following rules. This information may be largely historical at this juncture, for it remains unclear whether or not they remain viable in light of the Plaza Mobile Estates decision (these rules were sustained under the previous "reasonableness" test, not the "compelling interest" basis test):

1. Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
2. A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
3. Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
4. In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine – in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
5. One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

However, it is too much to criticize or impugn the court for adhering to the letter of the law, and not legislating by "judicial fiat." The court interprets what the law is and does not legislate. That is the job of Congress and more pointedly in this case HUD (in its rule-making powers). The FHA prohibits discrimination, period. The federal law makes NO exceptions; exceptions to familial status rights is the job of HUD. It is not the court's duty. The court is not the Legislature.

The need for uniform guidelines to inform the housing providers of permissible restrictions

HUD should provide guidance for housing providers and establish bright line tests for common sense age-restrictive rules. HUD should defer to other legislative judgments made for child protection by allowing community owners to replicate existing laws in their rules and regulations. Model regulations for protection of the young could be published. HUD could establish a rule pre-approval procedure.

Community owners just want to comply with the law and provide reasonable requirements for protection of children. But now, even experienced lawyers cannot intelligibly predict the enforceability of any age-restrictive rules. At this time, attaining any ascribed legitimacy of a rule only follows after an expensive legal defense with a heavy burden of proof requiring compelling business necessity. A conciliation agreement binds the complainant. If another resident complains the next day, the conciliation agreement is worthless as a defense to the rule. This is an inconceivably inefficient manner of testing rule validity. The costs to business in such concerns vastly outweigh the benefit to be achieved. The cost to the consumer in spreading the expense of this exercise could be largely obviated if the housing provider had some guidance in defining acceptable rules for promotion of health and safety. The suggestion of administering proficiency tests is a null and void concept. The liability for negligently administering such tests, seeking and paying for qualified testers, and then excluding the non-proficient residents will not be pursued by a single housing provider.

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service – disseminating information and facts – not discriminating against children.[5]

You may also consider consulting with HUD in advance of amending rules and regulations. IF HUD even informally opines that a proposed policy is not defensible, or that no comment can be offered, at least the community owner can better assess the risk faced with a new rule and regulation. For example, if a resident complains that a particular resident who has open sores due to infection with the AIDS virus desires to use the swimming pool, can the management require that resident to stay out of the pool?

When faced with the question, the manger called to advise that she was not sure how to proceed. While administrative regulations require a doctor's letter stating that no public health or safety risk was posed by the patient's use of the pool, I consulted with HUD before announcing the management policy.

Finally

All the community owner wants is to know what the law is! What we do know is certain rules, certain practices reflecting what the law is not. But it is grossly unfair to relegate the duty to set standards on management. Having read this article, can you now, safely amend your rules to impose such a rule? No. No attorney can give an absolute assurance that such a rule will be sustained until ruled valid in a court. Until a court actually rules on the validity of the rule, or HUD or DFEH offers guidance on their interpretation of the rule, there can be no assurance of what an will not be permitted in developing age-restrictive rules and regulations. The best policy is to eliminate any and all age restrictive rules and regulations to avoid FHA claims.

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

Terry Dowdall has specialized in manufactured home communities' law since 1978. His firm, Dowdall Law Office, APC is located in Orange County and Sacramento, with a practice limited exclusively to the manufactured housing industry. Mr. Dowdall serves as a legal advisor on WMA's Legislative Committee and has authored publications for the Continuing Legal Education of the State Bar. He is a frequent contributor to the WMA Reporter and facilitator at WMA educational seminars. He can be reached at 714-532-2222 (Orange) or 916-444-0777 (Sacramento).

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools – drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures – CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[2] Municipal curfew regulations abound which restrict children. Los Angeles is typical. No one under 18 years of age is permitted in public places during school hours (" ... present in or upon the public streets, ... or any place open to the public during the hours of 8:30 am and 1:30 pm"). L.A.M.C. 45.04. The same restrictions apply after 10 pm. ("... any minor under the age of eighteen years to be present in or upon any public street, ... between the hours of 10:00 pm on any day and sunrise of the immediately following day; ...."). L.A.M.C. 45.03. Regulations for pool halls E.g. 17 (Midland Mi. Mun. Code Sec. 15-34) and 18 (1063-B. Pool halls. Public Laws of Maine) year age requirement), are commonly promulgated for the health and safety concerns for minors. It is unsafe for a park owner to rely on local or state laws in this respect in drafting rules and regulations.

