Sunday, February 12, 2017

Lot-Leasing Homeowners In 12-Unit Mobile Home Park Freeze Annual Rent Increases By Buying Out Motivated, Retirement-Minded Landlord; Assistance From Non-Profit Groups Used To Orgainize Residents, Conduct Pre-Purchase Feasibility Study, Score Needed Financing

In Brandon, Vermont, VTDigger reports:
  • It’s easy to miss Triangle Court mobile home park on Route 7 south of Brandon village. The 12-unit development has few distinguishing features. There’s no sign to greet you. Even Triangle Court Road, a cul-de-sac that abuts dozens of acres of woodland to the east, is unmarked.

    In many respects, Triangle Court is like most other mobile home parks in Vermont — with one crucial difference. In April residents of the park decided to buy the property and turn it into a cooperative.

    It wasn’t the first time Triangle Court had been put on the market. Residents had expressed an interest in purchasing the park over the years, but had never been able to come up with the resources to do so. And the would-be seller, Beverly Lent, who bought the land with her husband more than 30 years ago, was unable to find an outside buyer.

    So she stayed on, and each year raised the lot rent 4 percent. Under state law a mobile home park owner can increase the rent by that amount without providing justification.

    Jerry Calsetta, a plumber who purchased a home in Triangle Court 18 years ago, said that when he moved in lot rents were $200. The year before it became community-owned, rents were nearly twice that.

    “By owning, we determine what we want to charge for rent,” Calsetta said.

    In the first year of community ownership lot rents went down about $13. But the co-op model is about more than saving money, Calsetta said. It gives residents the power to manage their own affairs and make improvements to the development. Perhaps most important, it guarantees that the property won’t be sold and liquidated without full membership approval.

    Though a new owner would be required by state law to give 18 months’ notice before closing the park, residents would have no way of fighting or reversing that decision.

    “They don’t see that risk generally until it’s too late,” said Paul Bradley, founding president of Resident Owned Communities, USA.(1) “Those are the worst phone calls of all.”

    ‘A BIG LEAP OF FAITH’

    Vermont has some protections in place for residents of mobile home parks. Private owners wanting to sell a park have to notify the state, which gives residents 45 days to decide if they want to pursue cooperative ownership. Residents then have an opportunity to assess whether there’s enough interest among members and financial support to buy the property.

    “If they’re not invested as a group, it’s not going to work,” said Annik Paul, of the Cooperative Development Institute, a group that assists residents interested in cooperative ownership.

    Jonathan Bond, director of the mobile home program at the Champlain Valley Office of Economic Opportunity, said resident ownership is not always met with enthusiasm. “It’s a big leap of faith residents take,” Bond said. “In some instances there may not be anyone living in the park who is comfortable stepping up in that way.”

    However, if a majority of the members of a community agree to move forward, they are given 120 days to evaluate the condition of the property and make a final decision.

    In this case the Cooperative Development Institute(2) secured $10,000 in grant money to conduct an engineering assessment of the water, sewer and electrical systems. Meanwhile, residents of the park had a series of meetings to make sure everyone was on board.

    Calsetta said there were a lot of questions and people were initially skeptical, but in the end all the tenant homeowners agreed to participate. (A mental health agency that occupied a lot declined to participate and has vacated the property. Lent, the seller, has since died.)

    The membership fee is $100 and refundable if a homeowner decides to sell. Any new residents are required to become members.

    According to the CDI’s Paul, there was another buyer in the wings so they had to move quickly. The engineering study showed no major investments in the property were needed, and the CDI was able to secure the loan to buy the property.

    Calsetta, who as board president acknowledged there is a lot of work involved in managing the co-op, said residents have already begun to see the benefits. They plan to improve the gravel road, which hasn’t been upgraded in years. Lot rents may continue to decline. And residents now own the land they live on.

    “We want everybody to feel like this is their home,” Calsetta said. “That they can take pride in ownership.”

    GROWING IN POPULARITY

    Vermont has 11 resident-owned mobile home parks, and nationwide the movement has seen rapid growth. According to ROC USA’s Bradley, there are about 1,000 mobile home park co-ops around the country. ROC USA itself has worked with 195 communities in 14 states. ...
For more, see Mobile home park residents take ownership of their fate.
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(1) ROC USA, LLC is a non-profit organization with a mission of making quality resident ownership possible nationwide by helping lot-leasing mobile home owners form co-operatives to buy their manufactured home communities or “mobile home parks” from their landlords.

(2) Cooperative Development Institute provides direct technical assistance (ie. communication, training, and facilitation) for co-ops of all kinds and at all stages of development throughout New England and New York. Among other programs, one CDI program is designed to assist residents of manufactured homes in New England gain ownership over their communities.

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