In my park there seem to have been a lot of private sales between residents prior to our takeover. These were $500 handyman specials - and I have been impressed by some of the interior remodels actually. But others - not so much. Is it legal to build in a new lease clause that states the park has the right to enforce minimum safety/code standards when homes change hands - and if the seller will not/cannot bring their home up to spec then their choice is to either keep paying lot rent or sell it to the park for the same price or less they would have gotten from a private party?
My reasoning is if I buy it for $500 I have the capital and the team to rehab the home - and even if I have to rent-to-own the home, I know that this 1970/80/90 home is now good to go structurally for the next 20 years. Whereas if a resident sells it to another one for $500 I have no idea if the buyer will invest the labor and capital to keep the home in great shape for the long run.
I got to thinking about this because this situation is happening to me right now - one resident wants to move in to another home in the park with her boyfriend. She’s found a buyer for her place - but I’ve now heard that her home has mold and soft floor issues. The buyer is qualified - barely. But if I purchased the home and rehabbed it I could both ensure a higher quality home that will stand the test of time - and get a more qualified buyer. Yes I’d be out some capital but I’d be investing in the long term viability of the homes - and thus the revenue stream.
An employee once asked Sam Walton “why are the stores painted grey on the inside? I think they would sell more if they were a brighter color”. Walton said to the employee “OK, here’s what we’ll do. You paint the walls a different color. Measure the sales for a month. If they are higher than the same month last year, then you’re right. If the sales are the same or lower, paint them back to grey”. The is no substitute for experimentation, and everybody should keep an open mind to trying something new, if it can be accurately measured. If you want to try this method, then why not try it on a home or two? If it works well, then keep on doing it. My guess is that you’re better off not getting involved in homes that you’re not in the chain of title on, but if you want to give that concept a try nobody could fault you for that. A lot of your success or failure will be based on the type of clientele in your park, so your results may not translate well to any other park owner. But what’s important is if it works for you.
Check into your state regulations governing MHCs and landlord rights. Our regulations, and therefor our park rules, include a right of first refusal on all home sales.
When a seller has a accepted offer on their home they are required to inform the community owner. The community owner then has the right of first refusal allow him to either buy the home at the offered amount of pass on the purchase. If the community owner is not interested in owning the home they then screen the potential buyer as usual.