All views expressed in this blog 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.
Copyright (c) 2010 by Michael A. Parham. All rights reserved
December 29, 2010
Holidays. This is what we used to call Christmas and New Year's. Sometimes our brains close for the Holidays just like our workplaces.
Many MHC managers won't refer evictions over the Holidays, experiencing a sense of generosity with their employers' money that they would not feel if it was their own. Thinking they are "helping" the tenant they let him live there rent free during December. That lets him spend his money on Christmas presents and gives the manager the warm glow of generosity--with someone else's money.
As I have ranted for years the real fact is that this is a terrible disservice since the money is now gone, the tenant is another month in the hole and may be so far in that he cannot dig out. It might just guarantee the eviction that the manager in his spirit of misbegotten generosity was trying to avoid.
Not that it seems to make much difference any more since some courts will not process evictions over the Holidays and the Constables have announced in many areas that they will not enforce eviction judgments during the Holidays.
Of course that is just another example of the government being generous with other peoples' money. I'm used to that but I still don't like seeing MHC managers emulating the government.
Abandonments. After a record breaking year in 2010, abandonment referrals also slowed down in December. Who is being helped by this? Every year they too slow down for the Holidays.
Economy. We are reading in the local papers how the economy in Arizona may be on the rebound. While I think that much of what I read is wishful thinking, I cannot ignore evidence staring me in the face. I am hearing from RV park clients around the State that snowbird business is really picking up this year. While that probably means the economy in other parts of the country and Canada is picking up, it also translates to good news locally. Much of Arizona's economy is geared to tourism and this seems to indicate that the tourism business may be regaining its health.
Its a sure thing they aren't coming here to see the Fiesta Bowl.
Legislature. It will convene in a couple of weeks and it is going to be a nightmare. This session will be almost entirely devoted to cutting costs. A billion dollars out of a 9 billion dollar budget must be cut and recovered before June 30, 2011. In other words, beginning February 1, there remains about 4 billion dollars of this fiscal year's budget. But only 3 billion will be spent. The other must be cut. 25 percent!
While there will be wholesale cuts in education, healthcare and prisons, everything is going to be affected. I foresee mass layoffs and furloughs of state workers and possible closure altogether of non-essential state agencies. I would not be surprised to learn that contingency plans for these sorts of things have been quietly drawn up over the last several months.
I think the MHC industry will feel this in seeking services from the MVD, the Courts and the FBLS Department.
Some of these cuts will be passed down to local governments and that too will affect MHC's.
And the budget for the year beginning July 1, 2011 also must be passed. That too will have monstrous cuts.
December 27, 2010
RV's. A major article appeared in today's Wall Street Journal about the improving health of the RV industry. It made the point that RV's tend to be made for domestic use since there was not much of an export market for them. In addition, the hassles that are increasing for ordinary folks to travel and get groped by TSA goons means that more people are looking for ways to get away without government interference. Using RV's for vacations seems a natural choice.
Of course people need a place to hook up their RV's when at a destination. MHC's with RV sections may want to do a self examination to see if they are doing all that they can to attract this possibly lucrative and growing business.
Quantitative Easing. That You Tube video I linked to on November 13 has had nearly 4 million hits in a month and a half. I honor it by changing this page's photo to those two genius economists. Also they have put up a new music video kind of summarizing it. If you watch it, do so on the full screen mode. http://www.youtube.com/watch?v=UGlX1BDgLBY
December 23, 2010
Merry Christmas. http://sendables.jibjab.com/view/XsqxP2z43o6OaoAg
December 19, 2010
Training. I am scheduled for only one manager training class in the metro Phoenix area in all of 2011. During that year I will be conducting manager training classes in Tucson, Bullhead City and Yuma and will be speaking at the MHCA Conferences in Phoenix in May and Tucson in October. But my only all day manager training class in the Phoenix area will be on January 28, 2011 in Glendale.
MHC managers are required to have six hours of training every two years and also within six months after first being hired. There is a $500 per month fine for not doing so. Managers are also required to display certificates showing compliance on the office bulletin board where it can be seen by residents.
Any manager wanting to attend my training class in Glendale should immediately get signed up. I would expect the class to fill pretty quickly since it will be my only one in the area this year. To register call Nancy at MHCA, (480) 345-4202 or 1(800) 351-3350.
December 17, 2010
Legislative Funds Sweeps. People who follow this blog know that I was retained a couple of years ago to sue the State for removing money from three dedicated agriculture funds to use in balancing the State budget. The Superior Court ruled in my clients' favor and ordered the money returned. The Governor appealed and last month the Court of Appeals reversed the Superior Court and said the sweeps were okay. Last week we asked the Arizona Supreme Court to review this decision and reverse the Court of Appeals. I don't know how this will turn out in the end. But I think the law supports a ruling that the sweeps were unlawful.
Relocation Fund. Readers also know that for years I have been criticizing the FBLS Department for supporting its general operation by using Relocation Fund money. I think this is an unauthorized use of those funds, but I also think that it is up to AAMHO to stop it.
In a similar case, the State Land Department has been using money from special trust funds to support its general operations. A public advocacy group sued to stop this a while back and obtained a Superior Court ruling in their favor ordering it stopped. The State appealed and the case is now before the Court of Appeals. This situation bears some similarity to what the FBLSD is doing with the Relocation Fund, though there are also significant differences. But it would certainly seem to support action to stop unwarranted use of Relocation Fund money. Here is a link to an article about that case. http://www.eastvalleytribune.com/arizona/politics/article_2f042808-08a3-11e0-8c94-001cc4c03286.html
AAMHO seems happy with things the way they are so I would not expect it to do anything to put a stop to this.
Greentree. Greentree finances more homes in parks than anyone since they seem to have bought up many other lenders over the years. That means they have also got more repossessions than anyone else.
There are some major policy and staff changes that are taking place in their repossession operation locally. The most significant is that they apparently will not allow parks to match high bids on mobile homes they are selling any more. What this means is that parks who have made offers to buy from Greentree may find third party buyers showing up without warning to remove the home after agreeing to out bid the park. Sometimes the buyer will just pull the home out; other times he will try to flip the home and extort a higher offer from the park.
This unannounced policy change by Greentree means that landlords who allow the home to remain in the park while rent goes uncollected are getting little or nothing in return. If Greentree wants to get a free ride on rent or defer paying it until the home is sold, and the park is interested in buying it to keep it there, before cutting them any slack, get a commitment from them to give you a chance to match the high bid in writing. Otherwise cut them no slack and immediatedly initiate a landlord lien sale.
Qwest. Qwest continues to tell parks and tenants alike that the landlord must do all trenching and restoration work before Qwest will service lines or respond to tenant/customer service complaints. I have written many times here that this is garbage. Qwest may try and get unsuspecting landlords to sign documents agreeing to do work that Qwest is now required to do.
Any park getting this kind of treatment from Qwest should contact the Arizona Corporation Commission and file a complaint. Tenants should do the same thing. Qwest, not the park, in most cases is responsible for servicing its lines including doing all digging necessary in its easements and restoration of the affected area. Here is a link to the Commission website explaining the process. http://www.azcc.gov/divisions/utilities/consumerservices.asp
December 12, 2010
14/30's Mean What They Say. An unfortunate fact of life is that tenants getting 14/30 notices to comply with park rules or vacate often ignore them. A 14/30 is an eviction notice. If it is not complied with on time, an eviction action can be filed against the tenant in Court 30 days after the notice is received. Far too many tenants assume a judge would never evict over such "minor" things as the 14/30 is talking about.
That is wrong. Judges WILL evict if the rules require something; the requirement is reasonable; and the tenant refuses to comply. I handle around 100 14/30 evictions a year and almost never lose the case. That is not because I am all that great; it is because the tenants fighting the cases almost uniformly are either stupid or hopelessly naive.
Sometimes tenants delude themselves when landlords try to get compliance after serving the 14/30 notice and put off eviction. That does not indicate any weakness in a landlord's case. It simply means the landlord is doing everything he can to try and avoid evicting a paying tenant over a rule violation. But if the violation persists, the landlord will eventually have no choice but to evict.
If you are a tenant and get a 14/30, take it seriously and get into compliance with the rules--pronto. If you think the notice is in error or is too harsh, go talk to the park manager. But don't just ignore the notice. And for Heaven's sake, don't assume a Court won't evict you over the notice. That assumption is flat out wrong and enormously stupid.
Titling RV's as Mobile Homes. RV owners who live in their RV's on a regular basis can get them retitled with the MVD as mobile homes. That enables them to be taxed as mobile homes which are taxed at a lower rate than RV's. Many residents of seniors parks will do this to save money.
But converting to a mobile home title does not make an RV a mobile home for landlord tenant act purposes. The mobile home parks landlord tenant act has different definitions of mobile home than the title and registration laws. If a post 1976 unit does not have a HUD decal, it is not a mobile home under the landlord tenant act no matter what the title says. If built before 1976, if it was not originally titled as a mobile home, it is still an RV no matter what the title says for landlord tenant act purposes.
Tenants claiming protections under the mobile home parks act after getting RV's titled as mobile homes are making a big mistake. They are still in RV's for landlord tenant and eviction law purposes and need to act accordingly.
Security in Parks. Crime is increasing everywhere, especially property crimes. Many tenants think landlords are responsible for protecting them from all crime in the park, and blame the landlord for any criminal acts of third parties against them.
Landlords are responsible for taking reasonable steps to provide a safe and habitable community. That includes such things as maintaining things provided by the park to enhance security like street gates and lighting. But if these things are not already provided by a landlord, there generally is no requirement that they be installed after the fact.
If a landlord knows there is gang activity in the park, he must act to put a stop to it. If he knows and can prove there is drug trade in the park he must stop it. If he knows of and can prove criminal conduct in the park by residents, he needs to evict them.
A prudent landlord will try and institute reasonable security measures like sponsoring block watch programs, installing and maintaining street lighting, ensuring vegetation is kept trimmed, and ensuring that rules pertaining to criminal conduct or conduct creating unreasonable disturbances are enforced. And a prudent landlord will never turn a blind eye to criminal conduct he becomes aware of.
But if a landlord does all of these things and a tenant is still harmed by a criminal act of a third party, the landlord is not going to be found at fault. Tenants need to act in a prudent manner also. They need to carry adequate insurance on their home and belongings; they need to always be aware of what is going on around them; they need to report to management bad conduct or suspicious people in the park; and they should be active participants in crime free and block watch programs.
Landlords are landlords, not insurers against all risk. Avoiding crime needs to be a joint effort by landlords and tenants. And everyone needs to understand that no matter how hard they try, crime is never going to b 100% prevented.
December 10, 2010
TSA Update. Sometimes I am really proud of the people I know in this industry. Stacey, the young mother and member of our Arizona MHC industry, is not going to quietly disappear. She has filed a claim against TSA, a prerequisite to suing them. And she has actually gotten a response of sorts from the federal behemoth. Here is a link to the official TSA blog, a site where TSA communicates its policies to employees and the public. http://blog.tsa.gov/2010/12/tsa-response-to-tsa-breast-milk.html
Stacey was held prisoner for nearly an hour with absolutely no cause by a TSA thug. She was released after missing her flight. Note how TSA minimizes the seriousness in making their apology. I am gratified by the 100 comments that follow. If people wonder why I constantly preach about the dangers of big, unrestrained government, this case exemplifies the reasons for my concerns.
December 4, 2010
Abandoned Homes. Our firm has hundreds of files working on homes abandoned in client MHC's. Each will eventually result in a lienholder paying space rent or, more likely in the park getting title to the home by way of landlord lien sale or bonded title so the park can get rid of the unit and start generating space rent. Each case will cost (with rare exceptions) less than $500 ($600 if outside Maricopa County due to higher newspaper publication costs). A few will cost more; many will cost considerably less.
While we represent a lot of MHC's around the State, we don't represent all of them. But we are probably the only firm that knows how to handle these situations.
It occurred to me that many parks may be hesitant to use us for abandonment situations since they have another attorney they like for their other stuff. They shouldn't be. We are perfectly happy to handle abandonments for parks with other attorneys. And it is not our policy to try to "steal" clients from colleagues. Quite the opposite--there are a number of attorneys around the State who refer their mobile home abandonment work to us.
Any non-client wanting us to handle an abandonment is welcome to contact us. We will need to have a limited retainer agreement signed employing us to handle the abandonment work because our regulatory authorities require it. Then all we will need is the make, year, size, VIN number and breakdown of delinquent rent owed on the vacant home. As long as the park follows our instructions, the case can normally be resolved simply and with a minimum of expense.
Unusual Immediate Eviction Situations. There are a couple of situations where a park can evict a tenant without giving advance notice and an opportunity to cure a default. They don't come up very often but once in a while they do.
1. Holdovers. When a rental agreement expires and the landlord asks the tenant to sign a renewal rental agreement but the tenant refuses, ARS § 33-1483 (B) allows the landlord to evict. The landlord must first wait for the current rental agreement to expire. Then he must offer a new written agreement and ask that it be signed. If it has a higher rent, the landlord must have given a 90 day rent increase notice. And the tenant must refuse to agree to sign the new agreement. While most landlords will just live with the situation as long as the tenant pays rent, the law does give the option to evict. If you want to do this, don't accept rent for the month you demand the new rental agreement. Its probably a good idea to tell the tenant in writing that you intend to evict if he refuses to sign the new rental agreement or vacate.
2. Unlawful Refusal to Allow Access to Space. ARS § 33-1484 (A) says if a tenant refuses to allow the landlord lawful access to the space, the landlord may terminate the tenancy. No prior notice or opportunity to cure is required. ARS § 33-1481 (A) says that once a rental agreement is terminated, the landlord has a claim for possession of the space (i.e., he can evict).
These situations normally occur when a tenant has a fence and gate he keeps locked and refuses to allow the landlord to enter to do maintenance work or read a utility meter. Another example is when a vicious dog is in the back yard preventing access and the tenant refuses to restrain the dog.
This does not involve access to the home--the landlord has no right of access to a tenant owned mobile home.
But when a tenant repeatedly refuses to allow access to the space the landlord legitimately needs, the landlord can give a notice immediately terminating the tenancy and immediately file to evict.
December 1, 2010
TSA Update. On November 25 I posted a link to a video of the TSA harassing a young mother trying to bring bottled breast milk through security. She had complied with all TSA regulations for doing so but the TSA agents didn't know what their regulations say and engaged in 45 minutes of abusive retaliation making her miss her flight. Stacey, the victim, used a public information request to get video from the City of Phoenix and posted it on You Tube so the world could see this abuse.
A week later she has had 175,000 hits. Her story has been picked up by internet and paper media and she has been interviewed on several radio and TV programs. Her story plus many others may force TSA to begin acting responsibly--I hope so because I won't fly as long as its run like it is now.
I really admire people who will stand up to an abusive government agency. I have seen government abuse and arrogance from both the inside and outside and there is nothing more frightening than wrongheaded people imposing their will by misusing the power of government.
Here is one example of media coverage of Stacey's story: http://blogs.suntimes.com/ebert/politics/nbsp-nbsp.html
Stacey is involved in the MHC industry which is how I have come to know her.
November 30, 2010
Handicap Assistive Animals. Under present interpretations of handicap discrimination fair housing laws, there is an almost infinite variety of assistive animals ranging from service dogs for the deaf and blind to comfort cats and assistive mini-horses and pigs.
The Americans with Disabilities Act applies to "public accommodations" such as stores and theaters, and has similar legal requirements for assistive animals and handicap discrimination. The U.S. Justice Department is responsible for regulations under the ADA and has recently been considering a change in assistive animal regulations to stop some of the abuses we have been seeing under that law. The definition of "service animal" is being tightened up to be limited to dogs and to exclude untrained or exotic animals. Moreover it looks like the dog will need to perform actual physical tasks to assist the disabled person in overcoming obstacles imposed by his disability.
Whether this becomes reflected in how fair housing laws are interpreted and applied is an open question, but there might be hope down the road that the worst abuses now taking place under the guise of allowing assistive animals will come under control.
Smoke Free Arizona Act. This law appears at ARS § 36-601.01. It prohibits smoking in "public places" meaning enclosed spaces open to the public and specifically includes such facilities in residential communities. The law was passed in 2006.
Parks should be prohibiting smoking in the clubhouse and all other enclosed public areas. "No Smoking" signs should be displayed at those locations. Parks can get the signs for free. Here is a website explaining the law and letting businesses order the free signs. http://www.smokefreearizona.org/order-signage.asp
I quit smoking 40 years ago and hate it. But what I hate even more is government intruding in our private lives and regulating our private conduct--the Nanny State. So I don't like this law. But my vote doesn't count. It is a law and it needs to be honored.
November 29, 2010
Website Traffic. Today this website surpassed 60,000 hits since first being set up in June 2007. Given the limited audience, that's a lot and I am gratified.
FBLS Department. In an apparent effort to show that it has some relevance, the Department has published The Top Ten Reasons Tenants File Petitions for an OAH Hearing. You can read it here. http://www.dfbls.az.gov/userfiles/files/administration/Petitions_TopTen.pdf
Its not really all that bad as far as it goes. They get the top ten reasons pretty accurately. But you can just see the effects of being generated in a bureaucracy where all kinds of people probably needed to approve it before it could be released on the Department's web site. As a result it does not really provide much guidance as to how complaints can be avoided when one of these reasons is involved.
Reason 1. Failure to Maintain Premises. Why not just say that the landlord is required to maintain all common areas and vacant lots in a neat, clean and safe condition but tenants are required to maintain their lots in the same manner? Instead the paper simply refers to an OAH case by number but does not say how it can be found (go here and follow instructions to search by the case number: http://www.azoah.com/portal.html).
Reason 2. Trees. Why not just say tenants maintain trees on their spaces while landlords maintain them everywhere else? The case reference is to the case I have posted on this site that disagrees with and criticizes the first case mentioned by the Department under 1, above. Here is the tree case: http://www.michaelparhamlaw.citymax.com/multimedia_Trees.html
Reason 3. Water Usage. The first paragraph is okay. But why not just say in the second that the single family rate is different from the rate paid by the park and may actually be more than what the landlord pays (though in the City of Phoenix and some other places it is lower).
Reason 4. Septic Systems. Why not say that many complaints are the result of tenants overloading or actually sabotaging septic systems out of spite against their landlords while other complaints are because some landlords do not maintain the systems or because the systems no longer function properly due to soil percolation problems or solid matter in the field lines clogging them up and preventing drainage.
Reason 5. Sewer Line Failures. Why not say that the lateral line from the tenant's home to the landlord provided sewer outlet that runs under the rental space is the tenant's responsibility if it is blocked or leaks (with a few exceptions) unless the outlet is off the space and more than 25 feet from the home under ARS § 41-2155 (E). Otherwise it is the Landlord's responsibility.
Reason 6. Gas Lines. Like sewer lines, the line from the home to the meter is the tenant's responsibility unless the meter is off the space in which case the tenant is responsible for only the first 25 feet. The landlord is responsible for the rest of the system. Old galvanized gas lines are wearing out across the state and many systems reach a point they need replacement. But replacement is hugely expensive and often triggers large rent increases so landlords will try and make limited repairs and partial replacements. That's okay as long as the result is a safe system. Gas companies, local code enforcement agencies and the Corporation Commission are being diligent in requiring that systems needing repair or replacement are dealt with, and a complaint to one of them makes a lot more sense than one of these ALJ compliants.
Reason 7. Drainage Issues. The explanation is not bad. Tenants often jump to the conclusion that if water is getting under or into their home, it is the park's fault. Actually it is usually NOT the park's fault. If drainage problems show up for the first time many years after the home was delivered to the lot, it is obvious something has changed to cause it. Find who is responsible for that change and you usually find who is responsible for fixing the problem.
Reason 8. Shotgun Petitions. This is a good term. When a tenant or group of tenants are just out to "get" the landlord, they will try to create as many complaints as possible to make the park look bad. But in reality they are the ones that look bad and it becomes hard to take them seriously. Tenants who have a serious and legitimate complaint do themselves a disservice by lumping it in with a bunch of garbage. People looking at the totality of the complaint tend to think the whole thing is garbage.
Reason 9. Rules Overiding LTA. This advice is absolutely correct and is clear. Park rules cannot contradict the requirements of the MHP LTA.
Reason 10. Temporary Trash Charge Suspensions. Snowbirds will ask to have trash (and other utility charges) temporarily suspended by landlords separately charging for them. Why not just say that whether the park needs to honor such a request depends on whether the utility company providing service in the area does so as part of its single family residential service rate structure. In the case of trash, some municipalities allow temporary suspensions while others don't. Likewise with temporary suspensions of water and sewer service.
