Tuesday, July 14, 2015

Whats the Difference Between a Park Model and Manufactured Home?

This was a post I made in 2009. The post was written prior to our success in amending statutes pertaining to the Long Term Space Rental Act which now provides more rights for park model owner's under the law.  Please see posts after 2009 for a summary review of which statutes were affected.  Essentially, Park Model owners now have a right by law to post signs, use outside sales agencies to sell their park model homes and cannot be evicted "without cause". 

I have re-posted this prior summary because I still believe it is important for those retirees coming into our industry to be aware of the industry's history. The post outlines the legal differences between park models and manufactured homes and how their legal rights differ depending on the type of community in which they are located.

Original post August 29, 2009 (Below)

Arizona Active Retirement and Vacation Housing Choices All views expressed here are mine alone and do not necessarily represent those of any client or other organization. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. KNOW THE FACTS BEFORE YOU BUY: Park Model vs. Manufactured Home (What’s the difference?)

Both Park Model RV Resorts and Manufactured Home Communities are popular winter destinations for many of Arizona “snowbirds”. Often the question is posed; What is a park model? What is the difference between a park model, mobile home or manufactured home? Well the differences may suprise you. In the State of Arizona, size really does matter. Let's start with a park model.

A park model is considered a stationary RV. It is a home that is manufactured in the same manufacturing facilities as a manufactured home but is legally required to be less that 400sq' to maintain it's definition. Park Models are not required to be built to HUD standards rather ANSII standards which are the minimum standards required by law. To the naked eye a park model looks very similar to a single wide manufactured home, is typically located in the Active Retirement "RV Resort communities" (although some can be found in a "manufactured housing" community) and are mostly popular to out-of-state retirees due to their size and minimal maintenance. Throughout the years, the popularity of the RV Resort lifestyle has abound.

This carefree, low maintenance lifestyle is especially appealing to newer retirees who have had it with cooking, cleaning and working all their lives and just "want to have fun". The demographics in various communities and regions throughout the US vary but you can be sure to find a melting pot of a mixture of the heartbeat of America in almost any one of these communities. One gentleman told me, "where else could you find a US District judge and pipe fitter sitting at a pool party burger bash organizing a charity softball tournement"? I guess not too many places. RV Resorts often act like little towns; boasting their own mail posts, beauty parlors, travel agencies, yoga classes, movie theaters, live entertainment and so much more. The popularity of this lifestyle often prompts a winter visitor who may have experienced a "test drive" via a fully furnished seasonal rental to buy a home so they can come back year after year.

These communities often become a sort of "fellowship" with "block captains" and community volunteers who help each other enjoy their retirements. Most of the people I have had the honor to meet throughout the twenty+ years I have served this specialized market good best be described as "Good Samaritans". They truly care about and take responsibility for each other by acts of service such as driving the elderly widow on the street to her doctors appoinment or by simply offering a hot dish to someone if they get sick. One of my customers once told me that she knew shortly after she moved in to her new park model, that she was "making friends I will have the rest of my life". Often these out of town non-Arizona residents conduct fundraisers to help our local Arizona charities and volunteer in city and county programs that make are state better.

After a few years or sometimes even from the onset of a new or pre-owned park model purchase, one of our snowbirds may decide to built a room addition so they can have more interior square footage for entertaining or for family or friends to visit. These additional interior spaces are called "Arizona Rooms" and can vary in price from $10,000 for a very basic rendition all the way up to $100,000 for a super deluxe version with laundry facilities or additional bathrooms. These room additions are legally called "Patio Enclosures" and the language the City of Mesa uses to describe a park model are "temporary and portable units" (I wonder if someone who spends 100K+ after all the gussy would consider their winter home "temporary and portable") When considering a purchase of a park model, it is prudent to do your research about the home, community and business practices of the corporations or ownership of the land.

