Things You Need to Know

Once upon a time in the distant past, MHC's were passive investments with the rules of the road (aka government intervention and legal case law) allowing for year-in-year-out doing-business- as-usual. Fast forward to 2010, and the changes in the regulatory landscape have made it imperative for owners/operators to stay current with the lawful ways to conduct business. If you self-manage your community and/or leave the operation to an onsite manager you must stay up to date with these changes. All this involves your money. Staying diligently informed in your approach to your investment will allow you to prevail without spending a fortune!

Annual Rental Increases

This case has altered the fundamental way we raise rents...and if you don't change your business practices to be consistent with this court ruling you could pay thousands of dollars...Got your attention? This case evolved when a MHC Owner issued all of his tenants annual rent increases on the same anniversary date, a practice we all used to do. A lawsuit was filed by a tenants group questioning the legality of the annual lease agreement. The leases had a sentence reverting the terms of the agreement to a month to month after the expiration of the initial one year term. The Owner with the help of MHCW successfully argued the case in King Co. Superior Court; a Court of Appeals reversed the ruling. The issue is now resolved but not in your favor! What does all this mean to you as an Owner? A: The timing for your rent raises should be on the anniversary date of when the tenant moved in B: The Tenants group ruling was deemed correct by the court, and the rent raises were illegal. Owners could be liable for returning the rent increases. If you haven't already done so, do a Lease audit ensuring they are consistent with this new ruling, whether a Resident is on a One Year Agreement, Month-to-Month, have they signed a Waiver and making sure your future rent increases are issued in a legal manner.

MHC Zoning Issues

In various Cities and Counties around the country there is a regulatory virus spreading that limits the property rights of community owners to sell their properties. In the past round of housing and commercial development, developers were in a frenzy looking for large tracts of land. On occasion, this resulted in communities selling for a premium to investors who would close the MHC changing the land to a use consistent with the zoning contemplated by the county/city comprehensive plan. In an effort to slow this trend, government agencies are enacting various regulations that could be construed as an illegal taking of these MHC properties. It is not politically expedient for government to allow market forces to regulate the closure of communities. Therefore new overlays of mandatory MHC zoning, moratoria on closures and restrictions on how you sell your community (even if it is to remain in its present use) are being implemented. These “fixes” to society's problem do NOT address the need for some MHC's to close because of functional/economic/geographic obsolescence. This false imposition on Owners is not consistent with underlying constitutional property rights.

County Required Public Sewer Fees

A ruling in late 2008 removed the requirement of Owners to be charged capital sewer fees for Communities with fully functioning septic systems. The County required this fee be charged regardless on the merit or specifics of the situation. Through legal action brought by an Owner and the State trade organization this assessment was removed.