All in all this document is not a bad piece of work and for that matter is the best piece of anything creative on the Department's web site. It actually gives some guidance to people in how to approach the subject of making LTA complaints to the Department. I would like to see more of this kind of effort from them since it looks like we are stuck with the Department, at least until the start of the next legislative session.
November 25, 2010
TSA Retaliation. Here is a link to a You Tube video put up by a member of our MHC industry who was hassled and apparently singled out for retaliation by TSA agents at the Phoenix airport. Remember them when you fly and remember what they pulled here. http://www.youtube.com/watch?v=2XhnZlmLGK8
I was a low level member of the Nixon Administration a lifetime ago and witnessed the effects of government abuse on the nation. This kind of conduct is frightening. It really hits home when it happens to someone you know.
November 20, 2010
Quantitative Easing. Last Saturday I found a You Tube video that had just been posted explaining how "quantitative easing" works. Since I believe this is a potential disaster that will contribute to skyrocketing inflation that will hurt all sides in the MHC industry, I posted a link to the video. When I discovered it, there were only around 12,000 hits. This morning, one week later, there were over 2,100,000 hits. Clearly this has gone viral, probably because it is a humorous and clear explanation of a complicated subject. If you missed it, here again is the link: http://www.youtube.com/watch?v=PTUY16CkS-k&feature=player_embedded
Tree Maintenance in MHC's. For years a dispute has been going on between park landlords and AAMHO and various tenant associations over who is responsible for maintaining trees on rental spaces in MHC's. This dispute was enflamed by an erroneous ALJ decision in a Tucson case in 2007. It was erroneous because it failed to take into account a couple of very important statutes that weren't even mentioned in it. That oversight was due largely to the failure of the park (which represented itself) to bring those statutes to the attention of the ALJ.
A new decision, however sets the record straight. This decision analyzes all of the relevant statutes and also analyzes the 2007 ruling. The new decision concludes that the law clearly places responsibility for maintaining trees on rental spaces on tenants.
That does not prohibit parks from voluntrarily maintaining trees throughout the community if it so chooses. There are many policy reasons why a park may choose to do so, including uniformity in appearance, quality of care, and safety. But the park can also require tenants to maintain the trees on their spaces if it wishes.
Here is a copy of the decision: http://www.michaelparhamlaw.citymax.com/multimedia_Trees.html
Medical Marijuana. A voter initiative was recently approved authorizing medical marijuana in Arizona. The new law will go into effect when the Department of Health Services comes up with regulations for issuing cards to "disabled" people requiring medical marijuana for their "treatment" and additional cards for their "caregivers", and for licensing dispensaries to sell the stuff.
Briefly, a person who can convince a health care provider that marijuana will help him with a medical problem can obtain a medical marijuana card entitling him to buy a limited quantity of the stuff from a state licensed dispensary. His caregiver can get a similar card allowing him to get the drug on the patient's behalf. If there is no dispensary within a certain radius of where the patient lives, the new law allows him to grow his own limited number of marijuana plants.
The law prohibits use in a public place, and allows employers to prohibit use on the job by employees. It also holds cardholders responsible for operating vehicles and watercraft under the influence of marijuana.
State and local law enforcement personnel will not be enforcing drug laws against card holders whose possession and use complies with the new law.
The problem is that possession and use of any marijuana continues to be a serious crime under federal law. A U. S. Supreme Court decision in a case involving a virtually identical medical marijuana law in California held that the federal law continues to apply in California despite the state law purporting to make medical marijuana legal. That case was Gonzales v. Raich. You can read it here: http://scholar.google.com/scholar_case?case=15647611274064109718
The Obama Justice Department has announced a policy of not enforcing federal criminal marijuana laws against a person clearly and unambiguously complying with a state medical marijuana laws. You can read that here: http://blogs.usdoj.gov/blog/archives/192
So medical marijuana use and possession may be legal under state law with no local law enforcement taking place, but remain a serious criminal offense under federal law where prosecution authorities have announced a policy of no action. Its a federal crime in medical marijuana states without practical consequence.
Our problem is with the crime free addendum which most residential landlords are using. Here is what it says:
"Tenant, any members of the tenant’s household or a guest or other person under the tenant’s control shall not engage in criminal activity, including drug-related criminal activity, on or near the said premises. “Drug-related criminal activity” means the illegal manufacture, sale, distribution, use, or possession with intent to manufacture, sell distribute, or use of a controlled substance (as defined in Section 102 or the Controlled Substance Act [21 U.S.C. 802])."
That includes medical marijuana. The question is going to come up whether fair housing laws require a landlord, as a reasonable accommodation to a medical marijuana cardholder's disability, to make an exception to the crime free addendum to allow possession and use in accord with state law even though it violates a federal criminal law that is not being enforced.
I am not sure how this problem is going to get resolved. Stay tuned.
November 13, 2010
Here is an explanation of what is happening in the national economy. http://www.youtube.com/watch?v=PTUY16CkS-k&feature=player_embedded#!
November 11, 2010
FBLSD Licensees Involved in Park Models. The Fire, Building and Life Safety Department licenses dealers, installers, movers and manufacturers of mobile and manufactured homes, and factory built buildings. It used to have similar authority over park models, but lost that authority around 2003.
Some FBLSD licensees continue to be involved with park models. This raises the problem of co-mingling regulated and unregulated activities of licensees.
Part of the FBLSD licensing code is ARS § 41-2186 (21). This authorizes the Department to take disciplinary action against licensees for failing to work only within the scope of the license held. The FBLSD licenses are limited in scope to mobile homes, manufactured homes, and factory built buildings. They do not include park models.
A FBLSD dealer also involved in selling park models must be careful not to imply in any way that this activity is covered in any way by his FBLSD dealer license. The license number must not appear on any paper work in park model transactions. Sales staff must be instructed and supervised to ensure they understand this and do not even imply to customers that the FBLSD license is involved.
Care must be taken not to document any park model transaction with a manufactured home form showing the dealer license number. Do not co-mingle trust and escrow funds on park model transactions with manufactured home sale funds.
Its a good idea to follow similar procedures in accounting for and protecting buyer funds and seller titles to those required by the FBLSD for manufactured homes, but use different forms not containing the dealer license number, and establish a separate trust and escrow account for park models.
Essentially a dealer selling both manufactured homes and park models is running two entirely separate businesses under one roof. Take care to ensure that all consumer transactions in these two businesses are completely separate from one another.
Similar requirements apply to other licensees. Be especially careful not to use the FBLSD license data when dealing with local code enforcement agencies and in pulling whatever government permits are necessary when a park model is involved.
It does not appear that anyone licenses or regulates park model sales. Installation work probably requires a Registrar of Contractors licensed contractor. Since park models do not meet the definition of motor home or "house trailer" in the MVD licensing laws, they are apparently not subject to being licensed as vehicle dealers by the MVD. Most other RV sales would appear to require MVD dealer licenses.
Music Royalties. A number of RV parks have been receiving intimidating correspondence from an outfit named SESAC asking that they execute licensing agreements and pay fees to them for the public use of certain music.
The SESAC letter involves copyright law and the right to commercially use music. A copyright protects property rights of a person in music. Music rights are personal property of the composer and performer, and when someone wants to use it, permission must be obtained. Most public performances of music need to be licensed.
This is a requirement of U.S. Copyright Law. There are three recognized music licensing companies: BMI, ASCAP, and SESAC which exist to ensure that composers and performers are compensated when their music is publicly used. Each organization represents the rights of some copyright owners and collects licensing fees from organizations using their music. Almost all public use of copyrighted music requires a license.
These three organizations occasionally file suit against entities using music without being licensed for copyright infringement.
SESAC is the smallest of the three organizations, but may also be the most aggressive. Around ten years ago it sent a series of communications to dance studios across the country. It was reported that the SESAC computer simply produced a series of letters that apparently could not be turned off. I suspect RV parks are receiving a similar series of letters.
If your community is not engaged in the commercial use of music; if the park does not conduct or sponsor programs using music in community facilities, it is doubtful that any license is required. But public use can even include such things as using music on hold for telephone calls. Also, if music is being publicly used, it is likely that similar agreements would need to be signed with the other two organizations in addition to SESAC.
November 7, 2010
Marine Corps Birthday; Veterans Day. Wednesday, November 10 is the 235th anniversary of the founding of the Marine Corps in Philadelphia. The following day is Veterans Day. Remember them both, especially given the environment our uniformed services find themselves in today.
Americans With Disabilities Act. This law requires proprietors of "public accommodations" to make their facilities handicapped accessible at their own expense, regardless of age. "Public Accommodations" are defined to exclude residential communities. Thus as a general rule, the ADA does not apply to MHC's or other residential communities.
"Public Accommodations" do include places of public gathering. So in a MHC, if a clubhouse is restricted in use to community residents, their visitors and guests, it should not be considered as a public accommodation. But when the facility is opened up to members of the general public, the likelihood is that it will become one. The financial consequences of this could be catastrophic.
Most MHC facilities in Arizona were built before the ADA became law. Most do not comply with accessibility requirements of the ADA. The cost to the landlord of making them compliant can be huge. But if such a non-accessible facility is opened to public use, the legal consequences of being on the losing end of an ADA lawsuit can be just as bad--even worse.
Unless they are certain that their facilities satisfy ADA accessibility requirements, MHC landlords should ensure their facilities are not open to public use.
I mention this because in today's Arizona Republic, a columnist writes about her tap dancing recital. She does not live in a MHC and is in her 40's, but has been taking tap dancing lessons at the clubhouse of an Age 55+ park and recently performed in a recital there. This article indicates that the park is allowing members of the public to take lessons and perform in that facility. While I can't even guess at which park this is, I would be shocked if its facilities were handicapped accessible under the ADA. By permitting this, the park could be opening itself up to claims its clubhouse is a public accommodation with the severe financial consequences that entails.
Bear in mind that "Public Accommodations" also include rental establishments. That likely includes the rental office of the MHC plus the restrooms and parking area serving it and the pathway connecting them. These already need to meet ADA accessibility criteria at the landlord's expense. But as long as the rest of the community facilities are limited to residents, guest and visitors, the ADA probably does not apply to them.
November 6, 2010
State Budget; FBLS Department. The defeat of two propositions allowing two dedicated State funds to be reduced with the money taken diverted to general State spending means that Arizona is again deep in the financial hole this fiscal year. The State must come up with hundreds of millions of Dollars in additional budget cuts and spending reductions that must be realized between now and June 30, 2011.
The media has been publicizing the huge impact this will have on State health care and education spending. But a conditional plan prepared earlier this year to deal with such an event also has an impact on our industry. Essentially, as I read it, the FBLSD will be eliminated with the OMH being funded by the Relocation Fund. The Attorney General's Office has apparently recommended against this. The apparent reason for that recommendation is that the Relocation Fund has specific dedicated purposes written into the law and a lawsuit to stop that would more than likely be successful.
But regardless of the future of the OMH in the contingency plan, the rest of the Department would appear headed for the scrap heap. Since much of its functions continues to be fluff--non essential governmental intrusions into the private realm, for the most part that would be no great loss. But one exception is in the area of licensing, trust account controls and disciplinary enforcement of licensing requirements.
Arizona has a rich history of fraud and embezzlement by unscrupulous people in the manufactured housing business. It can be argued that one essential purpose of government is regulation in areas that lend themselves to fraud of innocent consumers. While I tend to cringe when advancing such a proposition, I have seen the widescale hardships resulting from unregulated manufactured home businesses preying on the public.
Despite my Libertarian instincts when it comes to Government intrusion in the markets, I think the licensing and discipline functions of the Department should be preserved. But in the contingency plans now on the books it seems to bite the dust.
If the OMH becomes fully funded by the Relocation Fund, the current large and improper amounts already being taken out of it by the Department will greatly expand, and it may be drained before the economy recovers and parks once again start being closed. In other words, when the time comes to again pay relocation expenses, there may be no money left in the Fund to pay them.
But that's AAMHO's problem and it doesn't look like they are interested in preserving the Fund.
Here is a link to the conditional State plan: http://www.ospb.state.az.us/documents/2010/Final%20Contingency%20with%20Impacts%20Comments%20with%20Sub-Totals%20041610.pdf
I am not an economist. But I read the papers and follow the financial news. it looks like the Government is creating tons of new money out of thin air. The effect of that would logically be dilution of the value of existing money. That means that ultimately it will take more Dollars to buy products in the near future than it takes today. Many experts are saying it will take a LOT more Dollars. That is inflation. High inflation becomes hyperinflation.
I have nightmarish memories of the inflation of the early 1980's and to my uneducated mind it looks like we are headed down that same path. Yet Government inflation figures indicate there is no inflation--no CPI increases. A visit to a grocery store or gas station shows the falsity of those figures.
But CPI increases control Social Security increases and for the second year running, the lack of a CPI increase means there will be no Social Security increase. So tenants in age 55+ parks are in many cases going to be absorbing real world, large inflationary price increases with fixed incomes that do not change.
Parks, especially those increasing rents, need to be aware of this. Do everything you can to stretch every Dollar and minimize rent increases. It is in the landlord's best interests that his tenants remain able to afford to live in the community. The cost to the landlord of a tenant unable to pay rent, in terms of foregone rent, eviction expense, and the cost of dealing with the abandoned home is substantial.
October 31, 2010
Red Flags Rule. I have repeatedly written about this the last several months. It is a federal requirement that all credit providers adopt a formal Red Flags Compliance Plan and ensure they are in compliance with requirements of the law and regulations by December 31, 2010. Since MHC's usually bill for utilities after the fact and occasionally work out payment plans for delinquent rent, it is likely they are going to be considered credit providers (i.e., on a limited basis, at least, they extend credit). Parks that finance the purchase of mobile homes are clearly credit providers.
These federal requirements are designed to ensure that credit providers take steps to guard against identity theft by people hijacking sensitive information of tenants and applicants enabling the thieves to steal their identities or at least use their credit information. The formal Compliance Plan requires credit providers to think about what they can and should do to guard against these things, to put it down in writing, to have it approved at the highest levels of management, to formally adopt a written plan, and to then train staff personnel in the Plan requirements and ensure it is followed.
Credit providers found not to be in compliance with these requirements can be fined $3,700 for each instance of non-compliance. While it is unlikely MHC's will be subject to regular government compliance audits, if a victim of identity theft complains and a MHC is found to be the source of the information hijacking, it could wind up being penalized $3,700 for each instance it violated the Red Flags requirements after December 31, 2010. That could come to a lot of money.
Our office continues to see repeated instances of disregard of identity theft possibilities. It is common to get copies of ID cards, social security cards, SSN's, credit reports, etc. included with routine eviction case referrals. Any rudimentary Red Flags Compliance Plan will require that this sort of information be removed from tenant files and kept in separate files with access strictly controlled, preferably off-premises. It should never accompany routine eviction referrals.
All parks should examine their identity theft prevention procedures to ensure they are effective, and adopt a set if none are now in place. All parks need to have a Red Flags Compliance Plan adopted and in force by December 31, 2010.
We have a template for a MHC Compliance Plan and can assist parks in adopting them at a reasonable cost.
I mention this because a lot of companies have sprung up over the past few years over-hyping the dangers of credit providers not complying and using fear of the consequences to over-sell gold plated and hugely over priced Red Flags Compliance Programs. While it is important to be in compliance with the law by December 31, 2010, there is no need to panic and get ripped off for an elaborate program you neither need nor understand.
October 27, 2010
Investors Removing Homes. I was talking to a west Phoenix area park manager yesterday and learned that some California investors are buying newer homes in her park and moving them to California. According to her this is going on in parks around her as well. I used to see a lot of that in past years but not recently. Parks with first refusal rights in rental agreements may be able to step in and buy the home for the price offered by the investor. But the key is to be aware of what is going on with vacant homes and homes for sale in your parks. Its awfully hard to replace a home that gets pulled out of a park.
Rights of First Refusal. Many parks include these in their rental agreements. A properly drafted one allows the park to match an offer when a tenant wants to sell and buy the home for that price. This allows the park to keep the home in the park while honoring the law that prohibits interfering with a tenant selling at a price of his choosing. The right should be limited to cases where the buyer is going to remove the home from the park.
These are not perfect and often are violated. They are enforceable only against the tenant. If he breaches the right, it cannot be enforced against the buyer/new owner of the home. In that case the tenant/seller can be sued for damages for breach of contract.
Tenants Missing Mortgage Payments on Homes. More and more parks are selling homes to tenants and financing part of the purchase price. That means that in addition to paying space rent, the tenant is also supposed to be making monthly mortgage payments to the park at the same time. I have been hearing reports of tenants paying space rent but not making mortgage payments.
While a park cannot evict for non payment of mortgage installments, if the home is occupied the park can initiate a judicial repossession action against the tenant that will lead to a judgment directing the constable or sheriff to seize the home, remove all occupants, and return possession of the home to the mortgage holder (the park). If you have tenants living in the home delinquent on mortgage payments, it would be a mistake to let them get too far behind before taking action. Prompt action may result in payments being brought current.
If a home is vacant and payments are in arrears, no court action is necessary and the repossession can be accomplished quickly and at minimal cost.
Do not hesitate to refer these cases to the park attorney for action. A non judicial repossession of a vacant home should cost only around $100.
October 20, 2010
MHCA Tucson Conference. I will be in Tucson at the MHCA Fall Conference today and tomorrow. Among my topics for seminars will be reasonable accommodations for the disabled, the Red Flags Rule, 2010 changes to RV landlord tenant laws, maintenance issues, and a You be the Judge session with Scott Williams and Doug Nelson. In addition, Scott and Doug will be making presentations on property management and the self storage facility law. All of that is on Wednesday and Thursday.
Neal Haney and John Buric also will be making several presentations. This is a good opportunity to learn some meaningful stuff and get lot of hours of training meeting State requirements. Walk ins are welcome (but bring your checkbook). It is at the Hilton Garden Inn at the airport. be there at 7AM on the day you want to attend.
Here is a link to the program: http://azmhca.com/images/stories/pdf/2010%20fall%20flyer.pdf
Lienholder Liability on Abandoned Homes. I still get questions on what parks can charge lienholders when homes are abandoned. A lienholder is not a party to the tenant's rental agreement. Lienholders are not responsible for any charges provided in the rental agreement. They are, instead, liable under a statute, ARS § 33-1478 (A). This says they are liable for up to 60 days rent due when they are notified of the abandonment plus future rent until the home is disposed of. I read this as including utilities as well since they are part of rent.
But they are NOT liable for late fees, legal expenses, eviction costs, or anything else other than rent and utilities. And they are not liable for more than 60 days rent due when they are notified of the abandonment.
So be sure you know who the lienholder is and also be sure to get a notice of abandonment sent before more than two months' rent is due.
The tenant of course remains responsible for everything else, but it is unlikely it can ever be collected from him.
Do not hesitate to initiate landlord lien sale procedures if rent is not promptly forthcoming from a properly notified lienholder. Do not let yourself become an involuntary bank for the leinholder.
October 14, 2010
Names, Not Numbers. I was involved in the interview of a MHC manager by a fair housing investigator recently. The case involved a tenant's claim of unlawful discrimination. The claim is bogus and in my view will eventually be dismissed. But during the interview it became clear the manager didn't even know the tenant's name. He got the first name wrong, mispronounced the last name, and finally told the investigator he didn't know the names of most tenants. He simply refers to them by space number.
This created a terrible impression. It portrayed a manager who disregards the humanity of his residents and instead treats them as rent paying objects. That was unfortunate in this case since I know this manager and know that he is very good and treats his residents with respect and fairness.
I see this in parks all over the state. Managers will call me about space number ___. I usually must ask the name since I set files up by tenant names, not space numbers (except abandonment files). Every park has a space number ___. When asked the name, managers often must check the file, even for a tenant who has been in the park for many years.
I know how difficult it is to learn names of several hundred residents, but I think some effort must be made, even if only the names of those who are causing problems.
Referring to people by numbers calls up images of prisons or concentration camps where people entering them are assigned numbers and essentially surrender their names. MHC's are not institutions but are residential communities. Try to treat the residents as real people, as customers, and not as faceless numbers. It gives a much better impression to the world at large and, in this case, to an investigator who has the power to cause the park a lot of discomfort.
Abandonments. We are seeing a literal flood of abandonment cases and have been since early this year. It is fortunate I moved into my present location and picked up the services of Chris Francis. I couldn't cover the workload by myself.
Many referrals are showing huge rent balances, indicating parks are waiting many months, sometimes well over a year before referring the case. Abandoned homes are not going to mysteriously fix themselves if you do nothing. They will just sit there accruing rent arrearages and deteriorating and losing value until you get off your rear end and act.