The below is my understanding of a few critical points to consider; Please see the Mobile Home Parks Residential Landlord and Tenant Act; ARS Title 33, Chapter 11 (33-1409) to begin to understand that if you own a park model, you are not protected by these laws and rather you fall under ARS Title 33, Chapter 19. There is a huge difference. (I will demonstrate the history of this Chapter 19 in a future blog). Here is an excerpt from Chapter 11; 14. "Mobile home": (a) Means either of the following: (i) A residential structure manufactured on or before June 15, 1976, that is transportable in one or more sections, eight feet or more in body width, over thirty feet in body length with the hitch, built on an integral chassis, designed to be used as a dwelling when connected to the required utilities and not originally sold as a travel trailer or recreational vehicle and which includes the plumbing, heating, air conditioning and electrical systems in the structure. (ii) A manufactured home built after June 15, 1976, originally bearing an appropriate insignia of approval issued by the United States department of housing and urban development. (b) Does not include either of the following: (i) A recreational vehicle such as a motor home, camping trailer, van, fifth wheel trailer or other type of recreational vehicle. (ii) A structure known as a park model trailer that is a structure built on a single chassis, mounted on wheels and designed to be connected to the utilities necessary for the operation of installed fixtures and appliances and that has a gross interior area of not less than three hundred twenty square feet and not more than four hundred square feet when prepared for occupancy.

Please consider the following when comparing options: Don’t assume disclosure: Both manufactured homes and park models are considered “personal property” not real estate. Laws which stipulate disclosure in real estate transactions, HOA (Home Owner Association) and CC & R (Covenants Codes and Restrictions) do not apply to these types of communities. Understand your rights: Even though the land is leased, manufactured housing and RV/ Park Model communities are not governed by the Arizona Residential Landlord Tenant Act or the Arizona Landlord Tenant Act and applicable real estate law pertaining to leasehold estates such as apartments may not apply. (unless you are buying a park owned home-more on this later) There are governing agencies and oversight for MANUFACTURED HOME CONTRACTORS, BROKERS/RETAILERS AND MANUFACTURED HOUSING COMMUNTIES BUT NOT PARK MODELS MANUFACTURERS, COMMUNITIES OR BROKERS):

Here is their link: Department of Building, Fire and Life Safety (DBFLS) through the State of Arizona Office of Manufactured Housing acts as the State Servicing Agency (SAA) for Federal Department of Housing and Urban Development (HUD). Manufactured homes were not built to HUD standards until 1976. Manufactured Housing Landlord Tenant Act: The MH Act was passed in 1987 that mandated property tax assessments on manufactured homes. These are allocated to a Relocation Fund for owners of manufactured homes which may qualify for assistance should the land owner (park owner) raise the rent over a 10% (+ the cost of living increase) or should there be a land use change. There is currently no such fund for park model owners. In fact, the Long Term Space Rental Act RV Act (see Title 33 Ch. 19) began forming in the late 90's and was passed through State legislature from the cooperating efforts of RV/Park Model land owners, a city municipality and others. The RV Act is a watered down, distored and limited version of the MH Act (it's predecessor) and actually allows a park owner to “refuse to renew a rental agreement without good cause”.

This may not seem like a big thing at first but it has helped to infringe on the civil liberties of many out-of-state non-residents since it's passing legislature in a 1999 Special Session. That's just the beginning. There is currently no funding for any oversight or accoutability for the park model industry and no admistrative function to protect "Mr Park Model-Land Renter" from "Mr. Land-Owner".. If the Mr. Land-Owner decided to increase the space rent by $10,000 per month or cut the piece of land out that the park is located on and move it to China, there would be nothing the park model-land renter could do to try and stop it except maybe hire an attorney. Since the prospect of making increasing ones business revenue stream from plaintiffs with RV Act claims is pretty dim, the likelihood could be that Mr. Park Model-Land Renter would most likely be charged a retainer only to discover that no law has been broken therefor there is no case.

As the law stands now, Mr. Park Model-Land Renter would either have to come up with the cash and pay this new space rent amount, move the home out of the park (If the park owner will let him) or sacrifice the home to the park either in lieu of rents or for a fraction of the value the park model owner thought he had.