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic–related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[4] According to the U.S. Products Safety Commission: "The U. S. Consumer Product Safety Commission estimates that between 1985 and 1989, the latest period for which data are available, there were 1,200 amputations of children's fingers because of contact with exercise bikes. Most children were under the age of five. Many of the injuries occurred when the child's fingers touched the moving bike wheel or the chain and sprocket assembly. The Commission is concerned about the severity of injuries to children, especially because the hazard may not be obvious. Therefore, the commission warns parents always to keep children away from exercise bikes. Never use a bike without a chain guard, and when not using the bike, store it where children cannot get to it. Children's fingers can be amputated if they touch moving parts of exercise bike." Prevent Finger Amputations to Children From Exercise Bikes: Safety Alert: CPSC Document #5028.

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality – they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles. 

Industry experts on the panel noted that retaining people who are effective with coworkers and the public is an ongoing process. Periodic employment reviews and training programs are generally well received. Most people want to know how well they are doing and what needs to improve. Coaching by regional managers and outside consultants is critical to recognizing employment and operational issues and correcting them before they cause other problems.

Second "tip" is also simple and can be summarized in one word: Documentation. It is critical that your community have well prepared written rental agreements whether for a long-term or month-to-month tenancy. There are, of course, pros and cons to both forms of tenancy. Certainly, in a rent control jurisdiction, long-term leases are preferred. However, it is well understood that obtaining an economically viable long-term lease can be difficult in rent controlled communities because of the legislative constraints on tenant negotiations. To the extent a local jurisdiction has vacancy control it is critical to pay attention to those opportunities to offer suitable long-term lease agreements so that future rent increases are known by both the resident and the park.

Another form of documentation to consider is arbitration agreements. There are intense debates among lawyers, and even within the industry, about whether or not arbitration is a desirable means of conflict resolution. If arbitration is going to be pursued, however, it is critical that the arbitration agreements reference and be drafted in accordance with the Federal Arbitration Act. While the State of California has an arbitration statute, it is effectively useless in compelling arbitration in most circumstances in a mobilehome park context. Numerous appellate State court decisions, when deciding whether or not arbitration can be compelled under the state arbitration law, are uniform in declining to enforce landlord/tenant arbitration agreements.

Documentation also means due consideration of park rules. Park rules are the functional equivalent of covenants, conditions and restrictions created for residential developments such as condominiums and planned unit developments. California law requires that park/community rules be reasonable and that, of course, is key to any judicial enforcement. Park owners differ as to whether they prefer general rules or more detailed rules. Again, there are pros and cons to each. However, when it comes to enforcement, it is this writer's experience that more particular detailed rules are typically easier to enforce than a more vaguely worded general rule where "reasonable" discretion by the park's resident manager might be seen by a judge as being less objective or personal. The courts in California tend to err on the side of tenants and thus making sure documentation (Rules) are objectively reasonable can greatly aid in their enforcement.

Tip three is getting to know your customer/market. Understanding who wants to live in your park and why it is important to properly serve that segment of the public and the larger "neighborhood community".

Consistent with knowing your market and customer, is knowing your competition. A park's competition might be other manufactured housing communities or, possibly, nearby apartment complexes, duplexes and triplexes in the area. Knowing who is renting and at what price is critical to knowing if your park is offering all that it can at a competitive price.

A fourth issue noted by regional park managers is the need to conduct a thorough park assessment. Many of the larger owners in the industry have an annual reassessment of each community including what potential capital expenses and improvements might be required. An annual or semiannual assessment can be done in conjunction with a documented risk assessment and analysis. Reviewing a community's streets, curbs, gutters and any recreational amenities can help a community be prepared for accidents; weather cause events and the ever present potential for litigation. A proactive system of having maintenance logs and keeping records of what has been repaired, when, and by whom is critical in the event of a simple slip and fall accident or, more significantly, if a "failure to maintain" lawsuit is threatened. In California failure to maintain allegations are routinely made against many communities that, from all objective criteria, are well-maintained and are highly desirable places to live.

Capital improvement and risk analysis assessments also lead to insight as to how a community is evolving. Is there a plan for replacing or improving the current housing stock? To the extent the park has the ability to help renovate or replace older functionally obsolete housing is a plan being considered. In some areas of California, the options of potential closure or conversion to a resident owned community are worthy of discussion. In rent controlled communities it might be prudent to have park owned homes so as realize appropriate revenue from the park.