From the time we get the case, it will take between 72 and 90 days on average to get the matter resolved which normally results in either a lienholder repossessing and paying rent, or the park getting title to the home. While we charge at our hourly rate for this (not a flat fee) the usual legal fees run around $450.00 plus around another $50 in out of pocket costs (more outside of Maricopa County). We handle abandonments state wide.
Some parks try to do it themselves, though the process is very complicated. Many who try wind up referring the case to us. But if you want to give it a shot, get the Purple Book from MHCA that describes the process.
But don't just sit around waiting for the problem to take care of itself. It won't. You need to do something.
October 13, 2010
Regulation of Park Models. Park models look like mini-manufactured homes. But legally they are not. As long as they are under 400 square feet, they do not meet the definition of manufactured homes and are not HUD labeled (NOTE that "expanded" park models which exceed 400 square feet are actually manufactured homes and have HUD decals).
Real (under 400 square feet) park models are not regulated by the Fire, Building and Life Safety Department. That is the agency that regulates the installation, etc., of manufactured homes. The agency at one time did regulate them but lost that authority around 2003.
Many people don't realize this and in fact I had forgotten about it until being reminded a few months ago by Chris Francis, my legal assistant.
This comes to mind because I recently had an installation contractor client cited by the Department for misusing his I-10G license to pull permits and install park models and accessory structures. If you have a Fire, Building and Life Safety Department license, be sure to verify what the scope of your license is and limit its use accordingly. If you are involved in both manufactured home and park model work, be sure to distinguish the two in representing that you are licensed to do the work. I am not aware of any license to do park model work. As far as I can determine, park models are largely unregulated.
October 10, 2010
Too Many Laws? Is there too much law? When I moved to Arizona in 1977, the books containing the Arizona Revised Statutes were only about a third of the number it now takes. The Legislative sessions only took 100 days. Now they drag on endlessly. There was only a single Court of Appeals. Now there are divisions, one in Tucson, the other in Phoenix. The one in Phoenix has nine judges. The number of Superior Court judges in Maricopa County is about five times greater than 1977. That doesn't count the vast number of Court Commissioners and pro tem judges working part time. There are about five times as many lawyers practicing in Arizona as there were in 1977.
Law has gotten to be a major industry that literally feeds on itself. The more things people "fix" with new statutes, the more Legislators believe needs to be done. Every appellate decision supposedly answering a question or settling a disputed legal issue actually plants the seeds for more disputes in the future. As a socierty we are strangling on law.
All this law imposes burdens on individuals and businesses. MHC managers going through manager training for the first time are amazed to hear they are covered by the MHP, Residential, RV Space and General landlord tenant laws, four different sets of landlord tenant laws, all requiring different forms. Renting a storage space may trigger the self service storage facility act. Of course, fair housing laws apply to everything we do. Cities and counties enforce zoning laws and building codes.
And then there are taxes. The new Obamacare law is going to impose a gigantic burden on small business starting in 2012, requiring them to file 1099 forms on all vendors receiving $600 or more a year including retailers like Staples and Costco. We already must cope with rental taxes and the normal vast array of payroll tax calculations and paperwork.
And its getting worse at an accelerating pace.
Here is a link to an article discussing this problem: http://www.nydailynews.com/opinions/2010/10/10/2010-10-10_drowning_in_law_a_flood_of_statutes_rules_and_regulations_is_killing_the_america.html
The Legislature is due to convene is just three months. That is a worrisome thought since they managed to really screw up the RV Parks Act last session.
No Social Security Increases. For the second year in a row it looks like there will be no increase in Social Security payments. Payments are supposed to increase every year to offset inflation. These are known as cost of living adjustments (COLA's). But due to a couple of factors, the way the government calculates inflation there has been none. Anyone who has been grocery shopping or paying family bills the last couple of years may wonder where the government gets its figures from, but that's the way it is.
For age 55+ communities where many people are dependent on Social Security, there will be hardships. Two thirds of Social Security recipients depend on it as their primary income. Many age 55+ park residents fall in this category. That means that in addition to absorbing Medicare cost increases and other real world inflationary increases with no increase in monthly income, they will also be absorbing rent increases.
Age 55+ plus parks should bear this in mind in calculating future rent increases. What the customer can afford is an important factor in pricing goods and services by any business. If a rent increase triggers abandonments or other kinds of vacancies by people no longer able to afford space rent, the increased amounts being collected from tenants who remain will be lost by the higher vacancy rate the increase causes.
October 2, 2010
Squatter's Rights. In Arizona we do not recognize "squatter's rights" in residential property. MHP's, however, encounter many situations involving squatters.
For example, a tenant may rent his home to someone without landlord approval. As between the occupant and the tenant/homeowner, the new occupant has the right to be there. But the home is on a rental lot in the landowner's mobile home park. Since rental agreements typically require approval of renters or prohibit rentals (subleases) altogether, the new occupant has no right to be on the landlord's land. As to the landlord, the occupant is a squatter.
Other common examples are unapproved "boyfriends" of female tenants who move in without approval (often with criminal records), beat up the tenant, forcing her to flee, and remain alone in the home; tenants who sell their homes to buyers who don't know they need approval from the landlord to live in the park; and tenants who let family or friends move in during periods of temporary absence. In each situation the occupant is not park approved but is living alone on the landlord's land. They are squatters.
ARS § 33-1433 allows a landlord to file an eviction action against anyone wrongfully in possession, and to recover holdover damages against him (two months rent plus double actual damages).
The practice in these cases is for the landlord to serve a five day demand for possession on the occupant (a "squatter's notice") and then to file an eviction action against him. In addition a 14/30 notice can be served on the tenant for allowing an unauthorized occupant to take possession of the rental lot without landlord consent, and a second eviction action could be filed against the tenant after that notice period expires. Normally this second eviction is not filed unless there is a prospect the tenant may try to move back in after the squatter is evicted.
As difficult as it may seem to get a "trespasser" off the landlord's property, it is far more difficult in other places. A number of states have laws extending certain rights to squatters and erecting procedural barriers to landlords quickly getting them off the property. It can run into the thousands of dollars and take months, sometimes years to get rid of squatters in some states.
Here is a link to a story out of Great Britain about a lady who almost went broke getting a squatter out of her rental house and then cleaning up after the devastation he left when he was finally removed: http://www.dailymail.co.uk/news/article-1316756/Mother-spent-50k-squatter-evicted.html#ixzz11AvUh9FI
Landlords need to be diligent about who is living in the park. Often the reason the person has snuck in and not sought approval is that he has a serious criminal record and represents a threat to the safety of others living there. A landlord turning a blind eye to these situations could be liable to others injured by the squatter on the premises.
Wacko Vindictive Tenants. I don't know if it's the economy, something in the water, or the effects of a periodic full moon, but I am seeing a large number of cases where tenants are becoming vicious against their landlords.
Recently I evicted a tenant in his 70's who, on the witness stand, expressed macho pride for having said he would kill the manager if he went onto "his" lot. He testified that he really meant it. The next week I evicted a tenant who loaded his space with junk and refused to clean it up. His entire defense was that the manager was a rotten person and was picking on him. He refused to testify at all about the condition of his lot.
Last week a tenant broke in to the water treatment and sewer connection areas of a park despite no trespassing signs in order to take photos and file groundless complaints against the park with the health department. In another park a tenant is setting traps on his space to harm people going on it, videotaping other residents, telling them he is going to "get them written up" and is going to get the manager fired.
In yet another park, a homeowners association officer was caught breaking into an electric pedestal to "monitor" power usage in another tenant's home so he could file some sort of complaint with the power company. In still another park a tenant who insists on speeding despite speed bumps almost hit the manager. When she told him to slow down he got out of his car, used body language indicating he was going to beat her up, used ethnic slurs to insult her, and said he would get her fired. It turned out he had served time for an aggravated assault in the park a couple of years ago but past management had let him stay.
A group of tenants filed an ALJ complaint against a park making a series of false claims of violations of landlord tenant laws because they are angry over what they think is an excessive rent increase.
These are just some of the things that have crossed my desk the past ten days.
The Great Recession. I listen to Rush Limbaugh. Yesterday a caller from Fort Mohave told her story about facing eviction from a mobile home park and facing foreclosure on her doublewide home
She and her husband, she said, are disabled veterans. They receive just enough income to disqualify them from any government benefits such as food stamps, but not enough to live on. As a result they have no resources, are facing eviction and have no where to go. Rush was in disbelief over this hardship, and even posted a transcript of the call on his website. http://www.rushlimbaugh.com/home/daily/site_100110/content/01125115.guest.html
It may not still be up if you click on this after a couple of days.
I was more surprised at his reaction to this call than the call itself. I hear these stories every time I go to court. In fact this one was not as bad as many I have encountered the last couple of years because as bad off as these people are, they at least have some income. I have dealt with many hard working people who have absolutely no income, cannot find work, have no family or friends to help them out, and no where to go when they are evicted. Frequently they are disabled and/or have small children. There are no government benefits available in these hard times, and the charities that normally help are tapped out.
These are terribly hard times for many people--people who have always been productive in the past but not cannot work or find work. Blue collar people working in the trades, especially construction trades, and disabled people are perhaps the worst off.
If Rush doesn't know just how bad things are for such a large group of people despite being pretty plugged into mainstream America. then the governing class probably doesn't get it either. Things are really bad in the world of mobile home parks, and anyone in the business in Arizona knows it.
September 25, 2010
Evolution of the Constitution. Sorry about the political reference in this link, but regardless of politics it graphically illustrates where I believe we as a nation are heading with respect to our Constitution. http://obamavconstitution.com/fullsize.html
Tree Maintenance in Parks. This has been a big issue in recent years. Trees get big and become difficult and expensive to trim and maintain. In an ALJ case in Tucson in 2007, an ALJ ruled that the landlord was required to maintain all trees in the park, including those on tenant spaces. He based his decision on ARS § 33-1434 (A) of the MHP LTA that says landlords are required to maintain the "Premises". "Premises" is defined as the entire park.
In this case the park represented itself. No one brought to the ALJ's attention ARS § 33-1451 (A) of the Act that says tenants are required to maintain that portion of the Premises that they rent. And that statute was not mentioned in the ALJ's decision. It is pretty clear that the Judge didn't know it existed.
This 2007 case turned the long standing understanding in the industry that tenants maintain spaces (including trees) and landlords maintain the rest of the park on its ear. In my view the decision was at odds with the clear meaning of the law.
Since then many claims asking parks to maintain trees on tenant spaces have been filed. I have been waiting for an opportunity to get another ALJ decision on this issue. It seems that day finally arrived yesterday. In another ALJ case out of Tucson, the sole and clear issue for the Judge is who, under the law, is required to maintain trees on tenant spaces. On the one hand the Judge has the 2007 ruling. On the other hand, there is my argument that the earlier decision is wrong since it completely overlooked ARS § 33-1451 (A) and basically wrote it out of the law.
It will be about two months before a decision is released.
Tax Valuations on Mobile Homes. I have heard reports that County tax assessors are over valuing mobile homes. That combined with tax rate increases can really increase tax bills on homes. Parks with park-owned homes should scrutinize their tax valuation notices to be sure they are not excessive. Take advantage of the appeals process if they are. This is just another effort by the government to protect their jobs and avoid layoffs by sticking it to the public.
Sheriff's Sales of Homes for Taxes. When personal property taxes on mobile homes become delinquent, County Sheriffs are supposed to seize and auction off the delinquent homes. In the past they have relly been careless about this. It was not unusual to see six or more years of delinquent taxes (plus penalties and interest) accrue on mobile homes before the seizure took place. Now I am hearing reports that homes are being posted for sale if taxes are only a year delinquent.
Be on the watch for these situations. Parks may be able to purchase homes for good prices at Sheriff sales. Also, if a tenant is a snowbird or otherwise may not find out about the posting and scheduled sale, it would be a good idea to alert him to it.
MVD Third Party Mobile Home Inspections. I have been writing about problems with the MVD and its use of private contractors to perform certain inspections we need in order to pursue landlord lien sales.
Until now, a third party could do a Level I inspection and complete a report identifying the VIN number on the home. But if the VIN could not be found, an in-house MVD inspector needed to come out and perform a second inspection and assign a new Arizona Special Serial Number if the original VIN could still not be found.
Assignment of a new number precludes a landlord lien sale under MVD regulations and requires a bonded title application to dispose of an abandoned home.
Now MVD is requiring these second inspections to be done by private contractors who also are to assign the new serial numbers. This is creating real problems. First, some of the contractors that are competent are being denied authority to do the second inspections and assign the new VIN's. Second, some of the paperwork I have seen on these new inspections and serial number assignments makes it clear the inspector doesn't understand what he is doing. Finally, outside of Maricopa and Pima Counties, there is a serious shortage of authorized firms available to do inspections. This has been a big problem, for example, in Mohave County which is loaded with parks and abandoned homes and park models.
MHCA is going to try and take this up with the powers that be at the MVD. But it is just one more example of how the public is affected by efforts to balance the State budget.
September 18, 2010
Rent Increases. Parks with January 1 renewal/anniversary dates, especially those with renewal one year rental agreements that go into effect that date, need to give rent increase notices 90 days in advance. That means around October 1, 2010. Notices sent by mail need to go out an extra five days early, or by September 25. Since that is a Saturday, they should go out no later than Friday, September 24. Also be aware that if a park is raising rent more than 10% compared to the rent a year ago, a second notice of eligibility for Relocation Fund assistance also needs to go out with the rent increase notice.
Mobile Home Sales Agents. About five years ago the law was amended to allow real estate brokers to list mobile homes and sell them if the home was incident to the sale of "an interest in real property". I opposed this at the time, believing that real estate brokers and sales people didn't get any training in the unique aspects of mobile homes. But the law was changed anyway.
It was my feeling at the time that the sale of any mobile home in a mobile home park was incident to the transfer of "an interest in real property". That interest is the tenant's interest in the rental space the home is located on. The tenant has a virtual perpetual lease on that space since the tenancy cannot be terminated or non-renewed without narrowly defined good cause. When the home is sold, that interest in effect is transferred since the park landlord must approve the buyer as a tenant unless he has good cause not to. Once approved, the buyer has the same rights of tenancy as the seller had.
This law allowed real estate firms to list and sell mobile homes. As it turned out, the law actually satisfied a need in the industry. Except for Maricopa and Pima Counties, there are not enough mobile home dealers interested in taking listings from mobile home park tenants in the State and actively promoting them. Thirteen Counties are really under served by dealers interested in this business. Allowing real estate brokers to serve these customers went a long way towards satisfying this demand.
The major tool real estate brokers use to publicize listings is the Multiple Listing Service. Regional associations of Realtors operate the MLS and control what can and cannot be listed. In so doing they try to ensure that broker listings are consistent with Arizona law.
Mohave County is an area loaded with mobile home parks, both in Kingman and the many communities along the Colorado River. Recently the local Realtors association directed brokers to remove all mobile homes from the MLS and not to list any more mobile homes. The association is concerned that a mobile home is a piece of personal property, titled with the MVD and is akin to an automobile. The association does not recognize that the sale of a mobile home in a rental park carries with it "an interest in real property" that gets transferred on sale.
Mohave County parks tend to be age 55+ communities. The effect of the Realtors' decision to "de-list" mobile homes in parks is to deprive seniors in Mohave County of their principal opportunity to sell their mobile homes. This is going to create hardships on park residents there.
Unless the Realtors change their mind, either local dealers are going to need to step forward or parks without in house dealerships are going to need to set them up.
But that is only a small part of the fix. The main asset the real estate brokers have is the ability to widely publicize listings through the MLS. There is nothing comparable in the world of mobile home dealers. No matter how good a dealer is or how much he advertises and promotes his listings, nothing he does can compare to the exposure a home listed in the regional MLS gets.
This decision may be replicated in other Counties in the near future.
This is an area in which a third party's decision harms both parks and tenants. In the past, MHCA and AAMHO would recognize a common problem and would work on a joint solution. That would really be timely now with the legislature due to go into session in January. But AAMHO's sole purpose-in-being these days seems to be to fight landlords on everything so I don't see any prospect of trying to address this problem with a piece of legislation making it clear that real estate brokers can list mobile homes in mobile home parks.
Water Utility Charges. On August 8 I wrote about a new law prohibiting utility companies from making the landlord pay utility bills of the last tenant before allowing service to the new tenant who wants to set up an account. This had been a problem in Tucson and elsewhere. Of course it was limited to parks in which the water company or municipality provided water service direct to the tenant and directly billed the tenant.
The City of Glendale has come up with an end run to get around this law. It now is going to limit future water service accounts to the land owner. In order to get water service the customer will need to prove he is the owner of the service address. The net effect of this in rental properties is that tenants will no longer be able to get service in their own names. All service in rental properties will need to be in the name of the landlord who, of course will then be liable on the utility bill. That means landlords will need to separately charge tenants for water service each month.
So far, Glendale is the only place I know of that has done this, but look for it to spread. It will only apply to new accounts. Existing accounts in the names of tenants will stay that way. But when tenants move and those accounts are closed, new accounts will need to be in the name of the property owner.
September 11, 2010
Veterans. This is a pet peeve of mine. I frequently get calls about people either claiming or perceived to be disabled. When I ask what the disability it, I all too often get the response that "he is a veteran". Sometimes I get this as an explanation for why someone is acting crazy or violent: "Well, he is a veteran".
Somehow in the minds of a lot of people being a veteran means someone is a nut case or is handicapped. That is just plain stupid.
Anyone who has served in the armed forces is a veteran. There was a time in this country when we had a draft, that most men served in one of the services and were classified as veterans when they got out. Now with an all volunteer military there are fewer people serving and in the last ten years a large number of them have served in war zones becoming combat veterans.
Most returning service members resume normal lives. Most are not disabled. Most of the disabled veterans are able to adjust to their disabilities and lead normal productive lives.
Being a veteran neither explains nor justifies abnormal, bizarre or violent conduct. People who are caught conducting themselves this way sometimes try to excuse it by claiming to be veterans, as though this should get them off the hook. Most times they are lying about their status and in the process demeaning those who actually served.
Veterans should be honored and respected for their service. They most certainly should not be pitied or looked down on because of it. Their abilities should not be regarded as being diminished as a result of serving their country. Most importantly, being a veteran does not in any way imply that a person is disabled.
September 9, 2010
New Articles. I have added three new articles on the MHC Articles page. They are the top three.
Abandonments. Abandoned homes continue to increase. I don't know if its a sign of the times, the result of our getting more work into the office, or both. What I do know is that large numbers of people are being forced to walk away from their homes and the resulting problem is dumped at the feet of the parks. At the risk of being repetitive, I will say it again. Do not turn a blind eye to abandoned homes. The problems will not simply disappear. When you discover an abandonment situation, immediately notify the lienholder if there is one. If nothing seems to be happening take action to begin landlord lien sale proceedings. As long as you do nothing the home will sit there, rent will not come in, and the vacant home will deteriorate and become an attraction to vandals and vagrants.
Rental Documents. Many parks are updating their leases, rules and statements of policy when preparing rent increase notices. Its surprising how many have become obsolete. If yours haven't been updated in the last three or four years, odds are they are out of date. Get an MHCA Blue Book and review what you have against the templates in that book. We can review the result before they are finalized if you want.
Rent Increases. Remember that if your park has a January 1 renewal/adjustment date, rent increase notices must go out in September. To be safe, get them out no later than September 25. Also if your increase will be more than 10% compared to rents in effect January 1, 2010, you need to also sent a Relocation Fund eligibility notice.
September 1, 2010
Rent Increase Notices. Many parks have January 1 as their standard park-wide rent adjustment anniversary. Since rent increases must be preceded by a 90 day notice, that means September is the month that rent increase notices for mobile home space tenants must go out. If notices go out by certified mail, they must be sent by September 25 at the latest.
Also, rent increases can only be effective at the renewal of a rental agreement. Month to month agreements renew every month so a 90 day notice given in September can be effective January 1. But for long term rental agreements, they must expire/renew on or before January 1 for a rent increase notice to be effective then.
Many parks use this as an opportunity to have their park rules, statements of policy and rental agreement forms reviewed. If yours haven't been reviewed in the last few years, this would be a good time to have it done. If you have me do it, I would want to see your current versions with proposed changes you would like to see made.
If possible they should be e-mailed to me in Word format so I can modify them and send them back with comments. Try to get them to me as early as possible since I am getting a lot of them now and it takes a little time to go through and modify them. Naturally you need to be a client for me to do any work. If you are not already one you would need to call our office and make the necessary arrangements.