Many park model communities publish Rules and Regulations which unilaterally effect all residents. These Rules and Regulations may be changed, amended or otherwise modified at any time for any reason without consent from the residents to whom they pertain. It is common for these rules to prohibit resident "For Sale" signs and disallow any involvement on their "private property" from unapproved "vendors". Even though these communities are acting in the capacity of mini-municipalities; mandating and enforcing their own "laws", regulating their own utilities, maintaining their own mail rooms, provide regular public access to promote their activities department budgets, etc., they still insist that they are private entities subject to protection as private land-owners and are able to create monopolies by regulate the trade themselves through exclusive vendor agreements granted to their"approved businesses" (which have agreed to fund them).

Other rules stipulate that no outside listing company is allowed to operate in the community and that if the resident requires assistance selling their home they will be required to use the internally owned and operated sales office. It is common practice for these sales offices to steer their captive audience buyers to the park owned properties (which are often accumulated by the land owner through various confiscation techniques or abandonment by the resident) or to their new home inventory. They use their advantage of "free or discounted space rent" as a way to leverage value over other seller’s who aren’t so well positioned and aren't "allowed" to fairly compete. The most recent "special offer" are communities which agree to move a park model resident from a competitive community into their community "For Free" and will include special rent incentive.

Of course their are consequences if the resident later decides he doesn't want to stay in the community which include paying back all of the freebies with interest. The MH Act requires by law that residents in manufactured housing communities shall have the right to post a For Sale sign in their window and the ability to use the service of an outside broker should they need professional assistance. Specifically it states that a resident shall not be required to use a specific firm.

Unlike real estate which can be accessible by any agent with a Multiple Listing Service (MLS) access code, those interested in purchasing either a manufactured home or park model in an active retirement community often find it very challenging. As out of state retirees explore their retirement options in Arizona they often get confused during the process because of a lack of centralized and consistent information. They will often spend hours of time on-line or driving through communities, writing down phone numbers, contacting multiple brokers and often visit the community management office for assistance. The RV Act makes no such provisions and requires that the seller post their advertising on a bulletin board often found in the parks sales office.

Residents almost feel forced to list their home with the park if they need assistance. This week, I received a call from an 87 year old elderly man. He reached my number by mistake. He had been given a number by directory assistance that he thought would connect him with an RV salvage yard where he could buy a used sink for his “RV”. I wanted to help this gentleman so I told him I would be happy to find the correct number and conduct a three way call to make sure he got taken care of. As our conversation continued he informed me that his home wasn’t actually an RV it was a park model. Years ago after he lost his wife, he decided to sell his residential property (real estate) and move into a secure community where he could be with other retirees and stay active.

He purchased the park model and fixed it up years ago but now is getting “too old to live alone” and wants to move to Colorado to be with his family who are eagerly waiting and will be able to give him the care he needs. Finally he said; “I wouldn't need a sink if I could just get this place sold but the park has got us so tied up here there are about 200 for sale and nobody knows what to do". He said his space rent has recently increased so much, he had heard of people on fixed incomes who had to choose between buying their medication and paying their rent.

The RV Act gives the land owner the right to turn off the utilities and evict elderly residents with a writ of restitution and "the sheriff or constable may fully execute the writ of restitution by removing all occupants and their possessions from the recreational vehicle and from the space it occupies. The recreational vehicle is deemed abandoned... " Once the home is abandoned the park owner can take title to the park model which is titled like a car and resell to someone else for a really great price. Many of the demographic who own park models in RV Resorts are of the affluent sort and can just walk away if they get disgusted with this type of communist regime.

Others like my 87 year old elderly man feel obligated to "take care of their business" or may have no where else to go. They will stay and try to do anything to get their place sold even if it means having to buy a new sink. (He chipped the middle when he was doing the dishes and was afraid that would devalue his home). I will be meeting with my new friend this Saturday to see what I can do to help him and will report back to this blog.

Here is more... Administrative Law Process: This is only applicable to Manufactured Homes and does not apply to park models. The administrative hearing process is overseen by DBFLS which is "responsible by law for enforcing the standards, rules and regulations pertaining to manufactured homes and their communities". (Park Model owners or those who know of people who need help dealing with any of these issues may contact me directly through this safe link . we have formed a community based grassroots network comprised of Arizona winter visitors, residents and small business organizations dedicated to promoting and protecting the rights and interests of retirement aged persons in Arizona.

