City's new ordinances. Can they?

Recently I posed City changing rules and Frank responded his thoughts and recommended to seek a municipal attorney to speak with the city attorney to try and straighten things up.I have the park under contract with a large earnest money down and just spent 2 days at the park and town doing some due dillegence. I am supposed to close 26th of this month. Today is Sunday and I will seek representation Monday.For your thoughts and opinions this is what I gathered from the manager and city hall: Zoning ordinance

City of ****, TXAdopted March 19, 2007

Ordinance No. O-02-07

Updated may 10, 2013

Approved and Adopted By:

City Council

 Letter received dated March 21, 2013 after a guy moved a single wide into the park and had it set up for 2 months ( a clean newer one at that from the pictures I saw)

 To Whom it May concern,

 Upon a recent inspection of the lots inside your mobile home
park, it was observed that an addition to your park in the form of another HUD
Manufactured Home is being placed at lot # 53. 
This home appears to be a single wide home, which violates the Kaufman
Code of Ordinances, Section 21 defining the Mobile Home (MH) District
Regulations.  As a courtesy, I have
enclosed a copy of this for your review. 
While existing homes in your park are considered to be “grandfathered”
as pre-existing the inception of the pertinent ordinance, newly added homes are
required to comply with the ordinance. 
Any homes replacing homes that were considered “grandfathered” and
removed, must be replaced with HUD manufactured homes that comply with the
ordinance requirements.

 

Section 21.3 of the aforementioned Code outlines “Area
Regulations in Section 21.3E(1) which states: ”All units shall be at least
twenty-five fee(25’) wide (eg ‘double-wide’). As of the effective date of this
ordinance, all single wide units shall be deemed non-comforming and shall not
be brought into the City to occupy an existing vacant lot or to occupy a newly
platted lot.”

 The unit you have placed in lot #53 must be removed from the
park and from City of … city limits immediately.

ZZ_Top, as a SC Real Estate Broker I would recommend getting the Seller to sign an Addendum to your Ratified Contract that gives you more time in your Due Diligence Period and extends your Closing Date.I would also add that you have the ability to walk away from the Deal and get all your Earnest Money back if you find anything that makes you nervous/uneasy during the Due Diligence Period.As far as the City demanding the single wide be removed from the MHP:When we move Mobile Homes into our Mobile Home Park, the City gives their blessings by providing the moving permit.  I would imagine that your City would also have to provide their blessing to move Mobile Homes into your MHP.If this is the case and the City provided a moving permit, they should not have the ability to now ‘demand’ that the single wide be moved out.We wish you the very best!

So- yes the city can demand HUD homes, they can demand the homes be no older than X (say 10 years old or newer from the date of install, they can have square feet requirements etc. They can not require you to do something that would harm the structure- like add a pitched roof or make some modification that would harm the homes engineering. If I were you, I would place a call to the compliance department at the texas department of housing and community affairs. Tell them what the ordinance reads and see if they find it is in violation with the Texas state laws or the HUD laws. Off the cuff, I would say the code is what it is- and fighting it would be a uphill battle unless there is a flaw and they just roll over. City’s say the oddest things… I have a park where the code says a home must be 8 foot back from he rent-able property line. So I marked lines 8 foot into the street- called it parking and added the location to the space lease agreement. Now I can fit 66 foot homes in the lots instead of 58 foot homes. It is hard to understand in Texas, where there are LOTS of rules on setting homes one could be pulled in and set up that was in violation of anything… but odder things have happened.

Kristen,I do not know if they even got a permit from the city to move it in. But the manager said it scared him so he moved it after 2 months. The owner letting things go so I assume he did not care so she says.I have emailed the texas department of housing and community affairs.Jim,Your right I keep getting the same thing about the city having the say so from others. I heard back from an attorney in Austin today that states:This could be
considered a grey area of the law as to whether this is in violation or
not.  On the one hand they are allowing some manufactured homes, but they
are not allowing all HUD code manufactured homes into an area designated for
manufactured homes.  I believe this would be an issue that would need to
be decided by a judge in a lawsuit between the parties.I have contacted I will have to decide if it is worth it or just move on to the next one. I has so many positives that it probably still worth it.Thanks for everyone’s input on this forum. This is a very supportive and knowledgeable one at that.

We fight these type of issues all the time. It is not that hard. You simply need to get a municipal attorney involved working directly with the city’s attorney to clear up their apparent lack of intelligence as far as grandfathering is concerned. Do they have a decent case? No. Can they win in court? No. Do you want to spend the time and frustration to fix it? Sure, if the deal is compelling. We deal with at least 3 or 4 of these issues a year and win every one of them. But you HAVE to use a municipal lawyer as your quarterback or you’re wasting your time.Get a contract extension and get an attorney. If they don’t cave on a quick call or letter, then the seller needs to take over as far as filing a lawsuit since it’s his property value that is being damaged by the city’s behavior.

