Friends -
We’ve finally found a Lonnie Dealer to operate in our park. He’ll be taking/rehabbing the least desirable homes in our community, while we continue to deal the better ones ourselves.
The Lonnie Dealer is reliable, checks out very well credit/criminal-wise, and has six other homes in other parks. We sign a lease with him for the lot rent, and he’s faithfully let us run credit/criminal checks on all his tenants - who also check out well.
My question is, do you think we need to sign a lease with his tenants? He prefers to collect the entire rent amount, and pay us on the 1st of every month (so far, he’s not missed an on-time payment).
So, do we upset his way of doing business, and insist on direct payment from his tenants (which will sometimes be late), or do we leave well enough alone?
Many thanks,
-jl-
Jefferson,
I’m not a park owner, but can speak from a LD’er and “future park owner” perspective.
As a LD’er I prefer to have the home buyers pay lot rent directly to the park. It’s only an extra chore for me if I have to collect from them and then cut checks to the park.
Looking at it from the park owner’s perspective, I would probably prefer just the opposite - just like you have now. I’m sure it’s much easier to process one check/payor for several lots than deal with each tenant individually. However, I would still want SOME kind of paperwork/lease with the tenant so that, god forbid, if the LD’er ever failed to hold up his end of the bargain you have some recourse/enforcement with the tenant.
My $.02,
Michael(KCMO)
Jefferson,
Two of our parks have different models (one is legacy) and how we work with the owners is adjusted accordingly. In both situations we always want lease information from the final tenant as well as do a check on them. Bottom line is noone lives in our park without our approval.
Park 1)
Scenario: Straight LD brings in home and ‘sells’ the home to a homeowner.
Model: Lot lease agreement directly with END owner and they pay the Lot rent directly to us. Both LD and I do background checks (two better than 1). We have separate contract with LD that they are responsible for Lot rent if owner defaults, etc. LD collects the home payments themselves and we have nothing to do with it. That is pretty straightforward.
Park 2)
Scenario: Park did allow sub-leasing or renters; legacy model but works fine for us.
Model: We collect lot rent directly from the ‘home owner’ (ie person who is renting/subleasing their home). We have 2 sets of leases: one for home owner and the sub-letter. In this case we don’t worry about the renter/sub-leaser but have all the provisions and leases with both parties that allow us to evict in case of breach such as rules violations.
So it depends on your model. But I recommend you have ultimate control which means to have leases for everyone and do checks on everyone.