There are wheels in motion to resolve these issues through free speech social networks where residents of Arizona's retirement communities will be able to share resources, mentor each other and rate their communities in their own words. We will also be sponsoring classes and workshops specifically targeted to educate and empower retirement ages persons to take care of themselves and unify). Ironically, the “RV Act” passing of the legislature coincided with an RV Park owner association's reaction to a city code mandate which put pressure on park model community owners to create some type of written agreement with their tenants.

These parks had failed to comply with certain existing setback and building code requirements that they had ignored and that were not enforced for nearly 20 years. Many of these non-compliant park owners faced massive fines and criminal prosecution unless internal controls were implemented within these communities as part of a participation agreement between a small group of parks and a local city government department to initiate and implement a plan for widespread compliance over a period of years since the problem was so severe. The city's leverage was their power to issue permits new park model placement sets and existing park model improvement such as upgrades to electric or "patio enclosures"(ie Arizona Rooms).

If the park model park owners wanted their communities to flourish, they would need to get along with the city. This meant creating some type of written document that could be enforced on a resident to make them pay for improvements on the properties that held non-compliant status. From this point on, the grandfather terminology would only mean that a home could violate city code requirements only up to the point of sale or rental. If a resident was going to sell or rent, he would be required to get "approval" from Mr. Land- Owner management office, an inspection would be completed, and any required improvements would be stipulated in writing and acknowledged by the resident.

Either the resident could bring the home into compliance prior to sale or the buyer (new resident) would agree to do so within a 6 mo. period. Of course this triggered alarm in many of the communities and created a massive exodus from many communities as private sellers just gave their homes away to wholesale brokers who would agree to "tear the unit down" and remove it from it's existing location, thereby alleviating the space rent liability of the previous resident.

In many other cases, elderly people who didn't understand what was happening and were terrified of the prospect of their home being torn apart to make way for fire fighters would end their retirement years early, go back home to Minnesota or wherever they were from and leave their park model titles behind mostly in the hands of the park owners who would then be responsible for it including any required upgrades.

The exclusive vendor rule really got roarin' at this time. In some cases where the compliance issues were minimal such as an installation of a firewall on one side of a shed, homeowners would get together to help each other make these improvements. In other cases Mr. Park Model-Land Renter would use his signed compliance requirement letter as a work order to hire one of the park approved contractors who had been given the charter for the community.

It was pretty busy and pretty messy around this time for a few years as awnings were being cut down, homes were being moved, thousands of dollars could be spend by Mr. Park Model-Land Renter just to gain a few more inches from the electric pedestal. These certain "approved"contractors were able to buy new trucks, 2nd Homes and take the summers off as a result of the high demand compliance business. Of course they could fix the price since there was no competition allowed; they had the exclusive right to work authorized from the top.

 Residents who had owned park trailers (the old nomenclature) in these non-compliant communities often suffered the financial brunt of the costs involved to modify their properties to satisfy these requirements (Even though they bought them that way with no disclosure from the community sales personnel).

They were told in many cases that this all was happening because of a "new city ordinance" when in fact the setback requirements had been in place since 1977, the year the city agreed to let the RV parks self-regulate. The language in the RV Act maintains that under ARS 33-2131: "A tenant shall: 1. Comply with all obligations primarily imposed on tenants by applicable provisions of city, county and state codes materially effecting health and safety. 2. Comply with all park rules regarding sanitary and aesthetic guidelines. Since 1996 I have encountered hundreds of cases where winter visitors had purchased properties before and since this law was passed that are shocked that even though they were told the home met compliance, it in fact didn't and the park owner can actually require by law that the retiree come up with the cash or get out. Unfortunately, it is very difficult to just move out. Moreover the resident is required to get a written release from the manager before they could even move the home out of the community.