ZZ-So as I read the Texas code it is clear on the rules if there are no other rules or regs outstanding. I think the question- is the city violating a hard, fast state or federal law in the ordinance. The state seems to say you must do this- unless you have some other rule or reg in place. The state uses the term- ‘not withstanding’ which implies if the city has not addressed this issue, here is the states generic rule.  a few thoughts- the city needs to object within 45 days of the home being set. Now if the home was not set legally, they might have another section of the code to fall on. That said- ticking off the city can also make things very hard on you as an owner. Making enemy’s with the inspectors, city counsel etc can bring pressure for years to come and make the park very difficult to operate. a link to the the state laws and rules-https://www.tdhca.state.tx.us/mh/laws-rules.htma link to the section of statutes-https://www.tdhca.state.tx.us/mh/docs/standards.pdfHere is the section of the code concerning this- Sec. 1201.008. Regulation by Municipality.(a) A municipality may prohibit the installation of a mobile home for use as a dwelling in the municipality. The prohibition must be prospective and may not apply to a mobile home previously legally permitted by and used as a dwelling in the municipality. If a mobile home is replaced by a HUD-code manufactured home in the municipality, the municipality shall grant a permit for use of the manufactured home as a dwelling in the municipality.(b) On application, the municipality shall permit the installation of a HUD-code manufactured home for use as a dwelling in any area determined appropriate by the municipality, including a subdivision, planned unit development, single lot, and rental community or park. An application to install a new HUD-code manufactured home for use as a dwelling is considered to be granted unless the municipality in writing denies the application and states the reason for the denial not later than the 45th day after the date the application is received.© Subsections (a) and (b) do not affect the validity of an otherwise valid deed restriction.(d) Except as approved by the department, a local governmental unit may not require a permit, a fee, a bond, or insurance for the transportation and installation of manufactured housing by a licensed retailer or installer. This subsection does not prohibit the collection of actual costs incurred by a local governmental unit that result from the transportation of a manufactured home.(e) Notwithstanding any zoning or other law, in the event that a manufactured home occupies a lot in a municipality, the owner of the manufactured home may remove the manufactured home from its location and place another manufactured home on the same property that the replacement is a newer manufactured home and is at least as large in living space as the prior manufactured home.(f) An owner’s ability to replace the home as a result of a fire or natural disaster cannot be restricted. Other than in the case of a fire or natural disaster, a general rule or home-rule municipality by an ordinance or chapter may limit the ability of the owner to replace his home to a single replacement.

Frank I absolutely want to fix it. This is my first park and this one caught me by surprise. I could fill the 9 empty spaces sitting there in a heartbeat with inexpensive trailers readily available. The bank that owns the park had foreclosure week all last week and the attorneys were tied up. I was planning on making the San Antonio seminar on the 26th but that is when the day closing is set. They are selling as is, but geez that is a big negative to me or any other perspective buyer and I told the Realtor that.I haven’t had any luck finding a municipal lawyer online, but with your response I need to try harder.Thanks and I will keep the forum posted.

You probably can’t find a municipal lawyer on-line. Start calling the big firms and ask to speak to someone who specializes in municipal law. That’s how we do it. Once you get someone on the line, tell them that you have a zoning problem and may need to litigate and ask them for their credentials regarding suing city hall. To be effective, you need someone who sues the city frequently and, preferably, has a track record of winning. You need someone that scares the city attorney when they call, due to their reputation.

So, full disclosure, I was interested in buying this property the day I received a link to it online.  We inquired about it but were told someone already had it under contract.  So my hat is off to you, sir, for getting the bank to extend the 7-day drop-dead date (which caused us some delay in deciding to pursue this park).  We operate in two cities in Texas and I have a fair amount of legal training, and it’s my opinion (but I’m not a lawyer!) that the city wins this one.  There are a number of reasons, including Jim’s second paragraph – even if you win the first battle with City Hall, you will not win all of them.  On top of that, I think the city has a pretty good legal basis for their claim that bringing in a new single-wide home is prohibited, and that will get them far enough that you won’t win easily (or cheaply).  There is no grandfathering for vacant lots.  The state-law preemption is only for lots currently occupied by a home which is replaced by the same homeowner.Your best bet is to convince the city to grant a variance.  There is a process which will certainly involve convincing at least someone of the merits of your case; but you don’t want to start out thinking you have a “right” to bring in single-wides.  Otherwise you’ll have to evict the home if it’s occupied/owned, or obtain it through abandonment or purchase and resell it to someone who will move it.  You’ll take a loss for sure, but build that into the cost of the park and see if it’s still worth buying.Brandon@Sandell

That’s not correct. Mobile home parks are a grandfathered “use”. What Jim posted relates to mobile homes on residential lots in a city – not in a park. We are extremely well versed in this one trivial area, having probably won more cases than any other operator in the U.S. That being said, it is the buyer’s opinion as to whether or not it is worth the time and cost of litigation to solve this issue. We have never had to litigate to solve it – it has always been done by phone or demand letter – but you HAVE to use a decent municipal lawyer or you’re going to go nowhere. Just for everyone’s edification, ALL vacant lots inside a park are grandfathered as “use” just like a parking lot (because a park is a parking lot for mobile homes). You have the right to bring in any type of trailer you want as long as it’s HUD code, unless the city had an ordinance restricting that right enacted BEFORE the park was built. Take the date the park was built and look at any ordinance and, if it was enacted after construction of the park, it is of no validity. The only one who can affect your grandfathered “use” rights is the Fire Marshal, but the age of home has nothing to do with public safety. Don’t be scared away by such nonsense at city hall. Get a copy of the Certificate of Zoning, If it says 100 lots and legal non-conforming, then you can use all 100 lots any way you see fit, as long as it’s based on the mobile home code when the park was initially built. This B.S. is as old as the industry, and while a good ol boy inspector may talk big, the city attorney is going to shut him down real fast when faced with litigation (real or perceived).

