A Lonnie dealer has a few homes in a park that I am about to buy.
Should I have a lot rental agreement with the Lonnie dealer or with the actual tenant?
Who should pay the lot rent - the Lonnie dealer or the actual tenant?
Thank you.
In our parks it is always the lonnie dealer that is responsible for the lot rent.
It’s 100% based on what the Lonnie dealer’s contract is with the tenant. In some Lonnie transactions, the tenant is stated to pay the lot rent direct and the home payment to the Lonnie dealer, and in some the tenant pays 100% to the Lonnie dealer and the then the Lonnie dealer pays you. You should always put the tenant’s name on the rent roll instead of the Lonnie dealer, as you will really screw yourself up down the road with your rent roll if you show that many homes belonging to one person. As long as the Lonnie is selling rather than renting, it would be like putting the mortgage company and not the tenant’s name on the rent roll.
Tenants of Lonnie dealers come and go where as the Lonnie dealers stays till the home is sold. Have the home owner (Lonnie dealer) pay the rent till the tenant becomes the owner. This way the rent payment is consistent until one of the tenants actually takes ownership. The Tenant is the Lonnie dealers tenant and a sub lease of the park owner. The Lonnie Dealer is your tenant. When there is a tenant issue you take legal action against the owner of the home not the owners tenant.
We prefer the ‘belt and suspenders’ solution. We sign lot lease agreements with both our Lonnie Dealers and the tenants. Generally the tenants pay the lot rent directly to us, but with two people legally obligated to pay the lot rent we know we are going to get paid. In fact, I don’t think we’ve ever had to go to court in such a situation. When a tenant flakes on the lot rent, we just insist the Lonnie Dealer backstop and pay the lot rent (or threaten to go to court). We let the Lonnie Dealer then evict their tenant for non-payment after we’ve secured our payment from the Lonnie Dealer.
Good luck,
-Jefferson-