Last year I assisted a couple in an RV Resort where these residents had decided to move their home out of the community due to a conflict with management approximately a month before their annual space rent was coming due. The park required a 30 day notice for removal of any home. When the resident approached the manager about paying a small prorated portion of the rent in case their ability to get their home out before the space rent due date was delayed, they were told that they would be required to pay their entire annual space rent on the due date and that if they didn't the park manager wasn't going to allow the home out.

The Arizona's Revised Statutes were passed with no representation for winter visitors. It fertilizes the ground for the greedy and unscrupulous corporate executives who bought these communities mostly from farming families who originally owned them. There are very few "family owned and operated" parks left but if one can be found it may be an endangered species. There is no government agency or oversight for this segment of our housing population. The corporate lobby power keeps the existing controls in place while arguing for the Constitutional (private property) Rights of the land owner. What about the rights of the people who live there? Who is going to help Mr. Park Model-Land Renter: from the greatest generation who are often so afraid of losing their homes, and more so their social network and peer support? These are after all the whole reason these folks many of whom are retired veterans who fought wars for our freedom and that constitute the meat of what makes these winter wonder lands so popular. Once a "non-compliant" Mr. Park Model-land renter widow explained to me; "I lost my husband a year ago. I don't know what I would do if I couldn't get out of the cold and get down here to be with my friends. I'm just going to do what they say and forget it."

Residents which would have claims under the MH Act find themselves out in the cold when it comes to the RV Act. Should our Bill of Rights as given by the US Constitution be overridden because of private property rights of out-of-state corporations who choose to take advantage of US citizens in our state? Should access to consumer protection rely entirely upon a HUD sticker? Aren't their discrimination issues when Mr. Park Model-Land Renter is forced to suffer financial burdens and other consequences when the results of those occur due to the size of home he buys? The bottom line is that all the Mr. Park Model- Land Renters and his family are at the mercy of the "private property" land owner. They decide the rules, that's it. If you don't like it you can leave because there are many others willing to take the space. Mr. Park Model-Land Renter can just walk away but sometimes not without forbearing liability, credit damage and a devastated retirement housing plan. In most cases he could take his home with him but where would he go. Is there still life, liberty and the pursuit of happiness or not. Isn't that what he spent his whole life working to do? Legal Assistance can be costly and most of those in their golden years, don't want to deal with the trouble so they just cut their losses, move on and try not to look back.

I wonder how many potential Arizona residents we may have been lost because of the lack of protection for out-of-state seniors who may have otherwise chosen to make Arizona their permanent home for retirement after seasonal visits for so many years. Amazing since visitors to Arizona constitute 40% of the Sales Tax Revenue that represents 50% of our total revenue for the Arizona State General Fund. (Per the current Secretary of State Ken Bennett in a budget demonstration in at a ladies Republican lunch in September 2009). I wonder if trading the freedom of seniors is worth keeping out-of-state corporations happy. I guess these banker types could take their marbels and go home.

Oh yeah, winter visitors come to Arizona because it is warm here. Well if these corporations don't give up their evil ways then maybe we can vote them out. If not through our state legislative process then maybe with another vote that really counts. I'm talking about the USD from exchange currency or under the mattress. Money seems to be the law of the land. Since those are the rules then winter visitors can choose NOT TO INVEST IN ANY CORPORATION THAT APPROVES OF DECEPTIVE, UNFAIR OR UNCONCIONABLE ACTS OR ATTACKS INDIVIDUAL FREEDOM EITHER BY ACTIVE PRACTICE OR COMPLACENT IGNORANCE. If they don't like it they can leave cause' there's plenty of others who would love to take their place. Other stipulations in leases include a “no refund” policy for prepaid space rent if a property is sold. In some of these cases the park will not transfer the pre-paid space rent either and will require immediate payment of the annual dues again from their new resident.