One final tip: manage your revenue properly. Successful park operations need to follow and have a well-defined timeframe and process for rent collections. How rents are collected, managed and deposited is critical to cash flow. An annual review of the community to understand whether reserved parking or storage facilities should be provided, for a fee, should be considered. A number of communities have added solar panels to parking areas that generate revenue and help offset electricity costs in the park. Whether or not the park accepts electronic payments and how it processes resident checks can be critical to cash management. Knowing when and where funds are spent is ultimately the reason that the investment is either successful or not.

Thanks to Mindy Parish from Hometown America and Tom Pacelli from J&H Management for their participation and insight as to how operations for community owners can be managed proactively and efficiently.

Bill Dahlin is a partner with the Southern California law firm of Hart King and a leader in the firm's Manufactured Housing Industry Practice Group. He can be reached at 714-432-8700, 714-619-7084 (direct dial) or bdahlin@hartkinglaw.com.

By Terry R. Dowdall, Esq.

The federal Fair Housing Amendments Act (FHAA) of 1988 created a new protected class of "familial status." In California, the federal courts have addressed these requirements by ruling that "all age" communities may not discriminate against children, no more than management can discriminate against any other protected class. This article is addressed to the need for continuing concerns over rule and regulation content and enforcement. This guidance comes from a case brought against Plaza Mobile Estates, defended by this office.

The FHAA

In 1988, Congress amended the Fair Housing Act (FHA) to prohibit not just discrimination on the basis of race, color, sex, religion, disability, or national origin, but also included familial status discrimination. Familial status is defined as " one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals."

Among other provisions, it is unlawful:

"To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ..."

Thus, a restriction on access or use of common facilities and amenities bases on age of a child (familial status) is a violation of the FHAA, absent compelling business necessity. Any such rule must be proved to be the least restrictive means to achieving a health and safety justification. What does this legalese mean to the community owner in practical terms? A full-blown trial, risks of heavy penalties, damages, and attorney's fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case depends on the facts and surrounding circumstances. In other words, each case is a test-case. In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

Children are as protected as any other protected class. Thus, a simple way to test a rule for FHA compliance is this: insert any other protected class in the place of "children" when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is "all children under 14 years of age must be accompanied by an adult resident when in the pool area." Then, how does this sound: "All Methodists must be accompanied by an adult resident ...." Obviously, such a rule is patently violative of the FHA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference, (e.g. "... gosh, if I had my druthers, I would rather not rent to families"). Another issue is use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or

national origin, (example, in an area overwhelmingly populated by non-English speakers, advertising only in English language publications). Other violations will be found where there are ads or statements made regarding applicants, including: "mature person;" stating an aversion to "families with children" or "teenagers in the building;" advertisements stating non more than "one child;" or, stating that the community owner does not "rent to children." Posting "Adult Community: at the entrance to a non-exempt community also violates the FHAA. Use of the word "adult" without more, constitutes a violation of the FHAA. There are no such thins as adult manufactured home communities, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The various rules cited by the courts as impermissibly restricting access or denying the use of the communities' facilities and/or areas on the basis of age, included the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implanting regulations and judicial and administrative interpretations) be promptly consulted.

• Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
• Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
• Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
• Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
• Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
• Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
• When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
• Use of the billiards room was restricted to residents over eighteen (18) years old;
• Use of the spa was prohibited to children under eighteen (18) years old;
• Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
• Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
• Parent or resident child or resident host must accompany children at all times in the pool or pool area.
• Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
• No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
• No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
• At 2 p.m. children are to be out of the pool area;
• Children are not to walk around the community without adult supervision;
• Minors under sixteen (16) years old are not permitted in the therapeutic pool;
• For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
• Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

The court held that these rules were not based on compelling business necessity and did not represent the least restrictive intrusions on familial status rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney's fees and costs for the private plaintiffs.

While the action had been brought as a class claim (in which all of possibly thousands of affected residents could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court's comments regarding the invalidation of these rules is telling and troubling. The court stated the age-restrictive rules were facially discriminatory. In other words, no matter how administered, the rules were invalid as drafted. Even if never enforced , such rules might dissuade a prospective applicant from applying for tenancy. These rules "...treat children, and thus, families with children differently and less favorably than adults-only households." "Describ[ing] parks as 'adult' parks are clear examples of illegal steering. Although they are not outright refusals to sell or rent or families with children, they indicate a preference for adults only and certainly discourage families with children from applying."