The 10% Limit on Rent Increase Myth. One of the most common questions I hear at training seminars deals with the so called limit on rent increases. Many people think the law limits rent increases to 10% plus CPI (CPI is just about zero these days). That is wrong. There is no limit. Parks are free to charge whatever they want for rent as long as it is non-discriminatory and done in good faith.
But if a rent increase plus all other increases the preceding year exceeds 10% plus CPI, the park must also include a notice of eligibility for Relocation Fund assistance, notifying tenants they can move out if they want due to the large increase, and the Relocation Fund will provide financial assistance. A form for this is in the MHCA Blue Book.
Rent Increase Tips. Parks are under financial pressures and most will need to increase rents. But bear in mind that tenants also face these same pressures. Many have not had increases in income for quite a while. Inflation is on the rise (despite government claims to the contrary), many are unemployed or marginally employed, and for the second year in a row, Seniors will not be getting any Social Security increases. Increased Medicare costs means incomes of many Seniors will decrease. Consider these things when determining next year's rent.
August 30, 2010
Interactive Forms. Our firm has some notice forms available on line. They are the more common ones used, There are several classes of forms listed under the landlord representation page. There are categories for MHC's and RV Parks. Included are termination notice forms, abandonment forms, etc. We just finished changing them to make them interactive. That means that if you have Adobe Reader (its free so almost everyone has it on their computers) you can click on the form, fill it out on line, and then print it. Thanks to Mark Zinman who did this. It sure makes it easier to prepare notices.
Only clients can have access to these forms but they are free. If you have a client code, go here to get to them: http://www.wzlawpc.com/.
If you don't have a client code, call Denise at our office. Give her some basic information so we can get you into our system. If you have been getting invoices from us, you are already in it so it should just take a minute or so to get the code.
August 28, 2010
Yuma MHCA Training Class. A good attendance and many good questions last Friday at Yuma. The night before a huge storm blew through causing lots of damage to many area MHP's. A couple of attendees had to cancel to tend to damage in their parks. But the rest of the people signed up attended, and are probably spending the weekend digging out.
Abandonments. I continue to be amazed at the volume of abandonments I am seeing. Its a good thing I moved to the new firm and acquired the assistance of Chris Francis. I would have never been able to keep up with the workload.
Tucson Conference. The final agenda has been put together for the MHCA Tucson Conference and I am hopeful it will be up on the MHCA website shortly. But its not up yet.
August 20, 2010
Statements of Policy. I have been encountering a number of parks recently that have rental agreement forms and rules and regulations but do not have Statements of Policy. They seem to be unaware that the MHP LTA requires all parks to have them in place. The law, ARS § 33-1436, has required them since 1987.
In that year, there was a problem in the industry with parks closing and their land being redeveloped. Tenants who had recently bought homes in them were forced to move out at huge expense. A number of reforms were enacted that year to help avoid those misfortunes. One reform was a requirement that parks publish declarations covering such things as how long they expected to remain in business as rental communities, whether there are formulas for rent increases, what the size requirements for homes are, etc. These declarations are called Statements of Policy.
Statements of Policy must address a number of issues. They must have expiration dates. They can only be changed at their expiration and even then only with 60 days notice to all tenants. The effect of not having them or of violating them is fairly uncertain. In one area, however, the effect is clear. A park changing use of its land (going out of business as a park) before the time declared in the Statements of Policy must pay a penalty to the State for each tenant who moves his home out at the expense of the Relocation Fund.
One of the issues to be addressed is whether the landlord is granting tenants a right of first refusal to buy the park should it get an offer from someone to buy it. Any park granting tenants (or anyone else) sugh a first refusal right is probably making a mistake. The existence of such a right can hurt market value of a park since a buyer may have a group of tenants step in front and match his offer. Since the law does not nail down such things as how long tenants have to match the offer, whether they must be equally credit worthy if part of the price is to be landlord financed, or whether the park must offer the same terms, the first refusal right could make selling a park nearly impossible.
Park operators who have never issued Statements of Policy since purchasing their parks may have a hidden problem lurking. If the person who sold the park to the current owner had Statements of Policy, and if they provide that they automatically renew if not changed from year to year (a common provision), the current owner could find himself bound by his seller's Statements of Policy even if he doesn't know they exist. If the Statements of Policy have a provision granting tenants a first refusal right, something that is rare but not unheard of, tenants could spring this on the landlord when they learn of a pending sale. That could (and on one occasion at least, has) screw up a sale.
Parks without Statements of Policy should adopt them but first should try to learn if the prior owner had them and if so, what they said.
August 16, 2010
Third Party Inspections--CORRECTION. After reading my August 7 post, Michelle Fox of Sierra Title (which is NOT one of the fly by night outfits I referred to) e-mailed me to point out that when a VIN cannot be found by a contract inspector and the MVD needs to send one of its own out, it is still a level I inspection that is done, not a Level II like I said. She reminded me that MVD gets unhappy if a Level II is requested on a mobile home. It is still a Level I that is requested.
She also emphasized the need for parks to expose the VIN's before the contract inspector comes out. She pointed out that one of the main reasons for no VIN found reports is not that it is not there, but that the park simply did not expose the area where the VIN could be expected to be found. Failing to do this just adds to the time and expense of the process.
August 14, 2010
Jury Trial Waivers. These are included in most residential rental agreement forms. The purpose is to get agreement that court cases between landlords and tenants will not result in jury trials. It is especially designed to avoid jury trials in eviction cases. These are still tried in court, but the case is decided by the Judge, not a jury. Jury trials are extremely expensive and time consuming for both sides and the threat of a jury trial in the past was often used by tenants clearly at fault in eviction cases to extort an unfair deal out of a landlord to avoid the expense of a jury trial.
Every time a jury trial waiver has been attacked, it has been upheld. It is clearly constitutional since the state constitution itself provides that a jury trial can be waived. In rental agreements, both sides are waiving the right.
In a vigorously litigated case where the tenant was represented by a very capable lawyer, the legality of a jury trial waiver under the Long Term RV Rental Space Act was attacked. The Superior Court after a year of extensive briefings and arguments, has just decided that jury trial waivers are lawful in Long Term RV Space Rental Agreements.
LLC and Corporate Existence. LLC's and corporations are created in Arizona by filing papers with the Arizona Corporation Commission. Out of state LLC's and corporations can only do business in Arizona by filing papers domesticating themselves in Arizona with the Commission. To remain in existence or to remain qualified to do business in Arizona, corporations (but not LLC's) must file annual reports with the Commission.
In the past the Commission has mailed annual report forms to corporations in advance of their due dates. If a corporation failed to file on time, before revoking its charter or authority to do business in Arizona, the Commission would mail warning notices to the corporation alerting it to the imminent loss of its charter or authority.
Loss of a corporate charter or authority to do business could result in loss of the liability shield protecting the principals from liability on corporate obligations. It could also result in serious tax consequences.
Due to budget cutbacks, the Commission will no longet be mailing annual report forms out or sending warning notices. The responsibility is now solely on the corporation to enusure its filings are current.
Here is a link to a notice of how to file reports: http://www.azcc.gov/divisions/corporations/AnnRpts/ARfilingoptions.asp#. Here is one giving instructions: http://www.azcc.gov/Divisions/Corporations/annrpts/arinstruct.asp.
Finally, to check the status of your corporation or LLC, you can go here: http://starpas.azcc.gov/scripts/cgiip.exe/WService=wsbroker1/connect.p?app=names-report.p.
Statutory Agent Designations. Residential landlords must designate statutory agents for service of legal papers such as lawsuits in their rental documents. Corporations, LLC's and many partnerships must name statutory agents in their organizational papers that are filed with the Corporation Commission (for LLC's and corporations) or Arizona Secretary of State (for certain partnerships).
If a statutory agent is changed or disappears and new statutory agent information is not filed with the state agency involved, a lawsuit would not be able to be served on him and some form of alternative service would be made. That may or may not get the suit to the defendant. So it is important to have current statutory agent information on file with the Commission or Secretary of State.
I am named as statutory agent by many LLC's, corporations and partnerships, and in a great many rental documents. Since I have moved, the address shown for me is now obsolete. Some people have named me without my knowledge.
Whatever the case, it is important that anyone naming me as statutory agent file a change with the responsible state agency and note the change of address in the rental documents. The Commission charges a $5 fee for each change in statutory agent information filing.
Arizona Corporation Commission Filing Delays. The Commission has been hard hit by budget cuts and has passed a disproportionate percentage on to the Corporations Division that holds LLC and corporate filings. In the past there have been big delays between when something is given to them and when it is officially filed. This has gotten much worse in recent months. When important LLC or corporation filings need to get done to enable a park to sell or get refinanced, we have been able to pay a $35.00 "expedited handling" fee to move that filing to the head of the line.
Two months ago I filed three statutory agent change of address forms for LLC's that had asked me to do so. The changes still have not shown up on the Commission on-line records.
Apparently to make even a routine change like this which is nevertheless very important, it is going to take an extra $35 apiece to get it done in a timely manner. That takes it from $5.00 to $40.00.
August 9, 2010
Williams, Zinman & Parham P.C. Website. Finally our firm website is up and on-line. It will not have a blog like I have here, and it will be more of a static site. But there will be occasional notices and articles posted so it would be a good idea to check it every once in awhile. Here it is: http://www.wzplegal.com
Perhaps the most useful feature is the availability of the most common kinds of notice forms for MHP's, RV Parks and residential tenancies. The forms are available only to clients of the firm who need to call in and get a user name and password assigned. If you have been a client of the firm in the past or have ever been a client of mine, you can get these by calling Denise at (480) 994-4732. If you are not in the firm data base (and many of my clients are not) you will be asked for some basic information to get a client file opened. This won't take long and there are no charges involved.
If you have park owned home rentals be sure to ask for access to forms for residential tenancies as well as MHP and RV Park tenancies.
These are just a few basic forms and are no substitute for getting the MHCA forms books which are far more extensive.
August 8, 2010
Utility Water Charge Practices. In some areas such as Tucson, where water utilities directly charge tenants for water, some of the municipal water providers were refusing to open new accounts for the purchasers of homes in the park unless the landlord paid the delinquent bill of the former tenant. This amounted to nothing more than extortion since there was no lawful basis to hold the landlord liable.
Now a new law is in effect that prohibits this. The new law, HB 2450, prohibits this for a residential property consisting of four units or less. A utility may argue that the park is more than four units. But my reading is that the reference is to the number of units covered by the former customer's account, meaning it is the single rental space that is addressed.
It seems pretty clear that the law is protecting purchasers of single family houses, duplexes and fourplexes covered by a single account. In the case of a park, the former homeowner on park property had an account covering only one unit.
A similar situation exists in condos where each condo is separately owned but all are in a single large complex. The law would seem to treat the condo as a single family residence and protect the buyer and the condo HOA from liability from the seller's unpaid water bill. In the same way the law will protect the mobile home buyer and the landlord from similar liability for the seller's unpaid water bill.
See the bill here: http://www.azleg.gov/legtext/49leg/2r/bills/hb2450h.pdf
August 7, 2010
Third Party Inspections; Fly By Night Know-It-Alls. The MVD is no longer doing Level I inspections on mobile homes or RV's in parks. This has been the case in Maricopa and Pima Counties for a couple of years. Now it is in effect state wide. Third party firms under contract with the MVD will come out for a fee, inspect the home, and give the park a Level I inspection report. Only if the Level I inspector can't find the VIN number will the MVD send out an inspector to do a Level II inspection and more than likely assign a new Arizona special serial number. There are problems with this in all but Maricopa and Pima Counties. In those two counties there are firms that know how to conduct inspections. They also have a basic understanding of the MVD regulations for landlord lien sale and bonded titles. I can't say the same for firms in the other 13 counties. Here are some of the problems.
Incomplete Information. The list of third party firms authorized to inspect units published by the MVD is incomplete.
Inadequate Training. Third party inspectors receive MVD training on how to inspect vehicles and locate VIN numbers, and are given other important information. But the training focuses on motor vehicles, not RV's and mobile homes. Managers are going to need to accompany these inspectors to help locate VIN's and measure units.
Price Gouging. There is no uniform fee structure these firms use and some, especially in remote locations, are charging outrageous fees to inspect units. It may be possible to work out a deal with a select few firms statewide to inspect units everywhere. If they can get decent volume they may be able to make runs to remote locations at reasonable cost. This is only just now being explored. Meanwhile, try to get more than one bid for this service and don't be shy about having firms bid against one another for the job. Be sure to have all abandoned units inspected in a single visit to avoid repeat trips out.
Stupid, Ill Informed Inspectors Giving Advice. There is an old proverb that says: "He who knows not and knows not that he knows not: he is a fool--shun him". Inspectors receive limited training on how to inspect units. They do not know the law or the relevant MVD regulations on how to deal with abandoned mobile homes. I have had reports of inspectors telling park managers they don't need to do all this landlord lien or bonded title stuff--just apply for an abandoned vehicle title. That is just plain stupid. MVD regulations only allow abandoned vehicle titles for motor vehicles and some trailers, etc. The abandoned vehicle procedure is wonderfully simple but is expressly not applicable to mobile homes. Just tell him/her to inspect the unit and keep his advice to himself.
Hustling for Business. Some will try to get you to use them to obtain your titles on abandoned units. I have yet to meet or talk to one who really know the ins and outs of landlord lien sale procedures since it is a mix of MVD regulations, MHP landlord tenant law and personal property lien law. I don't do inspections; it is a shame some inspection outfits don't avoid practicing law. One of them has gone so far as to hustle a landlord for his eviction business. Of course he can't represent anyone in court but obviously doesn't know that. Be aware of this and remember that in the end you will get what you pay for.
Landlord Liens. When a park completes a landlord lien sale on an abandoned home, it obtains a free and clear title to the home. But often when it enters the home after obtaining title, it finds furniture and furnishings belonging to the former resident. Recently a number of parks have expressed confusion over what to do with that stuff.
To begin with, the landlord only has a lien on the mobile home or RV (normally a park model) itself. It has no lien against the tenant's belongings in the home. In fact the MHP Landlord Tenant Act specifically says at ARS § 33-1480 that a landlord does NOT have a lien against the tenant's household goods. This does not apply to the mobile home since that is not part of the household goods, but it does apply to the contents of the home.
Parks obtaining title to homes with furniture and other possessions inside need to follow the procedures in the Residential Landlord Tenant Act for disposing of them. These entail posting and sending by certified mail a series of notices to remove the possessions, inventorying them, holding them either in the home or another secure location for a period of time, and then auctioning them off if the tenant fails to claim them.
This can be a real hassle and it is for that reason that I always encourage parks to give former residents liberal access to the home to get their stuff out, even after eviction. It's a lot easier to let the tenant get the stuff than go through the process of legally getting rid of them yourself.
One key point: The landlord lien sale of the home does not transfer ownership of the contents of the home. Though the successful bidder bought the home itself, the contents do not also pass to him.
Recreational Litigation. When times are tough, people try to blame their problems on others. This is becoming more prevalent in this age of victimhood where nothing is our fault and all of our ills are because someone else wronged us. When misfortune befalls us, someone must be found to pay. When someone irritates us, it becomes payback time. Payback often takes the form of filing lawsuits and government complaints. Even a groundless suit or complaint can be an effective way to gain revenge since the target must go to the expense and suffer the stress of defending it. Here are some recent examples:
Fair Housing Complaints. I have gotten two of these in in the last few days where the Hispanic tenant receiving a perfectly legitimate notice complained that the reason for the notice was his ethnicity. Even an obviously groundless fair housing complaint will trigger an investigation that will go on for 60 days or more. For most of that time it just sits on the investigator's desk, but the landlord still worries about it. We try to recognize this and spend as little time as possible on it while still effectively defending it, to try and keep legal fees to a minimum. Many Hispanics feel like they are really on the bullseye in light of SB 1070 and other legislation they believe targets them because of ethnicity. Often they will react to any adverse action as being targeted against them because they are Hispanic and will respond by filing complaints such as these.
Dismissed Eviction Lawsuit. A tenant sued a park for substantial damages because after filing an eviction, the park dismissed it, choosing to accept the tenant's unsupported claim he paid rent in cash and got no receipts. The tenant claims emotional distress for having to deal with this alleged wrongful eviction action. Of course that is absurd. This case points out the necessity of being careful before filing eviction actions and ensuring you have a legitimate case (which this park did have). It also shows that under-employed hungry lawyers will file asinine lawsuits in the hope of wringing out a settlement for nuisance value in which they will share.
ALJ Complaint. A group of tenants filed an ALJ complaint against a park and its manager alleging a number of improper actions by the manager. It waited until the manager had died to file the case. There is no limit to the depths to which some people will sink to gain revenge against their manager--even after he is dead. Sometimes my disgust with these people makes it hard to defend these cases in a professional manner.
July 31, 2010
Web Sites. I just put up a new photo of myself on the home page on this site. I hate having my picture taken because I hate seeing how old I'm getting. But this one isn't too bad. It was taken for the new and improved Williams, Zinman & Parham, PC website that will be on line in a few days (three months late, but who's counting?)
So our firm website will finally be up to date, at least for the time being.
The MHCA website is another matter. The association is on its second website and cannot seem to keep one up to date. Part of the problem has to do with limited resources. In a tough economy it has had to keep staff and payroll to a minimum, yet workload remains the same. Something must slip and here, part of what has slipped is website maintenance. Added to this are some personal emergencies that MHCA staff has been dealing with lately. This has further reduced the time available for critical functions.
I keep getting complaints about how useless and out of date the MHCA website is. I just ask you to be patient. Bear in mind that training and publication information is obsolete on that site. You can check my seminars page for MHCA functions where I will be.
As to publications, new and revised publications not shown on the MHCA website are the Orange and Turquoise books dealing with RV space rentals revised in 2010; the Storage Space book covering laws and rental forms for rental of spaces in park storage areas written in 2010; and the Blue Book that I just finished revising that should be available shortly. It also will have a 2010 revision date. You can order these by calling Nancy at MHCA at (480) 345-4202 or 1(800) 351-3350. The prices on the MHCA website are non member prices. They are much cheaper for members.
As to training, I have only one set the remainder of this year in Yuma the end of August. I am also at the MHCA Tucson Conference in October. See my seminars page for information. To attend, call Nancy at MHCA.
I hope to conduct an advanced management seminar in late 2010 but cannot get a commitment from MHCA yet.
Red Flags Rule. This is the federal rule I have written about that requires credit providers to have compliance plans in force by January 1, 2011. The rule is complicated. It specifically requires landlords that are not credit providers to only have plans in force to deal with discrepencies in addresses revealed in consumer reports on applicants or residents. Landlords that are not credit providers appear to be exempt from needing a full blown compliance plan.
The problem is that the FTC, which enforces the rule, has said it is taking an expansive view of who is a credit provider. A landlord generally gets rent in advance each month and therefore does not extend credit. But if it lets rent accumulate past the due date or enters into a partial payment agreement, it is then extending credit since rent is owed but an agreement exists for its later payment. That seems to be an extension of credit.
Since I don't know of a single landlord that doesn't make these kind of arrangements occasionally, in my view landlords are credit providers within the meaning of the rule and need to have compliance plans in place by January 1, 2011.
July 28, 2010
SB1070. There have been a lot of media reports about the federal court decision enjoining certain parts of SB1070. The fact is that the Court did prohibit parts of the law from being enforced. Those were the portions requiring local law enforcement officers to determine immigration status when there is reasonable suspicion a person is here illegally, requiring verification of lawful status of people in custody before releasing them, and a couple of other provisions involving a failure of suspected Illegals to demonstrate proof of lawful presence.
But there are several provisions that the Court is allowing to go into effect. These include provisions prohibiting local governments from interfering with enforcement of immigrations laws and allowing them to be sued if they do interfere or restrict enforcement; this is designed to prohibit "sanctuary cities". Another provision that will go into effect is one making it a crime to pick up day laborers if traffic is impeded. A third provision that will go into effect is one making it a crime to transport or harbor Illegals if another criminal offense is being committed.
In addition, a number of technical enhancements to existing laws dealing with employment of Illegals will go into effect.
I have practiced before Judge Bolton, the federal judge who issued this ruling. She is a capable Judge. Her decision will be unpopular but is well reasoned. Read it here if interested: http://content.clearchannel.com/cc-common/mlib/622/07/622_1280338186.pdf
The provisions that remain go into effect tomorrow.
Other Developments Concerning Illegals. I was with a park manager with a large Hispanic population. His park has had a large number of Hispanics leave in recent weeks, probably due to SB1070. One thing he pointed out to me that I wasn't aware of, is that these folks can't even buy or sell mobile homes. Banks and MVD offices will not notarize their signatures on title documents. I suppose that must apply to cars and other vehicles as well.
