Monday, December 6, 2010

The Rules are About to Change in Arizona’s RV Resort/Park Model Communities. Should a few inches really make that much of difference?

Historical Perspective

Modifications to the Long Term Space Rental Act (RV Act) (Title 19 Ch. 33 2101-2141) in Arizona’s last controversial legislative session, may mean more peace of mind and higher values for park model owners in Arizona’s RV Resort Communities. For those not intricately involved in the RV/Park Model world, it may come as a surprise that even though park models look like miniature manufactured homes, because of their size (less than 400 sq’), these snowbird winter play homes have been legally classified as recreational vehicles (RV’s) for over a decade. At first glance this may not seem like that big of a deal, but a few inches really can make a big difference.

Even though park models are produced with the same materials, on the same assembly lines and by the same manufacturers as “manufactured homes” (over 400sq’) their governing community oversight and consumer protection agencies offered by the State of are the same as those pertaining to communities for travel trailers, motor homes or fifth wheels…None. Looking a bit closer, it is easy to see how the lack of accountability in an industry can be the breeding ground for a misuse of power. Tyranny can begin with just one legal definition.

Unlike most recreational vehicles which are removed from communities during the summer months, park models are set up and maintained on the same location on an annual basis. Besides the fellowship, amenities and facilities offered by these multi-million dollar communities, there are many benefits of park model ownership. One of these is that park model owners (who often transition from a regular RV) get the benefits of a fun and active lifestyle with some of their dearest friends while at the same time, get to escape the risks often associated with pulling tons of metal behind them down winter winding roads covered in ice from their home towns to get to our sunny destination.

Park model owners typically buy and/or keep their little dollhouses fully furnished and can fly or drive down to use them and them “button them up” (as one Canadian friend put it) when they leave until the following winter season. These typically 11’ X 35’ one bedroom vacation homes offer full kitchens and baths and can be modified to incorporate larger amounts of living space with room additions often referred to as Arizona Rooms, sun patios, workshops and the like. Since many park model owners have previously lived in even smaller spaces for months at a time in their RV days, 400sq’ plus is plenty since they these folks are mostly busy outside of their homes; dancing, shopping or spending their money. They enjoy being outside getting sun or participating with others at their clubhouse community center volunteering, singing, dancing or making crafts and most importantly spending their money with our local businesses. They do this in our sunbelt state for about six months (up until around April) until they go home to be back with their families in Minnesota, Iowa, Canada or wherever else they might call home base.

According to Arizona’s Secretary of State, Ken Bennett, during the budget negotiations within Arizona State Legislature, visitors to Arizona constitute more than 3 Billion dollars in annual sales tax revenue to Arizona to support our schools, roads, educations system, and businesses. That doesn’t even include the millions of dollars collected in property taxes which are paid by winter visitors who own park models and manufactured homes even though they may not be residents of our state. That’s quite a big piece of the Arizona financial pie considering our total annual revenue doesn’t exceed 13 Billion from all sources*. Even though the majority of park models are owned by winter visitors, over the past few years of unsettled financial hardship for many, these little homes have proven to serve as an affordable housing option for many year round residents (seniors on fixed incomes) who can buy a home for as little as a few thousand dollars and pay as small of an annual fee at $2000 per year for annual space rent cost. Because these types of RV Park residents are often on fixed incomes, they cannot afford anything else or to move. They often offer services to other residents as a way to supplement their incomes by caretaking or cleaning homes for their more affluent “snowbird” friends. This is where the property rights of a resident who own a park model versus those of manufactured home owners get a little more complicated. If someone wants to exit an RV Resort and/or sell their RV such as a travel trailer, they just unhook the unit from utilities and off they go. It’s an entirely different story with Park Models.

Park Models are basically stuck wherever they have originally been placed. Park model are not built to be readily road worthy and are not easily transportable like other RV’s. They are not self contained and not meant to be pulled from location to location such as a motor home or travel trailer which may often be seen driven down the Hwy or pulled behind a truck. Once a park model is delivered to a site from the factory or sales lot, they are permanently set up, tied down and attached to permanent structures in their destination community. They can be moved but it can be a very messy and expensive process. Due to the tremendous expense associated with moving a park model to another location (which often requires the dismantle and destruction of the Arizona Rooms which have been built on to them), sellers of park models face the same challenges as manufactured home owners when it comes to selling.