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

The absolute prohibitions include those rules that (1) prohibit all children under 18 (or 21) years old from using the billiard room and from riding bicycles, (2) prohibit all children under 16 (or 18) years old from using the therapeutic pool, (3) prohibit all children under 14 (or 18) years old from using the sauna or Jacuzzi, (4) require all children under 8 years old to be confined to rear fenced yard of family residence, and (5) prohibit all children from playing on community streets and any other common areas.

The court held that absolute prohibitions such as the foregoing are illegal. The regulations are not the least restrictive means to achieve health and safety objectives ("...prohibiting all 'children' from playing in common areas ... cannot be justified"). The same applies with the billiard room ("... it is unclear how a 17-year-old's access to a billiard room is any more hazardous to ... health or safety that a 22-year-old's access").

Supervision restrictions

The fundamental premise adopted by the court is that "[A]ny concerns that defendants may have are not necessarily linked to age, and any concerns about problem behavior can be address with the use of rules." Thus, the court invalidated blanket prohibitions of all 15-year-olds from using the therapeutic pool and all 13-year-olds from using the sauna or Jacuzzi

In certain instances adult supervision might less restrictively advance health and safety concerns ("assuming arguendo that defendants' concerns were more logically linked to the age restrictions, requiring adult supervision rather than imposing an absolute ban is clearly a less restrictive means ..."). But where to set the limit is uncertain. California regulations state:

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning – No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

Based on the Plaza Mobile Estates decision, it is needlessly legally risky to impose any supervision requirement. Clearly, a 14 year age limit for an adult supervision is not enforceable, not legal, and constitutes a violation of the FHA, despite former administrative decisions suggesting the contrary and California regulations cited above. Yet, the need for an age limit is strikingly clear. The same rule applies to use of spas and whirlpools. Certainly an adult supervision requirement should be reasonable[1], but eh court has ruled that such concerns are fro the parents, not the management.

A few apparently unassailable precepts

Given that this case raises many more questions than it answers, the ability to promulgate and rely on age-restrictive rules for access and supervision are certainly less than a matter of clarity. While the previous rulings concerning the enforceability of age-restrictive rules are in some doubt, a few precepts can be stated with some reliability. The first is that an outright prohibition of use or access to any facility or amenity cannot be allowed. Setting up selected hours for usage of a facility of amenity cannot be allowed. Less certain is the ability to promulgate rules requiring adult supervision of children of varying ages for use of facilities or amenities. It would appear that no supervision can be mandated for areas such as clubhouse, billiard room, library or common areas.

Establishing minimum age requirements for supervision: A foray into the uncertain

The "14 and under" requirement of California regulations for pool supervision is a should not a must provision. Hence, management cannot require supervision of 14 years of age and under. The only clearly legal position is not to require supervision, and let it be for the parents to take personal accountability and responsibility for their children. The court makes this statement:

"... there is nothing magical about the age 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement."

The courts have intervened on occasion to require discrimination against children for their own good and government does so all the time. For example, you cannot vote until you are 18, drink alcohol until you are 21, cannot drive until you are 16.[2] However, housing providers subject to the FHA may not rely on or use the same governmentally-established restrictions in developing their rules and regulations despite the dangers posed by the common area facilities.

Another example: Pedestrian injuries are the second greatest cause of harm to children from five to 14 years of age. See the National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997.[3] However, it is illegal to have a rule and regulations which states that "children are not to walk around the community without adult supervision."

Is it unreasonable to require adult supervision within the common areas of a manufactured home community? It would seem that such a rule is reasonable. However, for a community owner, such a rule violates the FHA. On the other hand the Consumer Products safety Commission urges supervision of children while on a playground for example (Consumer Product Safety Commission, Public Playground Safety Checklist, CPSC Document #327: "10. Carefully supervised children on playgrounds to make sure they're safe"). The federal law states that the parents are responsible for their children, not the management.

Previously sustained rules

The courts have previously allowed the following rules. This information may be largely historical at this juncture, for it remains unclear whether or not they remain viable in light of the Plaza Mobile Estates decision (these rules were sustained under the previous "reasonableness" test, not the "compelling interest" basis test):

1. Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
2. A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
3. Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
4. In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine – in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
5. One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

However, it is too much to criticize or impugn the court for adhering to the letter of the law, and not legislating by "judicial fiat." The court interprets what the law is and does not legislate. That is the job of Congress and more pointedly in this case HUD (in its rule-making powers). The FHA prohibits discrimination, period. The federal law makes NO exceptions; exceptions to familial status rights is the job of HUD. It is not the court's duty. The court is not the Legislature.