That is because of our notary laws. It is illegal for a notary to acknowledge a signature unless the person signing can present legal ID in the form of a federal, state or tribal ID card with a photo and personal description. Foreigh ID cards will not suffice. This makes it impossible for Illegals to buy or sell vehicles and mobile homes since their signatures cannot be notarized and since the MVD requires signatures on important documents to be notarized.
This can be a huge stumbling block when an Illegal needs to sell a mobile home or vehicle. He can't do it. That is probably going to contribute to the number of homes that wind up being abandoned as Illegals leave the State.
July 23, 2010
New RV Park Laws Effective July 29. Two bills were passed last legislative session that make amendments to the Long Term RV Rental Space Act. Both bills are effective on July 29. Here is a brief summary of each bill. For more details click on the link to the bill.
SB1146 amends the RV act to require landlords to permit tenants with park models to post either a "for sale" or "open house" sign either on the unit or in a window. Parks with rules that prohibit such signs should promptly notify tenants the rules have been changed to allow this. Note that the law does not require parks to allow signs to be posted on the lot or anywhere else--just on the unit or in a window in the unit. And only one sign at a time is provided for.
This bill also requires RV parks to advise buyers and sellers of park models when a buyer's application for tenancy is declined, within ten days after request. The reasons given the buyer who was rejected must be specific. The reason given the seller must only be general (e.g., unacceptable credit, unacceptable background), and not specific. Consumer protection laws prohibit landlords from giving out specific information on one person's credit or tenancy application (the buyer) to someone else (here the seller).
Finally the bill prohibits landlords from restricting tenants in their choice of sales agents or dealers when selling their RV's.
Here is a link to the bill: http://www.azleg.gov/legtext/49leg/2r/bills/sb1146s.pdf
HB2255 amends the RV act to prohibit non-renewal of expiring long term space rental agreements without "good cause". I have written several posts on this since it was proposed earlier this year. Essentially it turns long term park model space tenancies into perpetual leases. Its a bad and probably unconstitutional law but the RV parks industry did not meaningfully oppose it and has done nothing to challenge it since it was enacted.
The bill also creates new limits on "administrative fees" that can be charged when utilities are charged under the "ratio billing" method. The changes are largely meaningless and complicated but nevertheless need to be reflected in rental agreements used for long term tenancies by parks charging water, gas and/or electricity by pro-rating their costs under the ratio billing method.
Here is a link to the bill: http://www.azleg.gov/legtext/49leg/2r/bills/hb2255s.pdf
July 19, 2010
Abandonments by Illegals. SB1070 is apparently causing many Hispanics to move out of Arizona. Media reports are conflicting on this, but I have been hearing from more and more park managers that large numbers of Hispanics are leaving. That is unfortunate because I think the reason, SB1070, is greatly exaggerated. I do not believe this law, if it goes into effect on July 29, is going to really change the way immigration laws are enforced in Arizona.
But fear is a great motivator and in this case seems to be motivating people who are presumably illegally here, to leave.
That means their homes are going to be left behind and abandoned. Parks need to keep a sharp eye out for abandoned homes. When a home looks empty and rent stops coming in, check utilities and also see what the neighbors say. If the likelihood is that the home is abandoned, start a landlord lien sale procedure. Letting it sit there empty with no rent coming in will only worsen the situation.
Also, keep an eye out for squatters. Often when people abandon a home, they tell friends they can move in, disregarding the fact than it requires landlord consent for anyone to reside in the park. If you find squatters in a home, ask them to apply for residency and if they don't or cannot be approved, serve a five day demand for possession and if they stay there, refer the case for eviction.
These are hard times on everyone, especially illegal immigrants. To avoid becoming a victim of the times, parks need to be diligent in these areas.
July 16, 2010
Notices to Terminate Tenancies. I keep getting questions on the basics of how to give notices to terminate tenancies in parks. Many people still think they can terminate a tenancy at the end of the lease without cause. In addition to seriously being in need of manager training, these folks really don't understand one of the fundamentals of park management: tenants have a perpetual lease. The tenant cannot be forced to vacate without "good cause" even when his lease expires.
Anyway, I posted an article on the basics of termination of tenancies on the MHC Articles page. Here is a link: http://www.michaelparhamlaw.citymax.com/page/page/4695892.htm#aa
SAFE Act. As if this situation is not screwed up enough as it is, the newly passed Wall Street Regulatory Reform Bill is going to further confuse the situation. Authority over enforcement of the SAFE Act at the federal level apparently will be taken away from HUD and placed in a new Consumer Financial Protection Agency. The bill seems to give some protections to mobile home retailers and dealers helping with paperwork to place loans with third party lenders. However it does not seem to change anything for parks that finance their own sales of park owned homes.
It still looks to me like they are going to need to be licensed as "loan originators" under the federal law even though state law may not require it (depending on how you read the state law). The views I expressed in my July 10 posting remain the same.
July 11, 2010
Moral Relativism. How many of you have been told not to be judgmental? That you are intolerant? Heard the phrase "different strokes for different folks"? Or "anything goes"? In one way or the other, these are often reflections of the concept of Moral Relativism.
Moral Relativism is the view that what is right or wrong is not absolute but relative, depending on the person, circumstances, or social situation. It claims that what is truly right depends solely on what the individual or the society thinks is right. Because what people think will vary with time and place, what is right will also vary. If, however, changing and even conflicting moral principles are equally valid, there is apparently no objective way of justifying any principle as valid for all people and all societies.
So there is no good or bad. No uniform values. What Western societies may consider morally wrong is irrelevant in other societies which should not be judged by Western standards.
Laws flow from societal standards and moral values. For example many believe that most of our criminal laws can be traced back to the Ten Commandments and similar expressions of moral standards that would be enforced in civil society. When those standards are repudiated as simply one view of how things should be, entitled to no more respect than contrary views in other societies, things like genocide, slavery and misogny can result and be justified.
I think Moral Relatism has taken hold in many areas of our country including media, education, and now our national government. Increasingly it is taking hold in law. I think it represents a real threat to our future. As standard after standard is repudiated and replaced with the idea of "if it feels good, do it", anarchy is on the horizon.
Of course I also recognize that I may be over-reacting to a skewed view of what is going on and seeing goblins where there are none.
In any event, I have read a pretty good refutation of Moral Relativism. It is pretty dense reading so unless you are really interested in the subject, skip it. Here it is: http://www.peterkreeft.com/audio/05_relativism/relativism_transcription.htm
July 10, 2010
SAFE Act. In informal communications I have had with the Arizona Department of Financial Institutions, they make a distinction in the Arizona law exempting those "making" five or fewer mortgage loans per calendar year from people "originating" such loans. Under this logic, the exemption applies only to the lender himself. But an individual processing and negotiating the loan with the lender on behalf of the buyer is not himself "making" it and would need to be licensed as a loan originator.
The Department has a website page dedicated to the SAFE Act. But beware--it is not entirely accurate. For example the bill they link to as HB2143 is not the version that actually passed and was signed into law. It is a version that was completely rewritten before passage. The correct link is: http://www.azleg.gov/legtext/49leg/1r/bills/hb2143s.pdf
If an individual is involved in financing park home sales by processing paperwork and dealing with lenders on behalf of buyers, he should assume he needs a loan originator license from that Department. The only two arguable reasons to hold off are:
1. If the person is a park owner or employed by a park owner making five or fewer carry-back loans per calendar year on park owned home sales, and if an employee, is not specially compensated for placing the loans.
2. If the person is a sales person licensed to a park holding a dealer's license that assists in loan paperwork (clerical and support duties) for third party lenders but receives no special compensation for placing loans.
Those people holding off need to stay up to date on future developments in this area.
Here is a link to a Californhia WMA article discussing the status of the California deal with HUD: http://www.wma.org/news/index.cfm?appAction=displayRecord&searchCategoryID=1&NewsID=2260
July 8, 2010
SAFE Act. The Federal SAFE Act continues to be of concern to parks selling homes. I have been in touch with our State licensing agency and getting meaningful guidance is difficult.
The federal act requires "loan originators" to be licensed. Here the licensing is by the Arizona Department of Financial Institutions. They license under ARS § 6-991 et seq. A "loan originator" is one instrumental in the creation of residential loans secured on dwellings (including mobile homes). There are lots of exceptions. One is for someone "making" five or fewer mortgage loans per calendar year.
This seems to say that Arizona does not require parks selling homes and carrying back part of the purchase price (seller financing) to be licensed.
Parks financing more than five in a year do need to be licensed. Parks involved in third party financing for compensation also need to be licensed.
It is unclear whether "rent to own" deals or leases with purchase options constitute carry back financing within the meaning of the law. I have many problems with those forms of transactions and believe they will count. So in counting up the five seller carryback loans per year, include those deals as well.
The federal government has said in the past that the five per year exception does not apply to federal law requirements. It may well turn out that parks with that small volume of seller carrybacks will still need a federally sanctioned license. The feds are talking to several states including California whether to recognize the five per year exclusion.
Stay tuned for future developments.
July 3, 2010
I hate writing about this. It deals with embezzlement by managers from their employers. Embezzlement here is the taking by a park employee of valuable property coming into his possession as a result of his employment duties that lawfully belongs to the employer. It is a serious felony and long prison terms apply to embezzlement convictions.
Last week I heard about two embezzlement schemes. Both were perpetrated by managers that I knew and held in high regard. Both were motivated by financial pressures resulting from the horrendous economic problems so many people are having. But that does excuse the crime.
The first involved a manager keeping cash rent payments while crediting the tenant accounts with them. A variation of this is when a manager gets a blank money order for the rent, credits the tenant's account, and then fills in his name on the money order and cashes it.
The second involved a manager getting titles to homes and instead of putting them in the landlord's name, putting them in his name. The home then was either rented or sold by the manager who kept the proceeds. This can happen when a manager gets landlord lien sale or bonded title paperwork and substitutes his name for the park's. Or it can happen when a tenant about to abandon the home simply signs the title over in blank, with the manager then entering his name and transferring the title.
In all of these situations, the money or home lawfully was the landlord's property, and by taking it for his own use and profit the manager stole it and committed the crime of embezzlement. There are implications here for both managers and landlords.
Managers. The mind set here is often that you are only "borrowing" the money and will pay it back before anyone misses it. Sometimes you may think that since it is cash it is untraceable and you won't get caught. The first is simply a lie you tell yourself because you will never be able to pay it back The second is just wrong. In all of these cases there are a zillion ways you can and eventually will get caught. When you do, your landlord is not going to have any sympathy for you no matter how serious your personal problems are. The police will be called and a combination of forensics accounting and basic investigative work will quickly reveal what you have done. You will be arrested, prosecuted and likely convicted of a felony. Your life will be ruined. If you have been stealing home titles it is inevitable you will get caught since you will have left a paper trail about a mile wide showing what you did.
Landlords. Two aphorisms come to mind here: "trust but verify" and "delegation without control is abdication". Your manager is on site in daily contact with residents. He has many opportunities to steal from you. At a minimum here are some things you need to be doing:
1. Pre-employment reference and criminal background checks.
2. Pre-employment credit checks to ensure the manager is not financially overextended.
3. Monthly reconciliations of rent deposits with rent receipts per the park accounting ledgers. Also ensure that tenants shown as not having paid rent have been served with non payment termination notices and are evicted. When a manager says he is working with a non paying tenant with temporary problems, that is probably true, but you need to be aware that it is sometimes a smoke screen for a manager diverting that tenant's rent payments.
4. Surprise visits to the office to review accounting records.
5. Close monitoring of all situations involving abandoned homes and personally checking the title ultimately received when the matter is closed.
In summary, most managers are trustworthy. But in hard times, even honest people feel forced to give into financial pressure to dip into the till. Landlords need to ensure they have adequate controls over what is going on in the rental office so any improper diversion of park assets is promptly spotted. If you are a manager who has been taking money, titles or anything else belonging to the landlord, you are going to get caught. Your best bet may be to consult a criminal lawyer and then, subject to his advice, come clean with the landlord to try to avoid criminal prosecution. Many people still believe in redemption if a person steps forward and is honest about what he has done.
July 1, 2010
Why Are they Called "Mobile Homes"? I have occasionally brought up the fact that the name has nothing to do with their mobility (actually they are not at all mobile). The name comes from their geographic origin near Mobile, Alabama. People think I am crazy but I am right (though I may also be crazy). Here is an article explaining the origin of the name. http://www.snopes.com/lost/mobile.asp
Please note that the two books cited by the article are published by the Johns Hopkins University Press, a highly respected publisher of academic texts.
Looming Tax Increases. In six months a series of massive tax increases will take effect seriously reducing spendable income of ordinary folks and hurting business. Withholding taxes will go up; taxes relating to health care will take effect; personal deductions will be reduced; and the costs of almost everything will go up as business passes along increased tax expense in the form of price increases.'
Buisness taxes also will go up; depreciation and expensing of capital items will be curtailed; payroll taxes will go up; and generally the cost of each emplolyee will increase to the employer. One of the most prevalent ways of reducing business expense will be cutbacks on staffing.
The combination of these things means unemployment will go up and those still working will have take home pay reduced.
This is going to really hurt family parks with working middle class residents. But even age 55 parks will be affected as consumer expenses keep going up while retirement pay and Social Security remains the same.
Overhanging all of this is the certainty of major inflation on the horizon as the government is forced to repay the huge new debt that has been run up.
It is a a gloomy picture but landlords are going to be directly affected by it and six months is not too far away to begin planning for it.
Here is an article describing the coming tax increases. http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#
More on Mobile Homes. For more on this read here: http://www.snopes.com/lost/false.asp
June 27, 2010
Expanding Government Intrusions. It was inevitable I suppose, but still disheartening to see the rapid expansion of government controls in the rental housing industry. I will review a few developments here.
Red Flags Rule. If you Google this term today you will find 643,000 results. The Red Flags Rule is like the Internal Revenue Code. It has spawned an industry of firms that will, for a hefty fee, aid businesses covered by the rule comply with it. Much of what many of these firms provide is garbage.
Briefly, the Red Flags Rule is a regulation published by the Federal Trade Commission under its consumer protection authority to force businesses to develop written plans to combat identity theft. It applies to "credit providers" which the FTC seems to interpret as including landlords. You can read about it here: http://www.ftc.gov/redflagsrule
The effective date of enforcement under the Rule has been pushed back to January 1, 2011. The Rule requires written plans saying what the business is doing to identify "red flags" indicating a possible identity theft problem, and to state what its plans are to prevent identity theft. The plan also needs to specifically say what steps the company has taken to protect and safeguard customer information, and what procedures are in place to ensure those steps remain effective.
For big banks and other big credit providers, these plans can be horrendously large and complex. MHC landlords should have a much simpler task, but it is one that needs to be accomplished before January 1 since there are serious sanctions for non-compliance.
There was a lot of talk at the May MHCA Conference on this subject that scared the Hell out of many people. I think the problems have been over-hyped in an effort to sell compliance consulting services by a number of the new businesses I referred to.
I am in the process of developing a template of a Compliance Plan for MHC's and a training program that will be offered at the MHCA Fall Conference this October in Tucson. I also hope it will be offered again in the Phoenix area before the end of this year, perhaps as part of an advanced manager training class.
Our firm will assist parks in coming up with Compliance Plans at a modest cost. Parks need to be aware, however, that sloppy practices in filing and keeping documents containing sensitive resident information are going to need to change, and identity theft security measures are going to need to be put in place.
SAFE Act. This one produced 39,700,000 results on Google this morning. It is another federal law creating enormous confusion in the MH sales industry.
As part of the federal response to the housing market crash in 2008, the Safe Mortgage Licensing Act (SAFE Act) was enacted. It was intended to require licensing of "mortgage originators" to end a lot of abuses concerning bad and even fraudulent mortgage loans made by these people to unqualified home buyers simply to make a commission.
The problem here is confusion. The federal law seems to require loan originators to be licensed by states. Arizona licensing laws seem to exclude occasional sales in MHC's. I wrote about this on December 8, 2009 as follows:
"While this law does not target people making occasional loans on mobile homes they are selling, it is possible they could get caught up in a State's licensing scheme.
Arizona has a set of laws starting at ARS § 6-991 that covers licensing of "loan originators" and requires them to become licensed effective July 1, 2010. ARS § 6-991.01 (9) contains the following exemption:
"A manufactured home retailer and its employees if performing only clerical or support duties in connection with the sale or lease of a manufactured home and the manufactured home retailer and its employees receive no compensation or other gain from a mortgage banker or a mortgage broker for the performance of the clerical or support duties."
Common sense indicates that someone selling or renting mobile homes is generally not covered if not getting commissions from lenders for placing loans.
ARS § 6-991 (12) excludes someone making five or fewer mortgage loans per calendar year from the definition of "loan originator". But the requirement would seem to apply if more are made since the law applies to making loans to buy mobile homes."
Nothing has changed since I wrote that. But HUD seems to take the position that the Arizona exemption of five or fewer mortgage loans per year is not consistent with the federal law. So the whole area is murky. Its safe to say that if a park is making more than five loans financing park home sales in a year, it needs to be licensed as a loan originator. Otherwise its up in the air.
Immigration. The Red Flags Rule is going to require landlords to be on the watch for false ID and to take action when phony ID or information concerning identity is received. We all know that most false identification in Arizona received by landlords comes from Illegals. We can expect fair housing complaints to result from Illegals when they are the subject of actions resulting from the use of false ID. Just an example of efforts to comply with one set of federal laws creating problems under another.
And people wonder why there are so many lawyers around.
On the subject of illegal immigration, I am no fan of our Governor--I think there are too many areas of the budget she is afraid to cut and I dislike the "temporary" sales tax she got voted on favorably. But she is pretty good on calling the federal government out on its hypocritical stance on immigration enforcement. This video is a jewel: http://www.youtube.com/watch?v=bzDlN7VLmXQ&feature=player_embedded
FBLSD. Not the federal government but just as bad in its own way. The new Director seems to have had no effect. The primary goal of this agency is to preserve its existence and avoid further staff cut backs. It seems to have formed some sort of alliance with the leadership of AAMHO. The most alarming thing I have seen recently was the survival plan if its money from the state's general fund was cut off (that probably would have happened if the sales tax increase had not passed).
The plan was to shift virtually its entire operating expense to the Relocation Fund. Its bureaucrats were to have been supported by the taxes paid every year on their mobile homes by owners of those homes in Arizona. Since the Relocation Fund assessment stops when the fund balance reaches a certain level, and since operating the Department out of the fund would prevent it from ever getting there, that plan was in effect a targeted tax increase on every mobile home owner in Arizona. Of course the sales tax passed so that survival plan is not in effect--yet! But it shows the Department will do whatever it can to survive.
That's a disgrace.
June 19, 2010
New Takings Case. A new U.S. Supreme Court decision allowed Florida to create a new public beach by dumping sand in front of a private beach in the name of environmental preservation, without having to pay the owners of the formerly private beach the loss in value of their property resulting from that. It is a complicated case and probably not as bad a decision for property rights advocates as it first sounds.
What I like about the decision are the statements by four of the Justices that when a Court reinterprets the law to reduce or eliminate vested property rights, a "taking by judicial action" may occur obligating the State to compensate the property owners whose property rights were taken or diminished by the Court action.
In my practice this sort of thing is not uncommon. When a judge in an eviction case refuses to allow the property owner to get a writ of restitution within the five day period following the eviction judgment, the Court is allowing someone without a legal right to remain on the premises. When a Constable refuses to enforce a writ of restitution, action by a Court officer is permitting a non-entitled person to remain in possession. In post foreclosure cases, where enforcement of the judgment is delayed because the Judge feels sorry for the former owner and lets him stay there, that too can be a taking by judicial action. The examples are endless. Here is a key quote from the Opinion:
If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation.
You can read the Opinion here (the good parts are at pages 7-24): http://www.dep.state.fl.us/secretary/news/2010/06/files/08_1151.pdf
New and Updated MHCA Publications. MHCA now has available the following new or revised publications:
Storage Yard Rentals (Yellow Book). This is a new publication that Scott Williams and I wrote. When a park rents space in the storage yard and charges a fee for the rental, that relationship is covered by the self storage facility rental statutes. They are completely different from the other landlord tenant laws that apply in MHC's. The laws that apply to these rentals create a landlord lien against the items in storage and are largely concerned with how the lien is enforced when the renter is in default while protecting the renter's rights. These laws have been on the books for some 30 years but recent changes seem to make it clear they apply in park storage yards where separate fees are charged. This publication has two parts--an explanation of how the laws work and forms to be used in renting storage spaces and enforcing the lien on default.