Other leases require the resident submit to liens greater than the homes value if the resident decides to move it out for any reason. This is justified in their leases because the resident obtained the home from the park at a discount and therefor if the park owner is not going to get his long term space rent from the buyer, there need to be means by which he can recoup his loss. Families of winter visitor residents often feel frustrated and confused as they hear stories like those I have shared in this blog. It is almost unbelievable that this kind of thing can actually be happening. It is especially heart breaking because these are the people that built our country, paid their taxes, worked their whole lives to retire and we live in a State that can allow them to be treated like this. Of course there are thousands of winter visitors every year that never have had a bad experience. Just like there were plenty of homeowners in America that never thought they could possibly lose their pensions or retirement accounts.

One legislator told me that since winter visitors mostly comprise these communities and since they are not voters, they have no leverage with lawmakers who are not afraid of losing their jobs by losing votes. Winter visitors do vote. They vote with their dollar and their time. They have been the volunteers that for decades have built and been the lifeblood of many businesses in Arizona (like mine). The popularity of this lifestyle may be in part to the fancy amenities in these multi-million dollar communities with State of the Art fitness facilities, on-site beauty parlors and restaurants. The biggest part of what makes these communities great are the people that live in them. In fact they are the ones that made this nation great through their value system, dedication to service and good Shepard fellowship. These parks have survived despite their business practices because of the spirit of this generation.

Park Model/RV Resort community land owners have saved countless thousands of dollars in operating expenses thank to their volunteer labor. What a great going away present as this generation evolves through their lives journey. They get to give their homes away but at least they felt appreciated. General rules of thumb: Get it in writing: Always get and read copies of the community lease, rules and regulations, statement of policy, and proof of city code compliance from the governing municipality (not just from the community itself). If you are unable to verify compliance, the setback and other requirements should be available through the community office and taken into consideration when making an offer. Interview the manager and talk to the residents:

One of the best ways to get to know a community and their business practices. Search for the community on the Internet through search engines to see if any blogs have been written. I found once by a group of park model home owners which formed their own HOA to try and figure out how to make things bigger. They indicated in the blog that they understand they have no real say but it makes them feel better to talk about it. Attend a community event, meet the manager and staff and speak with several residents that live within the community. Find out who the land owner is and who runs the show. Search for their names in search engines which may indicate search findings of legal proceedings or articles written about their communities. I found an artice that featured a well known community ownership who was fined a $1000 per day because they did not correct a problem related to toxic drinking water for their residents for over 6 months. Calculate the risks: Despite the oligarchy which exists in many of these RV Resorts, snowbirds still flock to them. Many of these communities are well managed and do not impose these unfair business practices.

Many actually cater to the concerns and needs of the people who live there. Just understand that there are currently no safeguards to protect your rights in RV parks. If management or ownership changes anyone could find themselves prey to this because the law allows it. Many residents who buy these types of homes understand this and simply “do not spend more than they would be willing to lose” after considering the risks. Historically, park Model RV Resorts have offered more competitive annual space rents because the lots are smaller (Home must be 320-399sq' to be considered a park model-unless they have had a room added to them ie. Arizona Room) than the typical lot sizes to accommodate the larger manufactured homes.

Manufactured Housing Communities often require more stringent background and credit checks and many do not allow subletting which is a popular option for snowbirds who may wish to use their home for rental income when they are not using it and/or to cover annual costs in case of health issues or other interests. For years various advocacy groups have tried to get park model legislation passed to essentially place park model land renters under the care of the MH Act. Proposition 207 was a voter initiative passed in 2006. It was approved by Arizona residents to curtail the abuse of regulatory power by government agencies regarding private property rights. According to legal various legal review, "it prevents regulatory takings unless the government first compensates the land owner for the amount by which the regulation reduced the value of the land at issue."

Any land owner with park model space rentals may have a claim against the state for damages should park models be transferred under the MHP Act. So what! This isn't just about land or money or even the poor uninformed snowbird. This is about the principal of it. It's not fair and it's not right and somebody needs to make a big deal about this. Just like one of my customers once told me: "I never did see a hearse pullin' a U-Haul." In the meantime remember this: "Wait on the Lord: be of good courage, and He shall strengthen your heart: wait I say on the Lord".(Psalm 27:14) Please contact me at azrv@cox.net or feel free to click the link above to share your story or interest. Our office may be reached at: 1-800-478-3864

1 comment:

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