Just like manufactured home owners, park model owners are bound to the rules and regulations of the communities in which they are located. RV Parks helped to create and take advantage of the loop holes in the original legislation which have given more authority to RV parks than those found in laws associated with manufactured home communities. One of these relates to the rights of an owner of a park model when selling. Because a park model is most often found on leased land (not real estate), they do not have access to a multiple listing service such as those offered on residential real estate by regional real estate listing services. Park model owners become entirely dependent on drive in traffic and word of mouth to market their properties. Corporations and partnerships which have purchased these communities have imposed community rules which prevent the home owner from posting a “for sale” sign and/or require that the resident use the internal sales office (often owned by the community) to sell their home. It is not surprising that the homes which are marketed the most are the ones owned by the community and not the ones listed that have “already paying space rent residents” in place.

Because of this, these individual sellers have been limited in the amount of outside exposure they need to reach buyers. In most cases there is a conflict of interest because their landlords are their competition. This fact intimidates many who feel obligated to list their home to stay on the good side of the community and/or feel afraid to confront the lack of showings of their homes because of their fear of being evicted or ostracized. Many communities have passed rules which state that residents are not allowed to post their own for sale sign in the window of the home they are trying to sell thus not attracting buyers who might be driving through the community looking for a prospective purchase.

In addition, if a park model resident becomes incapacitated or deceased, out of state family members are often left to face the dilemma of liquidating the property. They face the option of “giving the home away”, turning over their titles to the community ownership, or maintaining the annual liability ($3000-$10,000). The other option is to pay thousands of dollars to remove the home from the community. If a home is removed from a community the resident or representative of the resident are most often required to return the lot from which the home is removed to its “original condition” (tearing up concrete, tearing down Arizona Rooms, removing plants and trees, etc.). It is much more difficult to leave an RV Resort if you don’t own the type of RV that can be unhooked from utilities and simply driven or pulled out of the community.

Senate Bill 1146 (SB1146) amends ARS 33-2102 and 33-2132 C,6 to say that “A landlord shall not: prohibit a tenant from advertising the sale or exchange of their property including the display of a “For Sale” or “Open House” sign on the recreational vehicle… Further ARS 33-2132 states amends C to ad #7 which now says that” A landlord shall not: 7. Require a tenant or prospective tenant to use any specific agency, manufacturer, retailer or broker.

Another problem in many communities is that because of the language in the original legislation (passed by community owners and community owner advocates in 1999), park model owners have been able to evict an RV park resident “without cause”. The RV act drafters copied much of the language found the Manufactured Home Landlord Tenant Act (passed in the mid-80’s)which states that a manufactured home community must have “cause” (i.e. Non-payment of rent, breaking the law, change if use of land, repeated violations of the rental agreement, etc) to evict a tenant. Instead, the makers of the RV Act created a half hearted version which contained the words “without cause” and the parks have run with the implication of this power to evict for no reason for over ten years.

Up until this most recent legislation was passed, a manager/owner of an RV Resort could evict someone without cause which gave them a carte blanche “big stick” to keep residents “in line”. If someone opposed a new rule or questioned a particular park’s unfair business practices, they were often told to shut up and sit down or get out. This original “without cause” language (in the previous legislation) was also known as “subparagraph F”.

Fortunately for RV Park/Park Model residents this new legislation now has changed the rules for the park managers/owners. House Bill 2255 (HB2255) amends ARS 33-2143 to exclude park trailer (park model) residents from the “without cause” clause. This means that a manager of a community cannot “non-renew” a lease without a good cause. (See ARS 33-2143 G. 1, 2, 3, 4)

There is still much work to do to level the playing field for residents of RV Resort communities and stop some of this abusive misuse of power, but at least the stage has been set. Even one of the legislators who helped to pass the legislation indicated that when she first moved to Arizona she thought of buying a park model. They are so cute!

Please visit our website to see entire bills: ParkModelOwners.comOr call our office: 480-699-4424

We hold these truths:
According the an excerpt of the 5000 Year Leap p.172 Justice George Sutherland of the US Supreme Court once told the New York State Bar Association: It is not the right of property which is protected, but the right to property.
Property, per se, has no rights; but the individual-the man- has three great rights, equally sacred from the arbitrary interference; the right to his LIFE, the right to his LIBERTY, the right to his PROPERTY...The three rights are so bound together as to be essentially one right.
To give a man his life but deny him his liberty, is to take from him all that makes his life worth living. To give him his liberty but take from him the property which is the fruit and badge of his liberty is to still leave him a slave.
(Principal or Expedient? Annual Address to the New York State Bar Association, 21 January 1921, p.18)