RV Space Rental Forms (Orange Book). This book has been updated to incorporate changes to rental forms and notices resulting from the changes in utility rules and the imposition of the perpetual lease for long term park model space rentals that become effective July 29 thanks to the Legislature revising the Long Term RV Rental Space Act.
RV Space Manual (Turquoise Book). This book has been revised for the same reason.
A Note About MHCA Publications. The MHCA website lists publications and prices. Unfortunately it is horribly out of date and misleading. The website does not reflect these new and revised publications. For the publications it does list, it only shows the Non-Member price. Prices for non-members of the Association are much higher than member prices. The reasons for that should be obvious. Anyone interested in pricing or in purchasing books should call MHCA and speak with Susan or Nancy. Call (480) 345-4202 or 1(800) 351-3350. Also, anyone who has purchased the preceding version of a publication receives a substantial discount on the new version. Finally, although I write and update these publications, I do not share in the sales proceeds.
In this difficult economy, MHCA has had to keep staffing and expenses to a minimum. One of the things that has suffered is its ability to keep its website up to date.
Williams, Zinman & Parham Website. To avoid charges of hypocrisy, I should note that our firm website is also badly out of date--Even the firm name is obsolete. We too are working on getting it corrected but sadly, that takes time. One thing about this website is that it is so simple, I am able to personally do whatever it takes to update it. Although there are no fancy bells and whistles on it, it is up to date!
Park Refinancing. One of the things we do is prepare Borrower Opinion Letters for park owners to provide lenders when parks are financed or refinanced. That gives me some perspective on the environment for obtaining financing. A lot of parks were financed or refinanced over the last ten years. Many loans had long (e.g., 30 year) amortization schedules resulting in fairly low monthly payments, but the loans balloon (come due) after a much shorter period (maybe ten years). That means many loans are coming due now and it is necessary to either come up with a lot of cash or get a new loan to pay off the one maturing. That is a tough thing to do in this environment.
Why? For one thing, properties are not appraising as high as they did in the past. Many parks have higher then normal vacancy rates. Some may have been forced to cut back on maintenance. Credit standards have tightened up. So while interest rates seem to be pretty good overall, getting a loan in a sufficient amount to pay off the one coming due can be a problem. There are a few specialists around that know MHC's and are helpful in placing these kinds of loans, and money is out there.
But its safe to say that if your park has a loan coming due in a year or less, it would be a good idea to start looking around now for replacement financing.
I don't get into any of that. My role in this process comes at the end when the loan has been committed to and as part of the closing process an opinion of the borrower's counsel is needed by the lender.
June 13, 2010
SB1070--Ilegal Immigration. I have been writing on this since the bill was introduced in the Legislature last spring. The part that most directly affects residential landlords deals with "harboring". Harboring is knowingly (or in reckless disregard of evidence of unlawful status) providing shelter to Illegals. Under federal law harboring has been a crime for decades. It was originally enacted to deal with the sanctuary movement where bleeding heart do-gooders sheltered Illegals hiding out from immigration authorities.
SB1070 makes harboring a State offense if the individual sheltering an illegal knows he is an Illegal, or ignores clear evidence that he is, AND is engaged in the commission of another crime at the time. The new State law is designed to combat kidnappers, coyotes, drug gangs and other criminal enterprises involved with illegal immigration.
In my view a landlord without actual knowledge that an applicant or resident is an Illegal is not affected by this law. A landlord that actually knows a resident is an Illegal could be at risk if he was also involved in some other illegal activity under the new State law (he already has a problem under the old federal law).
The Arizona Republic ran some articles this morning about SB1070. Disregarding their editorial stance favoring open borders and sympathizing with the problems faced by Illegals, the paper ran a Q and A section dealing with landlord issues under SB1070. None of the "experts" on the panel were landlord tenant attorneys (all practice in the immigration area). Nevertheless they pretty much got it right and the section can be read here: http://www.azcentral.com/news/election/azelections/articles/2010/06/11/20100611arizona-immigration-law-scenarios.html
Be careful of the Republic's website. I have never seen so many pop-ups.
June 5, 2010
New Law on Private Trash Contractors. Over the years parks have had problems with municipalities when shifting from municipal trash collection to a private contractor. Typically parks can get trash collected much less expensively by using a private contractor. They can still charge residents the municipal single family residential rate. That means the difference goes to the landlord, not the municipality. This in turn allows landlords to minimize future rent increases, a constant concern in this era of tight budgets and competition for residents.
Municipalities hate to lose this business and have tried a number of mechanisms to prevent a shift of business away from them. This ranges from trying to enact laws prohibiting it (something I believe is illegal for a municipality to do) to simply threatening landlords with a variety of things if they make the shift.
This past legislative session, HB 2604 was enacted. This prohibits municipalities "from prohibiting or unreasonably restraining private contractors from delivering commercial or industrial recycling services or commercial or industrial solid waste management services within or to the municipality."
Some municipalities may try to get around this law by claiming parks are residential, not commercial customers. That is false. Trash service provided by parks to tenants is residential and they can charge it as such under the law. But service provided to parks by municipalities is commercial, at least in my view.
Any park converting to private service that is threatened by a city with sanctions for doing should point this law out to the person making the threats, Here is a link to the bill: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2r/bills/hb2604h.htm
Payments Received After Eviction is Initiated. This has become increasingly common. Many parks are bending over backwards to avoid losing tenants. They will let rent arrearages accumulate in the hope the tenant may eventually dig out of the hole. Most times it is a false hope but is understandible. Parks want to keep residents and avoid eviction expense.
But these hopes don't work out much of the time. Either the tenant may give up, vacate and abandon the home, or he may tough it out until the landlord finally decides to evict him
Eviction starts with the service of a 7 day notice. Once that happens, any payment less that the full amount then owed may be regarded as a reinstatement of the tenancy and as cancelling the 7 day notice. Unless the landlord wants to prolong the agony or the payment is substantial, it is best to refuse it. If it was mailed in or left in the drop box, it should be returned either in person or by certified mail.
After the 7 day notice matures without payment being received, the case gets referred to the park's lawyer who files an eviction action. The same principle applies. Unless full payment is received, a partial payment should be refused or returned. Acceptance of it may result in the eviction being dismissed and the park could wind up eating its court costs and legal fees.
What is full payment? It is the combination of rent (including rent accruing after the notice is delivered or the eviction is filed), utilities, late fees through the date of payment, court costs and legal fees. Anything less than that is a partial payment and unless substantial, it should not be accepted.
That doesn't mean the tenant will be thrown out. Parks would be well advised to do post-judgment payment plans. These are agreements entered into after the eviction judgment is signed. They give the tenant one last chance to pay and stay. A schedule of payments is worked out. The agreement says that the judgment won't be enforced as long as the payments are made on time, future rent is kept current, and park rules are complied with. But if the tenant defaults, the judgment can be enforced and the tenant required to move despite the age of the judgment.
These work out about half the time. Even when they don't, the park collects at least some of what is due and the tenant gets a little breathing room to make arrangements to move.
Obsolete Rules. This is a bad time to write about updating park rules. The economy is rotten, landlords need to minimize expense, and no one wants to run up a bill revising park rules. But many of them are obsolete and the cost of not fixing them can also be significant. Here are some things frequently overlooked in older park rules.
Condition of Space When Home is Removed. ARS § 33-1485.01 allows a park to get a special deposit if a home is removed by a non-licensed contractor. It allows a park to prevent removal until rent is current. It requires the space to be cleaned up after removal. And it allows parks to sue for damages if anyone fails to comply. But to take advantage of this the rules need to specify the condition the space must be in after removal and need to refer to the deposit requirement.
Dangerous Breeds. Park liability insurance companies will cancel or refuse to renew insurance if the park does not prohibit dangerous breeds of dogs such as pit bulls, etc. The reason is obvious. They can hurt people and expose the landlord to substantial legal liability. I never cease to be amazed when parks want to evict a tenant for having a dangerous breed of pet when the rules dont prohibit them and the dog has been there for a while without objection. A dangerous breeds restriction should be in all park rules.
Trees. AAMHO chapters are at war with many landlords over who is responsible for maintaining trees on tenant spaces. I think the law permits the park to hold tenants responsible for this, though there are good policy reasons for the park to nevertheless do it. Whatever the park's decision on tree maintenance responsibility, it should be spelled out in the rules.
Guests. Guests staying beyond 30 days in a 12 month period can be a problem, especially when the "guest" really is living there and has a serious criminal record. All parks should have rules requiring anyone staying more than 30 days in a 12 month period to apply for and be approved as a permanent resident or vacate.
Home and Space Maintenance. This is really one of the basics. It is surprising how many rules do not contain provisions that management wants enforced. For example, if you don't want outdoor storage, the rules neet to prohibit it. If you want dogs on a leash at all times outside and accompanied by a resident, the rules need to say it. If you want faded or rusted homes to be painted, require it in the rules. I still see eviction referrals for messy, weed infested, trash covered spaces where these subjects are not even mentioned in the rules. The inability to evict a pig becuase no rule is violated by the condition of his space can create a big problem for a park cited by a health inspector for the condition of the space.
Parks can keep the expense of rule revisions to a minimum by taking a close look at what they now have, comparing it with the sample in the MHCA Blue Book, coming up with their own revisions, and as a final step letting the park's lawyer review the end product. It is really money well spent.
May 31, 2010
Memorial Day. This was always an important day to me. My Dad was a career Marine and is now buried in Arlington National Cemetary. For many years I would fly back and visit his grave on Memorial Day. I haven't been able to the last couple of years but hope to resume next year. In addition I am nearing the 50th anniversary of my enlistment in the Navy. Its not that I did anything significant while in the service, but it does give one a sense of the importance of having served, and great respect for those who saw combat and were either wounded or killed. There are youngsters now serving in two extremely harsh combat environments and I honor them, especially on Memorial Day.
May 28, 2010
My Law Practice. I have settled into my new surroundings. Some of you will notice that I now have colleagues covering many of my eviction cases. Mark Zinman covered an immediate eviction for criminal conduct on Wednesday and the manager called me afterwards, very pleased with the outcome. This gets me off the road every morning and afternoon covering court appearances and for the first time in many years I am able to spend time in the office. People can actually reach me by phone. One of the big criticisms of me over the last several years has been how hard I have been to get hold of since I was so often out of the office. That has changed.
In addition, the cost of evictions to clients has been cut in half. I knew it would go down but the amount of decrease has surprised me. In a tough economy, every savings to a landlord is important.
Abandonments continue to come in at the same rate as before. I have a legal assistant who many parks are familiar with from his past life as a reputable dealer--Chris Francis. Chris knows mobile homes. We are taking the abandonment process I have developed over the past two decades and refining it.
In some instances it is being speeded up, for example by personally getting MVD reports instead of doing it by mail. My forms and standardized letters are being converted to computerized forms. And for parks that want it, we will offer a full service option where Chris will actually handle the landlord lien sale and will process the paperwork with the MVD. That will cost more and parks can still do that stuff themselves.
Our goal here is to try and get around 30 days cut out of the time it takes to get titles to abandoned homes or get them otherwise disposed of.
Evictions outside of Maricopa and Pima Counties are a problem. Parks in other Counties report an inability to find lawyers who know MHC's willing to handle evictions at reasonable rates. Our firm will now handle MHC evictions in Prescott, Sedona and nearby Justice Courts, though we will be batching them up to make the trip on a once-a-month cycle. In the near future we hope to expand to the three Counties along the Colorado River.
We are not trying to compete with local attorneys in doing this. Instead we are trying to plug a hole by providing a service where there is none at present.
Finally, for multi-park owners and management firms, we are coming up with some summary reporting of evictions and, later, abandonnments. This will give them usable information in a summary format to show park by park how evictions stand. Comparing this information to delinquency reports and vacancy reports will help in determining how effective management at all levels is at collecting rents and minimizing vacancies.
Website Traffic. I set this website up in June 2007. It took a year for Google to pick it up and traffic on it was slow at the beginning. But over the past couple of years it has increased. It was especially busy when I was digging into the Fire, Building and Life Safety Department's rip-off of the Relocation Fund. As of this morning the site had over 50,700 hits since inception. Given the very limited audience this site has and the fact that it is not very interesting unless you are really into Arizona mobile home parks, that is a pretty good traffic count.
Census. Census workers are now out trying to contact people who didn't complete and return their census forms in the mail. Some parks have reported being contacted by census workers for information, though I haven't heard any reports of unreasonable requests. This morning's Drudge Report has a blurb up about census workers having the power to enter tenant dwellings without consent. That is simply wrong.
There is a federal statute dealing with the powers of census workers and imposing requirements on housing providers. The statute is 13 USC 223, and it requires housing providers to allow census workers onto the property for official purposes. But it does not say they need to allow access into tenant residences. In other words, a manager needs to allow census workers into the park and also should not interfere in their efforts to visit tenant residences to see if the occupants are home.
The manager should also provide names of residents to census workers, and also any other information called for in the basic ten question census form. But the expanded American Community Survey form that a few people are asked to complete calls for more information than a manager ought to be providing. See my March 25, 2010 blog posting below for more information.
Here is a link to the federal statute: http://www.law.cornell.edu/uscode/html/uscode13/usc_sec_13_00000223----000-.html
RV Parks. A new law becomes effective July 29 making significant changes to the RV Parks Long Term Rental Space Act. The first change deals with separate utility charges. Those parks using the ratio billing method for metered utility charges are now limited as to the maximum administrative fee they can charge. The fee can't exceed that actual charge if a third party is handling the billings, and in no event can it exceed 10% of the landlord's total costs for the utility service for that billing period. Disclosures of this must appear in the rental agreement.
The second change is that park model space rental agreements covered by the Act (i.e., those for more than 180 days) cannot be non-renewed without good cause. I think that is an unconstitutional change but if no one challenges it in court the State will get away with it. Since the RV parks industry is so negligent about defending its own property rights, the change will likely not be challenged.
Several RV space rental forms needed to be modified to reflect these changes in the law. I have just finished revising the MHCA Orange (forms) Book and Turquoise (explanation of the law) Book. The revised books should be available from MHCA for purchase shortly. Parks with long term RV space rentals should have these books.
Immigration. I have heard reports from parks with large Hispanic populations that some, maybe many of their residents are being enticed to relocate to New Mexico. In part this is due to fear over SB1070, and in part because there may be people actually recruiting Illegals to move there.
New Mexico has a reputation of being more friendly to Illegals than Arizona. The New Mexico Governor urged our Governor to veto SB1070 and New Mexico does not require proof of citizenship or lawful presence to get a driver's license like Arizona does. On the other hand, Albuquerque is cooperating with ICE in screening people arrested and there are some heated political contests going on in New Mexico in which immigration is a major issue.
But the perception is that New Mexico offers a safe haven for Illegals. The Arizona Republic had a story in this morning's edition in which an Illegal was reported as saying this in discussing her plans to move to New Mexico.
I think much of the fear over SB1070 is exaggerated. On the other hand there is little doubt that other parts of the country are friendlier to Illegals that Arizona is. The net result is that parks with Illegals living there stand to lose residents in the months to come due to competition for them from other States.
May 19, 2010
Utility Charge Furloughs. Its that time again. Snowbirds are coming into park offices asking that their utility charges be stopped while they are away for the summer.
Many utility providers allow single-family customers to have utility service and charges suspended while they are away. If the local utility allows that, so must the park since the single-family rate under those circumstances is zero.
Parks in deciding to separately bill mobile home space tenants for utilities are limited to the single-family residential rate. They should have factored this in when first instituting separate charges since service suspension requests must be honored if the utility company whose rate is being followed allows service suspensions. Parks with a large proportion of winter visitors can face a serious shortfall of revenues if tenants request service suspensions when they are gone.
Please note that the rules MAY be different if an RV space is involved.
Non-Lawyer Evictions. I understand a non-lawyer in Tucson is promoting his company for handling evictions. It is illegal for a non-lawyer to represent a client in any court action including evictions. Any non-lawyer filed eviction will be dismissed and you will need to start over. The only time a non-lawyer can appear in court in a park eviction is if he is a park owner.
Cheap Landlords. I am getting more feedback on AAMHO training. It is cheap--much cheaper than MHCA's, and that is fine. But a park I talked to today said she was told at an AAMHO course to use a 10/20 notice for a health and safety violation in a PARK OWNED HOME. That is wrong. She defended herself saying that the "other" training was too expensive and she would pretty much always go with the cheap training. That's her prerogative. But as a result this tenant got an extrra 15 days to destroy the interior of the rental home.
You get what you pay for.
May 15, 2010
Parham Money. Here are the front and back images of the gold foil wrapped chocolate coins handed out at the MHCA conference yesterday. It's a little disconcerting to be making presentations while the audience is peeling and eating your image. At least I was happy to hear that I tasted good.
May 14, 2010
MHCA Conference. It was a reasonably well attended conference given the economy.
I did a lot of kidding around with my new partners but I should have concluded by telling folks I don't actually work in a basement but instead have a really nice office that Scott and Mark went to a lot of effort to prepare. I was flattered by the "Parham Money" that was passed out. I think I made a really good choice in merging with Scott Williams and Mark Zinman. I hope they will feel the same way in the next year.
MHCA Publications. Changes to the long term RV Rental Space Act are going to necessitate that the Orange and Turquoise Books be rewritten and that will be done before the changes become effective the end of July. RV parks ought to get the new books, especially the Orange Book, when it becomes available. RV long term lease forms are going to need to be revised to reflect the fact that long term rental agreements will no longer be subject to non-renewal without cause. Also, certain changes in the utility charge provisions will be reflected in the re-writes.
AAMHO Training. A couple of park managers at the Conference reported that they had been to an AAMHO manager training program. If they are accurate in what they reported it is really disturbing. AAMHO and MHCA are authorized, under current legal standards to put on manager training qualifying with the State. What was reported is that the AAMHO class is putting out misleading and deceptive information as to park maintenance responsibilities and how they are reflected in park rental agreements. Threats are reported that if parks don't do things the way the AAMHO trainers say they need to be, the parks are going to get sued and forfeit rents.
I certainly hope this is not accurate. If you have been to an AAMHO class the past year or so, please let me know if you have experienced propaganda, not instruction, and give me details.
FBLSD. I have been leaving this Department alone to see what happens under the new management. Unfortunately, the answer seems to be that is is business as usual. I will be going into more detail on this in the weeks ahead. It seems to be a combination of Stockholm Syndrome and a bunker mentality. Not to mention an inability to account for expenditure of funds and sticky fingers when it comes to the Relocation Fund.
Fair Housing Complaints. These seem to be on the increase, at least based on the numbers coming into our office. Hard times bring more and more complaints. Landlords need to be vigilant about complying with fair housing laws and treating residents with respect. That will avoid many, though not all, complaints.
Red Flag Rules. A company specializing in advising housing providers gave a presentation on this at the Conference and got a lot of people's attention. Essentially, the Federal Trade Commission has adopted regulations requiring credit providers as broadly defined in the underlying law, to develop plans for protecting sensitive customer information and keeping vigilent for "red flags" indicating customer information has been misappropriated that may enable identity theft. There are severe sanctions when a credit provider fails to comply with these requirements and a customer's identity gets stolen or compromised.
A lot of this is common sense and we have been preaching it for years. Keep things such as tenancy applications and copies of ID cards separate from general tenant files. Be sure there is nothing in tenancy files showing resident Social Security Numbers, Drivers License Numbers, dates of birth, bank and credit account numbers and the like. This kind of information needs to be kept in a separate location from the tenancy file. Preferably it should be in a different office away from the park. It should be kept in a secure safe or file cabinet, under lock and key, with access restricted solely to people who have a legitimate need for access.
The park should draft a written plan (it need not be elaborate) for identifying instances when sensitive information has been stolen or compromised, and identifying what will be done. Such things as fraud alerts on credit reports obtained by the park; credit information inconsistent with known practices of the customer; ID cards or other documents provided by a resident or applicant that appear altered or forged; application information inconsistent with credit report information (for example different birth dates); notices received that a resident is using someone else's identity or that someone with the person's name was evicted but it wasn't that person, are all "red flags". Those sorts of things should put the credit provider on notice that there is a likelihood of identity theft.
The plan should lay out procedures the provider will follow when these things come to its attention. Examples are steps to verify the identity of people, notifying the customer of a possible breach of security, and asking the customer to vaildate his identity.
The plan should identify protective measures such as steps to physically separate sensitive information from other data, and what steps have been taken to secure that information and restrict access to it.
Landlords are considered credit providers and need to comply with these requirements. It is another government mandate but is necessary. We will probably develop a template of an identity theft prevention program that can form the basis for individual park plans.
Although a pain, it is really necessary. If you doubt it, talk to an identity theft victim and find out what a horrible experience it is to deal with the results of neglect in safeguarding customer information by credit providers.