Well- what I posted uses the words- “rental community or park”. I am pretty sure this section of the laws / rules has some application to mobile home parks and not just municipal lots. That said- this argument seems to be if a city can enact a restriction of some sort, in this case a minimum square footage requirement, for a replacement home, or any home placed in a mobile home park that was built prior to the ordinance being written. Maybe Frank will cite a specific example of where they got a municipality that had a size restriction on homes to relax that ordinance through litigation. The case law would help all of us in these matters.   

There has been lots of discussion perhaps as a newbie the time to pass maybe at hand.      Attorneys can got through lots of money and believe me when I  once learned the lawyer I hired  had a mellowing time with the apposing attorneys I realize they can put on a good show to show they earned their fees.     Most buyers do not read the City’s ordnances prior to purchasing properties but maybe it should be part of due diligence as to the current effect on their investment. 

Jim,There is no case law on the matter, as we’ve never had to follow through beyond the bluff. But we defeated three such cases in Illinois in the last 24 months. The Texas section that you quoted was enacted by the State to meet concerns about mobile homes being unfairly targeted on residential lots. The intention was regarding land/home subdivisions, which is why it says community or park. It is not the correct argument if you plan on going to court. The argument is instead:1)  the Certificate of Zoning says X number of lots and legal-nonconforming (grandfathered).2)  that establishes that the “use” is grandfathered as long as no more than X trailers are parked in that giant parking lot known as a mobile home park.3)  no ordinance can affect a grandfathered use unless it’s adopted PRIOR to the park being built4)  so if there was no age limit on homes when the park was built (or setbacks, etc.) then the city has no ability to enforce (however, they can suggest such things as much as they like).Is this really that hard an argument to understand?Everyone is free to approach their diligence as they see fit. If you want to pass on such deals, be our guest! We get some of our best deals from prior buyers’ ignorance. Our deal in Kankakee – which scored a 20% cap rate in its first year of operation and now enjoys a brand new Walmart Supercenter down the street, is just such a deal, and one that I illustrate at Boot Camp in detail.

Thanks for clarifying Frank. You make a compelling argument. I would not want to be the test case where the city attorney has nothing better to do than to fight the mobile home park owner and have the bluff called. One could have more in legal fees than the park is worth in short order. 

That’s why you would never buy the park until the problem has been cured. This is strictly an item to satisfy during due diligence. If you have to litigate, the seller should bear all the cost and the exam period should extend until the case has been decided and issue resolved. 

-CarlThere’s that word that prevents people from posting…“newbie” well this “newbie” at least bought the DD book and even went beyond and checked city zoning.I do through DD.

Frank- I agree with it needing to be done prior to purchasing. So in your cases did the city just say they would not enforce the code, or did they repeal or re-write the code?   

They agreed that no ordinance enacted after the date the park was built was applicable and they agreed that it was OK to bring homes in and out, as long as they have a HUD seal. 

I have the utmost respect for Frank but I think IN THIS CASE the city has a pretty strong hand if push ever came to shove.  I don’t see a judge looking at Frank’s point #4 the same way Frank does.  I think the analogy to a car parking lot is correct.  But if an (insane) city were to pass an ordinance saying that SUVs were not allowed in city limits, I think a judge could very well rule that the city has a right to enforce that ordinance on a private parking lot unless the car in question was parked there at the time of passage of the ordinance.  Perhaps I’m wrong.  But state law is based on in-state precedents and generally elected governments are given wide latitude by the courts.  So I think it’s still a roll of the dice and even finding out whether the City is willing to back down could be costly. A letter or phone call to sound out the City’s attitude might not cost much, but it takes a lot of time to craft a document if there’s someone who needs convincing.  The more convincing they need, the more it’s going to cost you in time, energy, aggravation, money, or hair.In practice, I would agree with Frank and Jim (and everyone else?) that you have to make this the Seller’s problem and not your problem.  Otherwise you are buying this problem for yourself to fix.  At some price, it’s worth it; it just depends on what you feel like fixing.  I recently walked on what might have otherwise an excellent deal on a park for this exact reason.  In fact I’m still wondering if I made a mistake.  Brandon@Sandell

“Newbie” is a beginning stage of understanding of a certain subject–books, boot camp, discussion boards are nice but will never be like actually owning and managing a park. doing pay rolls, solving actual tenant problems and dealing with banks etc.     Frank, Dave and Jim are the “experts”–they have invested not only their time to own parks but be patience with beginners–this park is not one to cut your teeth on.   We all start someplace and for me I am a "newbie"e on owning Motels or Resturants.