We are doing due diligence on a park in Illinois, and to our dismay, we found out that Illinois requires a MHP owner to offer tenants a 24-month lease unless the tenants agree otherwise.
Most of the tenants in the park are on a 24-month lease agreement. The park currently pays for water. So, I assume that we will not be able to pass the water expense onto the tenants until their current leases run out?
Furthermore, I think that this 24-month lease law takes away many of the powers that MHP owners have in a month-to-month agreement.
Could you please comment on this law? What are the major disadvantages of buying a park in Illinois? I guess we should be particularly careful to buy a park in Illinois?
Contact your MHA in IL and ask them. You often can meter the water, you just have to lower the rent by a like amount, then renew their lease when it expires.
Also, in FL since the park I bought was all POH’s, it was NOT considered a MHP so I don’t have to follow any rules or laws that regulate MHP’s until a certain percentage of the homes are sold. Then all the BS laws kick in, so I plan on having all of those issues cleared up before I reach that percentage. Stuff like billing back trash, lawn care, taxes, etc.
Oh, I know someone, not me of course, that when they bought their park they told everyone new owner, new lease, and the tenants were asked to sign the new lease when they came in to pay the rent. This new lease contained a clause that stated that the owner reserved the right to bill back for trash, water, etc.
I’m told that pretty much everyone signed the new lease without a hassle.
You have to offer it. You can also offer then a 12 month or month to month at the same time or a month to month. It just says 24 months has to be an option. I think you might find some of the less desirable will go for the shorter terms.There’s also stuff in there about specifying your increase in year two, although you can use a formula for that increase, and it can say not to exceed $X, I believe. Did my tenants have any idea? No. Has anyone ever checked that this was done? No.
You can still evict for non-payment or not following your park rules.
@Coach62… quick question…in Florida, MHP owners aren’t allowed to offer rental agreements for less than one year so that means no month to months right?
I’m not sure,but I think you’re correct. Call the FMHA and ask. Their attorney loves to ramble on and impress you by quoting codes and using 1,000 words when 10 will do.
I am not yet considered a MHP since I still own most of the homes. Once I cross a certain threshold then I’m considered a MHP and will have to follow the rules.
The attny explained it to me but he’s so impressed with himself that he’s really hard to follow when he talks to you.