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Arizona
In June of 2023 in our 55+ mobile home park, our community manager, without notice, raised the “turnover” lot rents by a substantial amount. This resulted in all the senior residents/homeowners losing thousands of dollars of equity in their homes.
This news was quite shocking to us and many of the residents. We decided to have a meeting to discuss this situation to see if we could find a solution. We formed a committee of 3 core residents that wanted to fight this issue by challenging our park owner. One of the committee members was responsible for the technology end as well as conducted most of the research that consisted of a deep dive into our mobile park owners, the mobile home park industry, and the Arizona Mobile Home Parks Residential Landlord and Tenant Act. Another committee member was a seasoned licensed realtor and was responsible for the market data for our surrounding residential single-family homes and 55 + mobile home parks. Our third committee member served as a secretary. Together, we learned a ton of useful information and facts. Four major facts that we discovered are the following.
First, there is a term in the industry called “turn-over rent”. Turn-over rents are directly responsible for equity loss for a seller. This happens because the cost of lot rent to a new buyer is more than the cost of lot rent for the seller. When turn-over rent is in effect the seller will have to reduce the price of their home and devalue it to offset the cost for the new buyer so they can afford a mortgage and the lot rent. The rule of thumb is that for every $10.00 of difference in the turn-over lot rent, it is equal to $1000.00 of equity loss for the seller.
Second, the residents that want or need to continue living in their mobile home park are faced with annual lot rent increases. In Arizona, it is legal for a mobile home park owner to raise the annual lot rent for current tenants to whatever they choose because rent is preempted by the state. In addition, there is no rent cap, rent control or rent stabilization laws in place that protect anyone, let alone seniors in mobile home parks. Residents are not informed about what percentage their lot rent is being increased to until 90 days before it takes effect. Ninety days is not enough time to plan a move if it is necessary. They never know what year they will not be able to afford their lot rent and possibly lose their home/s. Third, for those that do not plan on ever selling their home, it will continue to depreciate due to all the homes that do sell at a lower price along with the higher costs for lot rents for all those new buyers. Because of the continual depreciation, homeowners will eventually lose so much equity in their homes that they become faced with impossible decisions. If they can afford to move, they take a substantial financial loss from the low price they must sell their homes for.
If they are on a fixed income, have no relatives to live with, have no savings to rely on, and are ill or disabled and cannot work, moving is not an option. They are literally trapped and forced to find a way to pay annual lot rent increases knowing that the increases are always higher than the annual cost of living. In this situation it’s just a matter of time until they are “priced out” of living out their retired years in their retirement communities and might someday face homelessness.
Lastly, we discovered that the property management company that manages our park is really a private equity firm that owns our park. We informed our residents that what has happened in our park is not only common business practices but is the business model for corporate, private equity firms, and investors of mobile home park owners. We presented this research information to our community. This news triggered immediate stress, anxiety, and depression for many of our residents. Some put their homes up for sale immediately. For others it caused many to question if they could afford to live here, and for how long. For those living on a fixed income, like many seniors do, they had to determine how far their fixed income could sustain them and allow them to afford their annual lot rent increases, groceries, medications, utilities, etc., since their annual cost of living increase is always less than their annual lot rent increase.