Self Service Facilities. There is yet another landlord tenant act out there that we probably need to be concerned about. Scott Williams wrote about it in the last MHCA newsletter. Parks that have storage yards and charge separately for the use of space in them are probably going to be covered by the Self Storage Facilities Act that appears starting at ARS 33-1701. Among other things that law creates procedures to deal with property abandoned in these facilities, and what to do when stuff is stored but the fees are not being paid. I am either going to write a new (very short) MHCA manual on this or possibly cover it in the Blue Book. More likely it will be a stand alone manual since both MHC's and RV parks have these facilities. This development largely results from changes in the law that become effective July 29.
May 7, 2010
My Practice. I have been settling into my new surroundings and my new way of doing business. I am being dragged into the 21st century and its really a pretty good thing.
Evictions. Most routine evictions, mainly non payment of rent, will be covered by other attorneys affiliated with the firm. I will still handle the more difficult ones. Doing it this way lets me avoid spending so much of my time on the road and in the 25 courts that hear evictions. I am able to spend more time in the office. The main criticism voiced about me over the years was how hard I was to get hold of. That was mainly due to my busy court schedule. Now I am far more accessible by phone as well as e-mail during the day.
Managers will get copies of all court filings by fax or e-mail the minute they are filed to see what is going on. That is something I was unable to do in the past.
In addition, doing it this way lets us schedule cases for court within a few days of them being referred. In the past it was common to wait a couple of weeks or more to get into court since I had to fit the appearances into my schedule. So cases are finished a lot faster.
I no longer need managers in court for rent evictions. If tenants want to work out payment plans, managers can agree on a schedule and fax me a note and I can write up the agreement and fax or e-mail it back, normally that same day.
Finally writs of restitution can be handled by the firm. I no longer will need to have managers go get their own writs.
Doing it this way really cuts down on legal expense. Eviction costs for my clients are going to radically drop. That should make everyone happy.
Abandonments. These are still being handled in pretty much the same way. But I have plans to offer more services here as time goes by, including an option to have a firm employee process the paperwork with the MVD instead of having the manager do it, if the park wants us to. We are arranging to have direct access to the MVD database so we can do instant MVD title and lienholder checks. This will streamline the process and reduce waiting times for final title work.
Rental Documentation. I am afraid most parks' rental agreements and especially rules and regulations have grown obsolete over the past few years. I haven't had as much time as I wanted to focus on getting them updated. Likewise with the MHCA books. All of them are pretty much up to date but I have some ideas on improving them. The extra time I can now spend in the office will allow me to start concentrating on this.
MHCA Conference. This is coming up next week. I hope parks will be there. The seminars are timely and my new partners will be there. Scott Williams is a familiar face at these affairs, but Mark Zinman, the young blood of the firm will also be there. Attendees are going to find him impressive.
Park Model Tenancies. On May 3, the Governor signed HB 2255 into law. It will be effective July 29, 2010. It makes some technical changes in utility billing rules for RV parks. But the most important change is the elimination of the ability of landlords to non-renew expiring rental agreements on 90 days notice without cause, Long term park model leases are now "perpetual leases" like MHP rental agreements. In order to non-renew the landlord must have "good cause" as defined in the statutes.
The MHCA Orange and Turquoise Books will need to be updated to reflect these changes.
I think the law is unconstitutional and also amounts to a regulatory taking entitling landlords to compensation from the State. But the RV park industry slept through the legislative process and probably won't take action to enforce its rights in court.
This is what happens when industries do not act to protect their interests. RV parks have a trade association of their own but are too cheap to fund it. MHCA has so few RV parks as members that it cannot credibly represent that industry's interests at the legislature (though we did try; we were the only group opposing the bill). It really is a shame.
Here is a link to the Bill: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2r/bills/hb2255s.htm
April 30, 2010
Free Market Capitalism. There is hope for the young generation!!!http://www.youtube.com/watch?v=U4gUFaQG1to
April 29, 2010
State Related Immigration Law. We have all been seeing media reports of the demonstrations and extreme rhetoric resulting from enactment of the new Arizona immigration enforcement law.
Both local and out of state activists are really stirring up the Hispanic community with outrageous exaggerations of how this law will affect dark skinned people. Most of what is being said is simply not true but that is not the point of this.
Some of the most extreme things being said are being said in the schools attended by children living in immigrant heavy neighborhoods. Again the things preached are mostly wrong or exaggerated, but the point seems to be to stir people up to demonstrate against the law and, of course we are seeing daily demonstrations. Some unreported property damage is taking place at some demonstrations.
The problem for us is that the effect of what is being said does not stop with demonstrations. I have been contacted by landlords in immigrant dominated areas advising threats are being made of physical violence if rules are enforced or criminal activity is strongly responded to. In one MHC the tenant activist leaders reportedly told the manager that it was a Mexican community and things were going to be done the way they are in Mexico. This particular group was at least partially stirred up by a middle school teacher.
This suituation has serious potential for violence. Managers need to be especially sensitive and not over react to threats, demands or demonstrations. Do not respond to threats or demands with your own threats or demands. Stay cool and try to let things calm down.
There is nothing these activists would rather do than create violence and blame it on the new law, perhaps invoking federal interference in Arizona affairs. Don't be a part of giving them that kind of victory.
April 28, 2010
Updating My Client Records. Before becoming ill, Betty had been trying to update my client records prior to my relocation.
Now that I have moved, Chris Francis, a Legal Assistant in the new firm is calling parks and management companies. He is trying to get these records updated and in particular to get e-mail addresses for management companies and individual parks.
Please cooperate with Chris if you are contacted. He can also answer questions and provide information on how we will be contacting clients and providing updated information in the future.
ALSO, faxes sent to my old fax number are having problems going through the forwarding process. It would be wise to fax to the new fax number--(480) 946-1211--or to send them to me by e-mail: TrailerParkLawyer@gmail.com
April 24, 2010
My Law Practice. Yesterday I relocated my offices. Although the change will be official on May 1, I am now physically located at the new offices in Scottsfdale. My phone and fax numbers have changed. While calls and faxes will be automatically forwarded until July 31, after that the new numbers must be used to contact me. It would be wise to start using them now. Here is the information.
Address: Michael A. Parham
Williams, Zinman & Parham, P.C.
7701 E. Indian School Rd., Suite J
Scottsdale, AZ 85251
Phone: (480) 994-4732; Fax: (480) 946-1211
You can continue using the same e-mail address. Also, I will continue to maintain this web site as long as I remain in practice, and I expect that will be a very long time indeed.
The phones at the new offices are covered by two knowledgible staff members, Denise and Vanessa. While it will take them a while to get a handle on the details of my caseload, they are very capable and will be helpful in responding to client inquiries.
ALJ Cases--Statutes of Limitation. I attended an ALJ hearing this past week. This was a case filed in Tucson. All cases are now being heard in Phoenix due to budget cutbacks in the Office of Administrative Hearings budget. It's Tucson office was closed. Hopefully this will reduce the high number of frivolous filings by Tucson MHC tenants.
I was happy to see that the Judge started out by advising that only claims going back one year prior to the date of filing the complaint would be considered; claims before that would not be heard. This results from enforcement of the one year statute of limitations and is due to the Superior Court judgment that MHCA obtained against the Fire, Building and Life Safety Department declaring the one year limitation applied, and ordering the Department not to interfere in the application of that limitation in ALJ cases.
April 22, 2010
Assessor's Registration of Parks. A while back I posted an entry about the Maricopa County Assessor charging a fee of $10 PER SPACE to register parks. I wrote that in my view, the law only required a single registration for the entire park and that $10 per space was more than required by the law. I suggested that parks continue to register by paying only a single fee and filing a single registration form.
At least one park had the form returned with a message advising that each space needed to be separately registered. Obviously there was a disagreement between my interpretation of a law I helped draft, and the Assessor's Office.
MHCA arranged a meeting with staff from the Assessor's Office and it took place today. Susan Brenton and I attended. We explained the background and intention of the registration law, and what my intention, at least was when I got it revised to specifically reference MHC's and to address separate requirements when tenants sub-let homes.
We found the staff extremely helpful and anxious to gain whatever insight we could provide. They already have a lot of interaction with MHC's since they not only register parks as residential landlords, but also handle property tax assessments for the land where parks operate, and on individual mobile homes owned by tenants that are taxed as personal property. We are all familiar with individual mobile home tax rolls and of course parks report changes in homes coming in and leaving to that office, and maintain assessors cards on homes in the community.
Anyway, the Assessor's Office is going to re-evaluate its position on how a park is supposed to register. While it is doing so, it will accept single registrations and a single fee from parks covering the entire park.
If you had a single registration returned, re-send it and it will be accepted.
The staff down there is a sharp group of people and really motivated to do the right thing. The law they are working under is complicated and somewhat confusing, something I probably contributed to since I was involved in drafting it.
April 18, 2010
RV Parks Landlord Tenant Act. It looks like the Legislature is going to pass a bill creating a "perpetual lease" for park models, much like we have under the MHP landlord tenant act. That means that in order to non-renew a park model long term rental agreement, a landlord will need "good cause" as defined in the act.
Good cause does not include such things as serious criminal activity off the premises, getting old, obsolescent units out of the park when leases expire, and many other things. So, for example, a park with a tenant convicted of child molestation somewhere off the premises cannot be terminated or non-renewed for that reason under this bill.
This is a good reason not to agree to rental agreements for more than 180 days in the first place.
There are lots of very large RV parks around the State. But by and large they are cheap and unconcerned with protecting their rights at the Legislature. Most do not belong to MHCA. There is a separate trade association for RV parks but it has no money and cannot afford a lobbyist.
At a meeting at the Legislature last week, I participated along with the MHCA president. AAMHO had several people there telling sob stories about how evil RV park landlords are, threatening tenants with non-renewals if they didn't knuckle under to their tyrranical demands. No RV park landlords were there and only a single former RV park manager who now is trying to run their trade association attended.
So the cheapness and inattention of RV park owners is going to enable this terrible law to get enacted.
The law is a serious government taking of private property rights and may very well be unconstitutional since it interferes with vested private concracts. It will be interesting to see if any RV parks sue to get it declared unconstitutional or whether any seek damages against the State under Prop. 207, the Private Property Rights Protection Act.
Here is a link to the proposed amendment. The perpetual lease language is at the end: http://www.azleg.gov/FormatDocument.asp?inDoc=%2Flegtext%2F49leg%2F2r%2Fproposed%2Fs%2E2255bl2%2Edoc%2Ehtm
Other Bills of Interest. Although the focus has been on the budget, the Legislature has been doing other things as well. Here are a couple of bills likely to pass. If any pass and don't get vetoed, they will be effective 90 days after the Legislature adjourns (probably effective around August 15).
SB 1070. This will make "harboring" an illegal alien a crime if the person doing it is "in violation of a criminal offense". I am not sure what the quoted language means. Here is a link to the Bill: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2r/bills/sb1070h.htm It is pretty long. Scroll down to the section amending ARS § 13-2929. The fact sheets prepared by the legislative staff are of no help in figuring this out. It would seem to apply to coyotes bringing Illegals across the border, transporting them in the U.S., and operating drop houses. It would not seem to apply to landlords not engaging in other criminal conduct. Harboring is also a federal offense and means knowingly providing shelter to Illegals or doing so in spite of clear evidence the person receiving shelter is an Illegal. While landlords may suspect a person is an Illegal, that is a far cry from knowing it. In sum I do not think this new law will affect residential landlords at this point.
HB 2643. This makes a number of changes to the Self-Service Storage Facilities Act. This law applies to mini warehouses and other storage facilities renting spaces to people to store stuff. Scott Williams and I have decided that this law probably applies to MHC's charging tenants to store things in their storage areas. The next revision of the MHCA Blue Book is going to contain some forms to use for such rentals and will need to comform to the changes made in this Bill. Here is the Bill: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/49leg/2r/bills/hb2653h.htm
Government just never stops getting into our lives.
April 14, 2010
My Law Practice. Effective May 1, 2010 I will become associated with Scott Williams and Mark Zimnan in their law firm that will become "Williams, Zinman & Parham, P.C."
I have posted an announcement giving some details. Click on the second tab on the left to read it.
On April 23 I will be moving my offices to their facility in Scottsdale. I will still be able to be contacted through the same phone and fax numbers and e-mail address as at the present time. Except for my office being closed on Friday, April 23, nothing will change.Clients can and should continue to fax me things in the same manner as before using the same transmittal forms and procedures as at present. Mail should be addressed to the new address shown in the announcement starting around Monday, April 19.
My bills can still be paid using the return envelope enclosed with the statement.
There will be no changes in my hourly rate but I expect client expenses to go down due to a number of economies this change will result in. Eviction expenses in particular will go down and cases will get filed much more quickly than in the past. In addition, the firm has a clerical staff and there will be phone coverage by personnel familiar with what I do and with case status. Parks reluctant to use me in the past due to cost or time factors may want to rethink that.
Scott Williams has been a supporter of the MHC industry for well over a decade, is knowledgible in MHC law, and has a significant moblie home park client base. We have been discussing a merger for quite a few years and had decided to do it later this year. Betty's untimely disability encouraged us to move our timetable up. Mark Zinman is a younger lawyer, has gained a lot of MHC experience the last several years working with Scott, and will bring youthful energy to the table.
Scott and Mark are extremely high tech and their practice reflects it. Some of you may be aware that I am not exactly high tech, but I am going to become a computer geek.
This factor helps the firm provide high quality service at reasonable rates. It also will enable us to be much more responsive to client requests since case status will be instantly accessible on the firm's system. I think my clients are going to be thrilled with the changes.
This change will enable me to get a little time off once in a while, something I have not been able to do in 15 years. It will also enable me to continue with my practice into the indefinite future. I will continue to focus my efforts towards representing not only individual clients but MHCA, the industry association in its efforts to defend the industry before the Legislature and government agencies, and to provide meaningful training and publications.
Any rumors I am retiring are false. I plan on being around a good long time--as long as my clients want me.
April 10, 2010
RV Parks Landlord Tenant Act. The Legislature is nearing the end of it's current session. In the last few days a bill was introduced that would require "good cause" to non renew an RV space tenancy covered by the Long Term RV Rental Space Act. This would in effect convert those tenancies into perpetual leases like we have had under the MHP Landlord Tenant Act for nearly 25 years.
In my view this is unconstitutional in that it has the State interfering in vested rights under existing private contracts. It also means the State is enacting legislation regulating land use in RV parks. The law would tell landlords who they must let live on their land even after leases expire. This is a "taking" and Arizona has a law allowing landowners victimized by government actions affecting the use of their land to sue the government and recover money representing the diminished value of the land resulting from the action. This is the Private Property Rights Protection Act that was added several years ago by a voter initiative (meaning the Legislature cannot change it).
It's too bad RV parks don't have an effective trade association to protect their interests or that more of them don't belong to MHCA so it can more effectively try to represent their interests in the Legislature.
RV parks should pay attention to this bill because it has the potential to seriously erode the value of their properties and limit their flexibility in operation.
Hard Times for Lawyers. Evictions this year in Arizona are significantly down from last year. Many landlords are letting tenants slide on their rent for months on end in the hope they may eventually be able to pay. That is a very bad idea but it is human nature.
Most ethical lawyers simply cut operating budgets and perhaps take on different kinds of work. But there are always a few that stoop to excreable business and ethical practices in order to maintain their standard of living.
If you encounter a lawyer giving you flowers or candy to get your business and promising to work for very low or specially discounted fees, throw him out of your office. If a lawyer guarantees fast evictions, be skeptical. While evictions should move quickly, there is only one way to guarantee an eviction will be complete in an unreasonably short amount of time and that is by illegally cutting corners.
If a lawyer promises to handle something involving a hearing or an investigation for a low flat fee, resist the urge to grab the bargain. Lawyers are not fools. They are not going to lose money on flat fee cases. Many will simply settle the case on terms unfavorable to the client just to get it over with in a short amount of time so they don't lose money on the case.
Even attorneys who have built up reputations for hard work and ethical behavior in past years may stoop to this kind of behavior due to financial pressures in their lives.
When dealing with lawyers, the "too good to be true rule" applies: If it sounds too good to be true, it is. Another indicator you are dealing with a shyster is his unwarranted behind the back criticism of other lawyers you are familiar with.
With that said, hard times sometimes creates opportunities for savings and good lawyers like other business people will take advantage of them and pass the savings onto their clients. You should be able to recognize the honest lawyer trying to attract or retain your business by streamlining his practice as opposed to the shyster promising things that simply can't be delivered without either breaking the rules or selling your interests out.
I will be announcing some major changes in my law practice including my plans for the next few years in the coming weeks. Among other things these will enable me to pass onto my clients some cost savings and will make me more responsive than I have been in the past.
April 3, 2010
Abandonments. The number of abandonment referrals I am seeing these days is remarkable. Most of my March billing was for work on abandonment cases; I spent almost all day yeaterday working abandonment files; and every day I get several requests to start abandonment proceedings.
Of course this is just a sign of how bad the economy is. Every abandoned mobile home represents an investment made by a tenant that he is walking away from. Homes are very difficult to sell, impossible to move without incurring great expense, and when tenants can't afford to pay rent (and maybe home mortgage payments as well) they are forced by circumstance to abandon their homes.
I have said this many times here but it bears repeating. Abandoned homes are common. When you have a home in your park that looks abandoned and no rent is coming in, take action. I continue to be amazed how many parks wait until there are six months rent or more owed before deciding to treat the home as abandoned. That's crazy. That rent will never be paid and you will still have to go through the abandonment process and lose even more rent before you get the situation resloved.
If there is a lienholder, immediately give it a notice of abandonment. If you don't know whether there is a lien, or if the home is free and clear, refer the case for abandonment. If you use me for that, I will need the make, year, size and VIN number of the home to start the process (a copy of the title is helpful--even an old obsolete title). If a lienholder ignores a notice of abandonment or makes promises but fails to pay rent, also refer it for abandonment.
The main idea is not to sit on the case and hope it will cure itself. That's like waiting for a tooth ache to go away. It almost never does and the longer you wait, the more damage gets done.
Legislature. An amendment is being drafted to a bill as I write this that would amend the Long Term RV Rental Space Act to require "good cause" to terminate or non-renew park model space leases. This would in effect turn long term park model space tenancies into "perpetual leases" like exist under the MHP LTA.
In my view this would amount to a regulatory taking since it stands to reason that by eliminating a landowner's ability to control who lives on his land, the State is taking away something of value from him. If this amendment gets into the bill and gets enacted, the RV Parks industry is going to need to make a decision whether to sue the State under Prop. 107 for major damages for diminishing the value of their properties. Hopefully it won't go anywhere, but this seems to be AAMHO's whole reason for being these days--to get that through the Legislature.
March 30, 2010
FBLSD Lawsuit. I have written about this before. MHCA sued the Department for a declaration that it was wrong in saying the one year statute of limitations does not apply to ALJ complaints. After the Judge ruled in MHCA's favor in February, the Attorney General asked the Judge to reconsider. The Judge denied that request and on March 25, 2010 signed a formal judgment saying the one year statute applies to ALJ complaints. The Judgment also entered an Injunction against the Department forbidding it from interfering with ALJ's in applying the one year statute.
Department of Homeland Security Subpoenas. Today I saw an administrative subpoena issued by a Special Agent of ICE (Immigration and Customs Enforcement) to a landlord requiring it to provide a rent roll with names and unit numbers of residents of all units. ICE is on the front lines of the illegal immigration battle and also gets involved in criminal matters in which immigration is involved. In looking into the subpoena I find that Homeland Security (of which ICE is a part) had broad administrative subpoena authority and that supervisory Special Agents can issue them. If you should receive one, it would be worthwhile running it by your attorney, but if it is reasonable in what it calls for, be prepared to honor it. Don't expect anyone to tell you why it was issued. These investigations are confidential.
March 26, 2010
Betty. Many people have asked how Betty is doing. She is staying at home but gradually getting better. She really appreciates the cards and flowers she has gotten and I appreciate the thoughtfulness as well. She is unable to return to work but she will remain a part of our extended family
March 25, 2010
The Census. Census forms have gone out and the Census Bureau is conducting the count mandated by the Constitution every 10 years. But a lot of people are going to ignore it and the census counters will start going out in May to try to get counts made of households that failed to return the forms. This activity will continue through August.
When they show up in your communities, once you figure out who they are and verify it by looking at their government ID's, let them go about their work. But if they don't have official ID's, throw them out. There are likely to be some con artists pretending to be census takers.
