Park located in Arkansas


Hello All,

So i have a question that I would appreciate some guidance on. The park that I am debating putting an offer in on is located in Arkansas. I am unfamiliar with the area, but the current owner tells me he has lot rent broken up into two separate fees, lot rent and then water and sewer. He charges a flat amount for the water and sewer, but it is not based on what the city charges him (the park is master metered and submetered to the tenants) and says that the city doesn’t regulate how residents are billed back so he can charge whatever he wants. I am very skeptical about this, but has anyone seen this before in Arkansas? Secondly, if his prices are broken up this way, when I go to get a loan how will the bank determine how much it will finance? Will it be lot rent+utilities, or just lot rent only?




The bank will finance based on the financial performance, which should materially be based on the revenue from lot rent minus expenses. If the Seller is making a killing on the utilities that’s a red flag. In a lot of states flat fee submetering is not allowed - should be RUBS or meter readings.

While a quick Google search did not return anything on Arkansas submetering laws, you should consult with an attorney after you get the park under contract. Some states don’t have submetering laws, but they do have laws against outrageous fees for services - which this could apply as a means to regulate it.

Good luck!


Well here is something…


@jhutson Thank you so much for your reply. To make sure we are on the same page, if they are charging $150 for lot rent but included in that amount is $30 for water and sewer, will the appraisal go Amount Of Lots X $150 or Amount of lots X $120? I will read more into that article on submetering as well.




I was always under the impression that it was the state that regulates private utilities and not the cities.