Armed with this new knowledge we felt that this was unacceptable. We spoke to the COO of the property management company and expressed our concerns. He insisted that the community park manager raised the turn-over lot rents to reflect the current market value in our city. We asked what cities we were being compared to and he told us. We informed him that we are not in the same market as our surrounding cities that they are comparing us to. He asked us to gather data that could prove otherwise, and he would reconsider the turn-over rent increase. We continued to research, gather facts and had a professional market report compiled that compared our market values with the surrounding mobile home parks; market values that we were compared to. We sent him a copy of our facts and information gathered along with our market research report. We then requested a meeting with him. He agreed to a Zoom meeting. By the time this meeting was scheduled we had 3 more residents join our committee and two of the three attended this Zoom meeting with us. Our meeting consisted of the COO and his upper management team. We presented ourselves in a professional manner and each took turns with a testimonial. There was one more fact that was discovered later so it was not sent in the package that was sent to the COO. Because a resident in our park lost the sale of her home due to the unexpected turn-over rent increase, she corresponded via email with whom she thought was the property management company. She expressed her concerns and asked for the lot rent to be decreased so she could sell her home. She was informed that once a lot rent is increased it cannot be decreased. She shared that information with our committee. That left us with one more factor to present to them. During the deep dive of research into the Arizona Mobile Home Parks Residential Landlord and Tenant Act a statute was discovered. The law is in place that the landlord may increase or decrease the total rent. We could only assume that they were not aware of this law judging by their facial expressions upon hearing this fact. As the meeting was ending the COO announced that he was impressed with us because we did our homework. We asked for a timeline as to when we would have an answer, and he stated that it would be less than two weeks. We received an email from the COO within the timeline promised. Thankfully, they took the time to compare our data to theirs and reversed the recent turn-over lot rent increase back to the previous turn-over lot rent amount. The community was fired. Our small committee and many residents were elated. Our residents in our mobile home park community have been relieved of the burden of stress, anxiety, and depression over this unfortunate situation in our mobile home park.
If it weren’t for our inherited community manager and the poor decisions that she made while she was employed here, this situation may never have happened. She was greatly unpopular and barely tolerable. But when she decided to raise our turn-over rents to an unconscionable rate resulting in such a heavy financial loss to our community residents, a few of us decided to act even though none of us knew how to solve our less-than-ideal circumstances.
Special thanks to the many people involved for many years that have fought to have laws enacted in Arizona that are specific for mobile home park residents’ rights and responsibilities and what legal obligations park owners have to their tenants. We are deeply grateful.
Due to this experience and the research completed, our committee realized there are many more issues to deal with when living in a 55+ mobile home park. However, we did not have the same common goals of what type of work we wanted to do moving forward so we separated.
The remaining member has decided to take Manufactured Home Residents for Change (MHR4C) a step further and is filing for a 501c4 nonprofit status and are extending our reach to help seniors across the United States.
https://www.mhr4c.com/
Sign their petition for change across the U.S.
In June of 2023 in our 55+ mobile home park, our community manager, without notice, raised the “turnover” lot rents by a substantial amount. This resulted in all the senior residents/homeowners losing thousands of dollars of equity in their homes.
This news was quite shocking to us and many of the residents. We decided to have a meeting to discuss this situation to see if we could find a solution. We formed a committee of 3 core residents that wanted to fight this issue by challenging our park owner. One of the committee members was responsible for the technology end as well as conducted most of the research that consisted of a deep dive into our mobile park owners, the mobile home park industry, and the Arizona Mobile Home Parks Residential Landlord and Tenant Act. Another committee member was a seasoned licensed realtor and was responsible for the market data for our surrounding residential single-family homes and 55 + mobile home parks. Our third committee member served as a secretary. Together, we learned a ton of useful information and facts. Four major facts that we discovered are the following.
First, there is a term in the industry called “turn-over rent”. Turn-over rents are directly responsible for equity loss for a seller. This happens because the cost of lot rent to a new buyer is more than the cost of lot rent for the seller. When turn-over rent is in effect the seller will have to reduce the price of their home and devalue it to offset the cost for the new buyer so they can afford a mortgage and the lot rent. The rule of thumb is that for every $10.00 of difference in the turn-over lot rent, it is equal to $1000.00 of equity loss for the seller.
Second, the residents that want or need to continue living in their mobile home park are faced with annual lot rent increases. In Arizona, it is legal for a mobile home park owner to raise the annual lot rent for current tenants to whatever they choose because rent is preempted by the state. In addition, there is no rent cap, rent control or rent stabilization laws in place that protect anyone, let alone seniors in mobile home parks. Residents are not informed about what percentage their lot rent is being increased to until 90 days before it takes effect. Ninety days is not enough time to plan a move if it is necessary. They never know what year they will not be able to afford their lot rent and possibly lose their home/s. Third, for those that do not plan on ever selling their home, it will continue to depreciate due to all the homes that do sell at a lower price along with the higher costs for lot rents for all those new buyers. Because of the continual depreciation, homeowners will eventually lose so much equity in their homes that they become faced with impossible decisions. If they can afford to move, they take a substantial financial loss from the low price they must sell their homes for.