The need for uniform guidelines to inform the housing providers of permissible restrictions

HUD should provide guidance for housing providers and establish bright line tests for common sense age-restrictive rules. HUD should defer to other legislative judgments made for child protection by allowing community owners to replicate existing laws in their rules and regulations. Model regulations for protection of the young could be published. HUD could establish a rule pre-approval procedure.

Community owners just want to comply with the law and provide reasonable requirements for protection of children. But now, even experienced lawyers cannot intelligibly predict the enforceability of any age-restrictive rules. At this time, attaining any ascribed legitimacy of a rule only follows after an expensive legal defense with a heavy burden of proof requiring compelling business necessity. A conciliation agreement binds the complainant. If another resident complains the next day, the conciliation agreement is worthless as a defense to the rule. This is an inconceivably inefficient manner of testing rule validity. The costs to business in such concerns vastly outweigh the benefit to be achieved. The cost to the consumer in spreading the expense of this exercise could be largely obviated if the housing provider had some guidance in defining acceptable rules for promotion of health and safety. The suggestion of administering proficiency tests is a null and void concept. The liability for negligently administering such tests, seeking and paying for qualified testers, and then excluding the non-proficient residents will not be pursued by a single housing provider.

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service – disseminating information and facts – not discriminating against children.[5]

You may also consider consulting with HUD in advance of amending rules and regulations. IF HUD even informally opines that a proposed policy is not defensible, or that no comment can be offered, at least the community owner can better assess the risk faced with a new rule and regulation. For example, if a resident complains that a particular resident who has open sores due to infection with the AIDS virus desires to use the swimming pool, can the management require that resident to stay out of the pool?

When faced with the question, the manger called to advise that she was not sure how to proceed. While administrative regulations require a doctor's letter stating that no public health or safety risk was posed by the patient's use of the pool, I consulted with HUD before announcing the management policy.

Finally

All the community owner wants is to know what the law is! What we do know is certain rules, certain practices reflecting what the law is not. But it is grossly unfair to relegate the duty to set standards on management. Having read this article, can you now, safely amend your rules to impose such a rule? No. No attorney can give an absolute assurance that such a rule will be sustained until ruled valid in a court. Until a court actually rules on the validity of the rule, or HUD or DFEH offers guidance on their interpretation of the rule, there can be no assurance of what an will not be permitted in developing age-restrictive rules and regulations. The best policy is to eliminate any and all age restrictive rules and regulations to avoid FHA claims.

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

Terry Dowdall has specialized in manufactured home communities' law since 1978. His firm, Dowdall Law Office, APC is located in Orange County and Sacramento, with a practice limited exclusively to the manufactured housing industry. Mr. Dowdall serves as a legal advisor on WMA's Legislative Committee and has authored publications for the Continuing Legal Education of the State Bar. He is a frequent contributor to the WMA Reporter and facilitator at WMA educational seminars. He can be reached at 714-532-2222 (Orange) or 916-444-0777 (Sacramento).

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools – drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures – CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[2] Municipal curfew regulations abound which restrict children. Los Angeles is typical. No one under 18 years of age is permitted in public places during school hours (" ... present in or upon the public streets, ... or any place open to the public during the hours of 8:30 am and 1:30 pm"). L.A.M.C. 45.04. The same restrictions apply after 10 pm. ("... any minor under the age of eighteen years to be present in or upon any public street, ... between the hours of 10:00 pm on any day and sunrise of the immediately following day; ...."). L.A.M.C. 45.03. Regulations for pool halls E.g. 17 (Midland Mi. Mun. Code Sec. 15-34) and 18 (1063-B. Pool halls. Public Laws of Maine) year age requirement), are commonly promulgated for the health and safety concerns for minors. It is unsafe for a park owner to rely on local or state laws in this respect in drafting rules and regulations.

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic–related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[4] According to the U.S. Products Safety Commission: "The U. S. Consumer Product Safety Commission estimates that between 1985 and 1989, the latest period for which data are available, there were 1,200 amputations of children's fingers because of contact with exercise bikes. Most children were under the age of five. Many of the injuries occurred when the child's fingers touched the moving bike wheel or the chain and sprocket assembly. The Commission is concerned about the severity of injuries to children, especially because the hazard may not be obvious. Therefore, the commission warns parents always to keep children away from exercise bikes. Never use a bike without a chain guard, and when not using the bike, store it where children cannot get to it. Children's fingers can be amputated if they touch moving parts of exercise bike." Prevent Finger Amputations to Children From Exercise Bikes: Safety Alert: CPSC Document #5028.

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality – they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles.