MHET publishes a monthly two page newsletter targeted at educating Park residents as well as local Elected Officials.
The newsletter is distributed to MHET Members to copy and distribute to the residents of their parks.
Mobilehome Residency Law
Division 2. Part 2. Chapter 2.5 of the California Civil Code
The California Mobilehome Residency Law, Civil Code Section 798, governs mobile home park management and tenancies and is basically the landlord-tenant law for mobile home parks. Rental/land lease mobile home communities are the most highly regulated rental housing in California. The Mobilehome Residency Law deals with tenant notification, park rules, meetings with the owner, termination of tenancy, transferring the ownership of a home in a park, fees and charges. You can access the California Mobilehome Residency Law on the California Senate website here.
The California Department of Housing and Community Development (HCD) is responsible for inspecting and issuing permits for mobile home parks and the manufactured housing in the parks.
A fee is charged by the state to cover the cost of these services. In some cases, local jurisdictions take over the responsibility for these inspections, but due to the costs, this is rare. The Southern California regional HCD office is located in Riverside and can be reached at 951-782-4420 or at www.hcd.ca.gov
A trailer less than 8 feet wide x 40 feet long is classified as a recreational vehicle and NOT a mobile home. Owners of these trailers/RV’s do not have a right to sell them in place.
A mobile home cannot be required to be removed upon resale if it: 1) is 17 to 20 years old or older, but meets the health, safety and construction standards of state law; and 2) is not in substantially rundown condition or disrepair as determined by the reasonable discretion of management.
Prior to purchasing a mobile home located in a rental park, the prospective buyer must be approved for tenancy in the park. The sale of a mobile home located in a mobile home park is a three-party, not two-party, transaction. The buyer and seller must not only agree to terms on the sale of the home, the buyer must be approved for residency in the park by the park owner/management.
Park management can withhold approval of residency on the basis of: 1) the buyer’s inability to pay the rent and charges of the park and 2) the buyer’s inability to comply with park rules and regulations as indicated by prior tenancies.
The seller of a mobile home and the mobile home park owner must provide the buyer with certain disclosures as outlined in state regulations.
As with other personal property such as cars, airplanes, and boats, the value of a mobile home depreciates as it ages. At least two firms publish information on mobile home values – Kelly Blue Book and the NADA Guide. Their guides offer valuations for both new mobile/manufactured homes located on a sales lot and those in a rental mobile home community. For those sold “in place”, the value of the land where a manufactured home sits drives the price of the home, rather than the structure itself.
For mobile homes in rental communities, there is an added value attributed to a mobile home being sold “in place”, meaning those sold with the expectation that the home will remain on the lot where it currently sits. The extra value comes from the “leasehold” interest the buyer takes over when purchasing a home already in a park. Some mobile home buyers pay thousands over the value of the actual mobile home, simply because it is located in a desirable community.
The location of the park, amenities, and the general appearance/condition of the community are all aspects that can impact the value of a mobile home. Appraisal guides do not factor in the market conditions of a region or the costs associated with living in a particular location or park when assessing values for mobile homes. All of these elements and more come into consideration when a mobile home is sold “in place” in a mobile home park.
As an example, a 40-year-old doublewide mobile home located in a mobile home park by the ocean will sell for more than the same make and model home in a park located inland. In the case of the ocean front mobile home, the purchaser is not paying for the value of the mobile home, but rather is paying a premium to the seller because of the location of the mobile home.
In addition to location, cost of living factors into the sale price for a mobile home. The amount a willing buyer and willing seller agree upon depends on the purchasing power of the prospective homebuyer, specifically their monthly housing budget. For example, a typical mobile home buyer may have a monthly housing budget of $2,000 to cover the space rent, mortgage, and utilities. They are looking at the same make and model of mobile home in two different parks in central Orange County with similar amenities. One community charges $900 a month in space rent, but the sale price for the mobile home is higher. The other park charges $1,500 and has a lower-priced home. The buyer has a choice to pay more of their budget for rent or more for the mortgage.
Some mobile home owners who chose to pay less for the home and more for the rent are upset years later when they are unable to sell their home for as much as the owner of the same home in another park with lower rent. The overall value of the homes are still about the same between the two parks. The difference is that owners can pay more up-front with a higher purchasing cost for the home, or pay smaller amounts in rent incrementally over a long period of time.
Additionally, those buying older mobile homes often pay cash outright. Knowing that this makes the site rent their only housing cost makes the lower priced home more attractive.. Many long-term mobile home park residents only have a monthly rent payment because they own their homes free and clear.