If they are on a fixed income, have no relatives to live with, have no savings to rely on, and are ill or disabled and cannot work, moving is not an option. They are literally trapped and forced to find a way to pay annual lot rent increases knowing that the increases are always higher than the annual cost of living. In this situation it’s just a matter of time until they are “priced out” of living out their retired years in their retirement communities and might someday face homelessness.
Lastly, we discovered that the property management company that manages our park is really a private equity firm that owns our park. We informed our residents that what has happened in our park is not only common business practices but is the business model for corporate, private equity firms, and investors of mobile home park owners. We presented this research information to our community. This news triggered immediate stress, anxiety, and depression for many of our residents. Some put their homes up for sale immediately. For others it caused many to question if they could afford to live here, and for how long. For those living on a fixed income, like many seniors do, they had to determine how far their fixed income could sustain them and allow them to afford their annual lot rent increases, groceries, medications, utilities, etc., since their annual cost of living increase is always less than their annual lot rent increase.
Armed with this new knowledge we felt that this was unacceptable. We spoke to the COO of the property management company and expressed our concerns. He insisted that the community park manager raised the turn-over lot rents to reflect the current market value in our city. We asked what cities we were being compared to and he told us. We informed him that we are not in the same market as our surrounding cities that they are comparing us to. He asked us to gather data that could prove otherwise, and he would reconsider the turn-over rent increase. We continued to research, gather facts and had a professional market report compiled that compared our market values with the surrounding mobile home parks; market values that we were compared to. We sent him a copy of our facts and information gathered along with our market research report. We then requested a meeting with him. He agreed to a Zoom meeting. By the time this meeting was scheduled we had 3 more residents join our committee and two of the three attended this Zoom meeting with us. Our meeting consisted of the COO and his upper management team. We presented ourselves in a professional manner and each took turns with a testimonial. There was one more fact that was discovered later so it was not sent in the package that was sent to the COO. Because a resident in our park lost the sale of her home due to the unexpected turn-over rent increase, she corresponded via email with whom she thought was the property management company. She expressed her concerns and asked for the lot rent to be decreased so she could sell her home. She was informed that once a lot rent is increased it cannot be decreased. She shared that information with our committee. That left us with one more factor to present to them. During the deep dive of research into the Arizona Mobile Home Parks Residential Landlord and Tenant Act a statute was discovered. The law is in place that the landlord may increase or decrease the total rent. We could only assume that they were not aware of this law judging by their facial expressions upon hearing this fact. As the meeting was ending the COO announced that he was impressed with us because we did our homework. We asked for a timeline as to when we would have an answer, and he stated that it would be less than two weeks. We received an email from the COO within the timeline promised. Thankfully, they took the time to compare our data to theirs and reversed the recent turn-over lot rent increase back to the previous turn-over lot rent amount. The community was fired. Our small committee and many residents were elated. Our residents in our mobile home park community have been relieved of the burden of stress, anxiety, and depression over this unfortunate situation in our mobile home park.
If it weren’t for our inherited community manager and the poor decisions that she made while she was employed here, this situation may never have happened. She was greatly unpopular and barely tolerable. But when she decided to raise our turn-over rents to an unconscionable rate resulting in such a heavy financial loss to our community residents, a few of us decided to act even though none of us knew how to solve our less-than-ideal circumstances.
Special thanks to the many people involved for many years that have fought to have laws enacted in Arizona that are specific for mobile home park residents’ rights and responsibilities and what legal obligations park owners have to their tenants. We are deeply grateful.
Due to this experience and the research completed, our committee realized there are many more issues to deal with when living in a 55+ mobile home park. However, we did not have the same common goals of what type of work we wanted to do moving forward so we separated.
The remaining member has decided to take Manufactured Home Residents for Change (MHR4C) a step further and is filing for a 501c4 nonprofit status and are extending our reach to help seniors across the United States.
https://www.mhr4c.com/
Sign their petition for change across the U.S.