Looking at purchasing a small park when we got the rent roll we found that one lady owns 4 of the trailers. One of which she rents out. The current arrangement is that the rental tenant pays the lot rent to the park and the trailer rent to the owner of the mobile home. So when the home is empty I wouldn’t get lot rent? This seems like a bad set up considering I can’t rent the lot out cause there is a trailer on it. Should I make the owner of the mobile home pay the lot rent regardless if the home is rented out or not?
This is bad management by the current owner. You should get lot rent from the owner always. And furthermore subletting should be prohibited. When taking over a park and implementing better practices there are risks though - worst case this person will move all of their homes out. Average case they will be a pain in the but to sell their homes to you or someone meeting your screening standards.
If you’re not prepared for either of those scenarios with this Park then you should walk. You can alternatively this problem to renegotiate the purchase price. These homes will likely go unoccupied once you implement the new rules and need to factor that in. But then you have a bigger turnaround park then expected.
The second you non renew those leases and implement the new rules that owner will be in a bad situation, so I would try to work a solution with the person in advance before just doing it and seeing what happens. Assuming the homes are in decent shape you should aim to keep them there if possible.
Anyone that rents a home that you do not own is not your tenant. The home owner is your tenant. The home owner is renting the land to place their home on. The home owner pays the lot rent.
Many Community owners do not allow home owners to sub lease their homes.