The vast majority of mobile home parks in the Southern California area are owned by private investors running the park as a for-profit business. Mobile home park owners offer to rent land where the mobile home sits and provide utilities, amenities and other services to mobile home owners. The rent prices in each park will vary depending on a variety of issues, including location and amenities.
Although a mobile home owner owns their home, they do not own the land the home sits on or the amenities provided in conjunction with renting the land. The mobile home owner enters into an agreement with the park owner to pay rent for the land and services as well as the cost of the utilities they use each month. As in other forms of rental housing, rental rates increase over time for a variety of reasons including increased costs to run the business, or an increased value in the land and services provided, often referred to as “market rent”. Mobile home park tenants are required to be given a 90-day notice of an increase in rents.
Rents within the same park may vary depending on the terms of the tenancy and lease agreement. Rents for existing residents in a park may vary greatly from the “market rent” charged to new residents moving into the park.
Every mobile home community is unique and rents range widely from community to community. Many factors impact space rent, including the type of ownership, how long the park owner has owned the property, park location, amenities, and lot sizes. When determining rent rates and increases, parks frequently survey regional “market rents” for comparable housing, such as other mobile home parks, apartments, and single-family homes.
As mobile homes age, the likelihood of obtaining mortgage financing decreases. Sometimes the seller will carry back financing, but more often than not, the buyer will pay for the home in cash. There are also a significant number of long-term mobile home owners who paid off their mortgage loans long ago. In both of these instances, the cash buyer and the long-term homeowner, the only housing cost they have is the monthly rent and utilities.
Limiting the amount for rent increases in mobile home parks is a popular idea among some park tenants, and their associations aggressively lobby for rent regulation.
The issue of increasing rents also impacts the “value” of the mobile home. In some markets there is a relationship between the rent and the resale price of homes; the lower the rent, the more the home may sell for.
Mobile home buyers have budgets for housing costs, which includes payments for the mobile home plus rent. The lower the rent payment, the more they can pay for the mobile home. Rent control suppresses rents, keeping them below market value. This transfers the land value from the landowner, who is prevented from charging market rents, to the tenant, who can sell their mobile home for more. Like other business owners, mobile home park owners oppose regulations like rent controls.
All parks are required to offer tenants a 12-month lease. Some parks offer long-term lease agreements that spell out when rent increases will be given and the amount of the increase. A long-term lease is a lease longer than 12 months and may include agreements on change of ownership of the home or the payment of extraordinary costs such as uninsured losses.
The Federal government provides Section 8 housing assistance through local housing authorities. Mobile home owners living in rental parks are eligible to apply for the Section 8 rent subsidies. Information on the administration of the Section 8 program may be obtained by calling the city or housing authority where a park is located.
Wait lists for Section 8 may be several years long.
MHET Rental Assistance Program is designed to assist needy, low income mobile home owners by helping them pay a portion of their rent.
For more information on this program call (949) 380-3311.
Reduced utility rates are available to qualified low-income mobile home park residents under the CARE program.
Prior to July 1, 1980, most mobile homes were taxed by the state like vehicles, using a vehicle license fee (VLF) in lieu of local property taxes. A 1979 update to the law required that new mobile homes sold or manufactured after July 1, 1980 would be taxed as personal property rather than with the vehicle-style VLF. Older, pre-July 1980 homes remain on the VLF unless the owner voluntarily switches the home to the local property tax system. Under current tax law, the county assessor cannot factor in the value of the park land or space when assessing taxes for mobile homes. Hence, the homeowner’s personal property tax on an individual home is a separate tax from the property tax on the park owner’s real estate or park land.
Consumers interested in purchasing manufactured homes should use extreme caution when considering a manufactured home ordered over the Internet or from an out-of-state seller.
California law requires manufactured home salespersons, dealers, and manufacturers doing business in California to be licensed by the California Department of Housing and Community Development (HCD). If a person or company solicits for purchasers of manufactured homes in California by letters, telephone calls, or other direct advertising or communications, that seller may be violating the law because only licensed dealers and salespersons may advertise or solicit in California.
If solicited by an internet or out-of-state solicitor, ask for proof of California licensing. Use HCD’s website or call HCD’s Occupational Licensing Program at (800) 952-8356
The trailers, mobile homes, and manufactured homes are transported to their current location over the roadway on axels and wheels and can be relocated in the same manner. Permits are required and professional companies offer disassembly and reassembly and moving services. The costs to move the home varies depending on the size and type of home and distance moved.