If despite their best efforts, the census takers are unable to contact residents of the community they may come to the management office for information. Managers should cooperate up to a point. Every time information is requested, check the requester's ID. If he is authentic, you can provide information necessary to complete the basic form. The ten questions deal with identity of occupants, ownership of the home, and race and ethnicity. DO NOT GIVE ANY INFORMATION NOT REQUIRED BY THE FORM. Here is a link to a census form: 2010.census.gov/2010census/how/interactive-form.php
There is another form the Census Bureau occasionally wants people to complete. It calls for a lot more data and a lot of people resent being asked for that level of information. This is called the American Community Survey (ACS). Park managers will not have knowledge of the kind of information called for in that form which is quite intrusive and personal. I do not see how a manager could meaningfully assist with that form.
SAFE Act. This law is going to require "loan originators" to be licensed. I wrote about this on December 8, 2009 and suggest that anyone concerned about it read that (click on 2009 blog in the left column). Here is a link to our banking department's web page on this subject. www.azdfi.gov/Licensing/NMLSLO/nmlslo.html I would be surprised if many (or even any) park sales offices are covered by this.
March 23, 2010
Relocation Fund. A client told me today that the FBLSD is not requiring proof of lawful presence in the U.S. as a condition for tenants receiving benefits from the Relocation Fund. ARS § 1-502 was recently revised to require such proof be provided as a condition of receiving State benefits. Here is the statute: www.azleg.gov/FormatDocument.asp Section D requires a sworn statement that the proof provided is authentic. I wrote about this a year ago when this law was enacted. I checked the FBLSD web site to look at the forms and documents required by the Department and there is no mention of this requirement. I certainly hope it is being required as part of the in-house screening process before benefit payments are approved.
I sure wish they would take their stewardship of this fund seriously.
March 20, 2010
Legislation. The current legislative session is considering non-budget related bills. Some that affect MHC's are:
HB 2473. This authorizes buyers to require purchases of used homes for $50,000 or more close through disinterested escrow agents instead of through dealers as is present practice. New homes would be required to close through escrow agents. I think this is a good idea except I would require ALL dealer involved closings to be through escrow agents and would completely remove FBLSD from any oversight role in the regulation of closings. The terms of the bill are still being worked out by the stakeholders (I am not involved) and final terms are up in the air, though it looks like it will pass in some form. Here is a link to the bill: www.azleg.gov/DocumentsForBill.asp
SB 1146. This will tweak the RV Act to clarify tenant rights to sell RV's on site. It basically duplicates MHP landlord tenant law on this subject. It will likely pass. Here is a link: www.azleg.gov/DocumentsForBill.asp
HB 2632. This would make "harboring" illegals a state crime. It is already a federal crime. Generally, harboring is knowingly giving shelter to an illegal or doing so in reckless disregard of facts making it obvious the person is an illegal. This provision is in section 33-2929 of the law being amended. I don't know if this will pass. I don't like it because of the additional burdens it places on landlords. Here is a link: www.azleg.gov/DocumentsForBill.asp
There are other bills that could have some impact but nothing earth shaking. The Legislature remains focused on the budget.
MHCA Conference. The annual conference and trade show will be held at the Desert Willow Conference Center, Phoenix from May 12-14. I will be making presentations as follows:
9:00 am – 10:00 am: Fair Housing Issues – Dealing with Frivolous and Non-Frivolous Complaints and Avoiding Paying for Mistakes
10:30 am – 12:00 pm: Avoiding Evictions in Tough Economic Times – Tenant Workouts
4:00 pm – 5:00 pm: ALJ Cases – Preventing Them, Fighting Them, Appealing Them and Avoiding Expensive Decisions
8:30 am – 9:30 am: New Technology in Parks – Legal Issues
2:00 pm – 3:00 pm: Collections and Repossessing Park Financed Homes: Getting What You are Owed from Both Tenants and Lienholders
3:30 pm – 5:00 pm: You be the Judge
Contact MHCA to register. Though their website is being redesigned it is still not functional for registering on-line so you need to call them. Call (480) 345-4202 or 1(800) 351-3350.
March 19, 2010
Prisoner Databases. A client asked me why I had not posted a link to these data bases. I am not sure how much play they will get but anyone interested in screening applicants through them can go here: Federal: www.bop.gov/iloc2/LocateInmate.jsp Arizona: www.adc.state.az.us/inmate_datasearch/index.aspx
March 14, 2010
Office Staff Problem. Thanks to my clients for bearing with me in dealing with the sudden and unexpected loss of my invaluable assistant of 12 years. This past week was exceptionally busy and while covering that work I had to figure out how my office had been administered and where things were located. The silver lining in this cloud is that I have been forced to review and streamline a number of practices that have evolved over the years.
In any event I will be more back to normal this coming week. I will not be trying to hire a replacement, at least for a while. The job is so specialized and complex that there simply are not people on the market capable of moving into it without extensive one-on-one training that I don't presently have the time to provide.
So I will be winging it on my own for a while. But I do have plans on resolving the situation in the next few weeks, so any difficulties getting my attention should be short lived.
I will be able to return more phone calls now. But since I am in Court so much and not in the office, the fastest way to communicate with me is still by FAX or e-mail.
State Budget Situation. The Legislature passed a revised budget for the current fiscal year that ends June 30, 2010. It put a 1% State sales tax increase referendum on the ballot for a Statewide vote in May. And it created two budgets for the fiscal year that begins July 1, 2010. One assumes the sales tax measure passes. The other is a contingency plan in case it fails. There are big implications in all of this for the MHC industry. Anyone really interested in reading speadsheets full of numbers can go here: www.azleg.gov/jlbc/budgetproposal031210.pdf
FBLSD. This agency had already been cut for the current fiscal year. In the next one it is scheduled for an additional $177,200 cut if the sales tax passes. If the sales tax fails, the Department is scheduled for elimination "of general fund support". More on this below.
Judiciary. Significant cuts are made to the Court system this year and next. In addition, State funding for Superior and Justice Courts is going to be shifted to the Counties. The cuts will be even greater if the sales tax fails. Look for the Courts to try and make part of this up by increasing filing fees, especially for evictions in the Justice Courts.
Attorney General. No additional cuts are scheduled for either this year or next unless the sales tax fails. Then another 5% cut in it's budget next year is scheduled. The AG investigates fair housing complaints under contract with the federal government in Arizona. It has already slashed that unit and further cuts there could jeopardize it's contract with the Feds and result in those complaints being investigated by Federal bureaucrats in San Francisco. We do not want that.
MVD. There is a projected revenue increase of $12 Million resulting from "increased abandoned vehicle fees". I don't know what this means or whether it will translate into MHC's needing to pay the MVD when they apply for landlord lien sale or bonded titles on abandoned homes. Overall ADOT budget cuts are very small (MVD is part of ADOT).
All Agencies. 5% payroll cuts are required. This could translate to personnel reductions, reduced office hours, closure of more branch offices and the like at agencies MHC's do business with, notably the MVD.
Relocation Fund. This fund again was not scheduled for a fund sweep. Of course it was unofficially swept in the past by the FBLSD. Has it now gotten lucky or are there other plans to deplete it?
FBLSD. I have written repeatedly about the mis-use of Relocation Fund money by this agency. While the agency has new management and has made some worthwhile personnel changes, it has been silent insofar as the outside world is involved. As far as I am concerned the new management does not represent a significant break with the past. Until proven otherwise I simply do not trust this agency.
That viewpoint colors the following comments.
If the sales tax does not pass, the contingency plan eliminates "general fund support". Contrary to newspaper reports and rumors, it does not close the agency. As far as I can see, there are three possibilities resulting from the elimination of "general fund support".
Closure. That is the most obvious one. In that event, important functions would have to be transferred to other agencies (apparently without any money to perform them). Those not transferred would need to be eliminated. Elimination in many cases would require legislation. I have written previously about some functions being necessary and others being worthless.
If closure is the option, contingency plans should be drawn up for accomplishing this. The staff at the Department is responsible for a number of functions that affect the industry and effective contingency plans would require industry input. I am concerned the people there may have devloped a bunker mentality and may try to plan whatever it is they will do without any outside input. That would be a huge mistake and would trigger legislative battles when their plans are presented for necessary enabling legislation.
Continued Operation Without General Fund Support. I have written previously that the recent budgets have provided for spending $1.3 Million each year from the Relocation Fund on general Department expenses. And we know how that money was getting squandered from last year's audit report. Is it that far a reach to anticipate the Department will try to fund its entire operations by raiding the Fund for even more money in future years? I certainly hope that is not the paln.
Scaled Back Operation Without General Fund Support. This is a combination of the two. Here fluff would be cut and essential operations at a much reduced budget would continue. The problem is that the contingency plan eliminated all General Fund support. So would the scaled back operation be funded by the Relocation Fund, perhaps in combination with new and increased user fees?
Possible future use of Relocation Fund money to underwrite Department operations going forward could explain why the Fund has been exempt from being swept like other funds the past several years.
I sound paranoid here. But given past performance by this agency my paranoia is justified. I simply do not trust it. As long as it has other people's money under it's control it needs to be closely watched.
March 9, 2010
Office Staff Problem. I am able to handle my normal workload despite losing my secretary. But the phone is going to be my area of deficiency for awhile. It is impossible to get a temp or anyone else who can step into this job and accomplish anything. But there is no need for concern over getting work done.
FBLSD. This morning's Republic mentioned in an article on the ongoing state budget negotiations, that the Department is slated for elimination in a contingency budget being planned if the 1% sales tax doesn't pass. This is more of interest in indicating the legislature's mindset than anything else at this point.
March 8, 2010
Office Staff Problem. My secretary of more than a decade has become medically incapacitated and probably will not be returning. For the time being I have no administrative help. I will be able to cover my normal workload but will not be responsive by phone except in emergencies. Please direct questions and communications by FAX or e-mail.
March 5, 2010
County Assessor Reports and Registrations. On January 20 and 21 the Maricopa County Assessor sent notices to parks concerning certain reporting and registration requirements. The laws requiring these things have been on the books for more than 10 years but apparently there is a compliance problem.
Mobile Home Register and Monthly Reports. The law requires anyone allowing another’s mobile home on his land to make a record of all such homes there on a County form and to send it to the County Assessor. For any month in which a home comes into or leaves the property a report must be sent to the Assessor. The reports give ownership information and data on the homes. This is used by the Assessor to value tenant homes and send them their annual tax bills. Knowing violation of these requirements is a misdemeanor. If you need information or forms, you should call the Assessor. In Maricopa County the number is (602) 506-3291.
Residential Rental Property Registration. All residential landlords must register rental properties with their County Assessor. Maricopa County started charging a $10 per registration fee last month. A County form must be used for the registration. Unfortunately people at the Maricopa County Assessor’s Office have been telling some parks they need to separately register each space, which of course would generate a lot more money for the cash-strapped County.
But in my view that is wrong. The requirement applies to a “residential rental property”. The relevant statute, ARS § 33-1901 defines that term as follows:
2. "Residential rental property" means property that is used solely as leased or rented property for residential purposes. If the property is a space rental mobile home park, residential rental property includes the rental space that is leased or rented by the owner of that rental space but does not include the mobile home or recreational vehicle that serves as the actual dwelling if the dwelling is owned and occupied by the tenant of the rental space and not by the owner of the rental space.
The underlined language in the definition makes it clear the law requires registration of the park as a whole (the property), not of its individual spaces. The language that follows is designed to make it clear that if a tenant subleases his space and rents his home, the individual tenant must also register his home with the Assessor.
So register the park, not each space. It would be impossible to register spaces anyway since they are typically not platted and do not have individual assessor numbers. But that’s irrelevant since it is not required, in my view by this law. To get the form contact your assessor.
March 2, 2010
Reasonable Accommodations. Since my last two management training sessions I have been getting a lot of questions regarding resident requests for reasonable accommodations to deal with their asserted disabilities. In my training I have gone over the criteria for dealing with these. I have also mentioned the Joint Memorandum of HUD and the U.S. Justice Department that lays out this criteria in some detail.
The Joint Memorandum is the best and most concise and easy to understand statement covering this difficult area of the law that I have seen. Here is a link to it: www.justice.gov/crt/housing/jointstatement_ra.php
Every rental office should print this out and keep it on hand AFTER READING IT to consult whenever these kinds of requests are received.
MHCA Website. The new design is now up but the content is still pretty dated. I am glad to see MHCA is making progress.
February 27, 2010.
Glendale Training Class. I conducted this yesterday and once again the class was engaged and full of excellent questions. I am really gratified by the quality of new managers I am seeing in the industry. If we can hang onto them it makes the future look pretty bright.
My next scheduled class is in Yuma in August. That is all I am scheduled for in 2010. But we are developing an advanced management class which I hope to try out later this year. And of course I will be at the MHCA Conference in May.
Legislative Session. Like last year, not much is going on other than budget issues.
A couple of bills have been introduced tweaking the long term RV rental space act, and one requiring MHC landlords to use licensed contractors when doing major work in parks. This one irritates me. Contractors are hungry for work in this lousy economy and the Registrar of Contractors is trying to get new laws enacted forcing our industry to use contractors, even when it really is not necessary. Sometimes cozy relationships evolve between regulated industries and their regulators and this is one.
But in the greater scheme of things none of these bills is a big deal. If they get through we will live with them.
One other bill of interest would require some, perhaps all manufactured home sales to close through licensed escrow agents. Single family home sales typically close through escrow agents and have for years. Using escrow agents (which are licensed and regulated by the banking department) would give parties to sales added protections by ensiring the buyer's funds are safeguarded until the transaction closes. Escrow agents must show financial stability and be adequately bonded to be licensed.
Under current practice, dealers handle escrows. While this normally works out okay, there can be problems. First they are regulated by the FBLSD which is untrustworthy (though it's trust and escrow audit personnel are excellent). The audit function is inadequately staffed and funded, and the department is on it's death bed. Putting closings into escrow agencies regulated by the banking department (actually the Department of Financial Institutions) would give parties to sales, especially buyers, added protections.
The terms of the bill are being negotiated by affected organizations. If they get the language right, I think it would be a worthwhile change.
Park Model Alternatives. I have written about these before. Some manufacturers are marketing units larger than 400 square feet as park models even though technically they are not. Since they are bigger than 400 feet they qualify as manufactured homes and, I understand even have HUD decals attached indicating compliance with the HUD code.
As units larger than 400 feet with HUD decals, these things qualify as "mobile homes" under the mobile home parks landlord tenant act. An RV park limiting itself to RV's and park models that accepts these units is actually bringing "moblie homes" into the community. Once there are four of them there, it becomes a "mobile home park" as defined by the act.
That sets off a chain of dominoes. When the mobile home parks act applies, tenants must have rental agreement and statements of policy meeting the requirements of the act; rent increase and relocation fund provisions of the act apply to those residents; they have the right to file ALJ complaints against their landlords; and most importantly they lose the ability to non-renew expiring tenancies without "good cause", meaning they now have perpetual tenancies.
Many RV parks exclude mobile homes to avoid being covered by the mobile home parks landlord tenant act. Allowing these larger than 400 feet variations of park models into their communities could turn them into mobile home parks without them even being aware of it.
Moreover, if their local zoning prohibits mobile homes in RV parks, letting these units in could put them in violation of zoning restrictions.
So be careful of the wolf in sheep's clothing. If a park model looks bigger than 400 square feet, check it for a HUD decal. If it has one, be aware that this thing may very well be a mobile home despite what the manufacturer calls it.
And don't trust the title. If the MVD is titling them as park models ("PT"), that doesn't change the fact they are mobile homes for landlord tenant and perhaps zoning law purposes.
February 21, 2010
Eviction & Abandonment Trends. I just closed my books on 2009 and was surprised to see no material change in the rate of evictions and abandonments referred to my office as compared to 2008. I thought there would be a sharp increase but referrals dropped off in mid November through the end of the year, though they have since picked up again.
My sense is that things are getting worse in the economy in Arizona with more people leaving the State and unemployment being a real problem for those who remain. Cases coming into my office for non-payment of rent are typically much further behind than in the past. Parks are obviously trying to work with residents experiencing financial problems. I still think in most cases it is best to get them on a 7 day notice and if necessary in Court before they get so far in the hole they can't dig out. But I can understand the reluctance by managers to do so.
State Trends. Along these same lines I received a listing of eviction and civil lawsuit filings in Arizona Justice Courts the other day which compares them County by County for the last five fiscal years. The results are interesting.
Each fiscal year ends June 30 of that year. So, for example, FY2009 ended June 30, 2009. Here are some figures:
Maricopa County: Numbers of cases filed.
Evictions: FY2007: 81,995; FY2008: 80,765; FY2009: 73,497
Civil Suits: FY2007: 64,717; FY2008: 85,998; FY2009: 101,442
Pima County: Numbers of cases filed.
Evictions: FY2007: 17,018; FY2008: 16,793; FY2009: 15,438
Civil Suits: FY2007: 16,215; FY2008: 19,073; FY2009: 22,023
So what do these numbers mean? First, I discussed them with attorneys in Andy Hull's and Scott Clark's offices (they handle a huge percentage of these evictions) and they don't think their filings were down all that much. So it could be that small owners who do their own evictions are deferring them more than management companies using lawyers. It could also mean that landlords are willing to put up with more delinquencies than in the past as long as tenants are making some effort to pay. It may also mean vacancies created in the past are not being filled, vacancy rates are increasing, and thus there are fewer people in financial stress renting units. Probably it's a combination of these things.
But, the rate of civil filings is way up. These are typically suits for collection of consumer debts where the amount owed is less that $10,000. So it is clear that the rate of people falling behind on what they owe is increasing, yet rent delinquency filings are decreasing. The bottom line is that it seems like landlords are just living with more rent delinquencies than before in the hope people will somehow eventually pay.
Most times, that hope is sadly misplaced.
Incidentally, less than 2% of these filings involve MHC's and RV Parks. Almost all of them involve apartments. MHC's and RV Parks are far more stable since tenants own their own homes and have a lot more incentive to keep rent current to avoid being forced to abandon their homes.
Advanced Management Seminar. Some time ago I posted an entry that I was developing an advanced management seminar for managers who have endured my basic seminar many times over the years. I invited input and heard from exactly one person. Thank you Kirk! I am now finalizing the outline.
I hope to offer this a couple of times a year beginning later this year.
Glendale Training Class. This coming Friday I will be conducting a manager training class in Glendale. It is the last class I am scheduled to conduct in Maricopa County this year. If you will need the six hour training class this year and want to attend mine, contact MHCA at (480) 345-4204 or (800) 351-3350. Do not pay any attention to what they have posted on their out of date website. My last class of the year will be in August in Yuma (though I may do an advanced class sometime in late 2009).
February 17, 2010
New Articles Posted. I just posted four new articles on the MHC Articles page. They are the first four.
Litigation. The FBLSD has filed a request for the Superior Court to set aside it's ruling in favor of MHCA on the one year statute of limitations. So it's recreational litigation goes on under the new Director. The more things change the more they stay the same. We will see how the Court reacts to this but MHCA will probably now seek to get a money judgment against the Department for its costs and legal fees.
February 15, 2009
Park Manager Murdered. A Phoenix area park manager who I had gotten to know quite well disappeared several weeks ago. His body was recently found in the desert. It doesn't look like his death was related to his park activities, and I am not posting his name or that of the park out of concerns for privacy. But his death makes me think about how many people managers come into contact with over difficult issues that to a tenant or resident affect his ability to provide shelter for his family.
Last week I evicted a tenant for beating his mother to death in their mobile home. He had a history of irrational behavior in the park.
All park managers have dealt with residents who react irrationally or even violently to their efforts to enforce rules and collect rents. It is important to always keep in mind that you are not sure of the stability of people you are dealing with. You do not know what is going on in their lives or how they may react or over-react to what you are trying to do. Always keep calm. Do not rise to the bait of a confrontational resident. Do not counter threats with threats.
If you are threatened and it seems to be serious, call the police. If you are physically attacked, defend yourself but don't become the aggressor; when the attacker backs off, do not go after him. Try to get him cooled off and away from you. Then call the police.
Be aware of what is going on. Stay safe.
February 13, 2010
Litigation. The FBLSD and AAMHO have been stirring up significant amounts of litigation recently. We have reached closure on some of it the last few days.
Statute of Limitations Suit. The former Director of the FBLSD inserted himself into a private landlord tenant case after an ALJ ruled the tenant's claim was barred by the one year statute of limitations. He did so without anyone requesting him to review the ALJ decision. He was wrong on the statute of limitations issue and was acting without authority in interceding in a private dispute without any of the parties asking him to. The landlord in that case appealed. That appeal is still pending.
Meanwhile, since his declaration that the one year limitations period did not apply was so broad as to apply to all cases filed with the Department for hearing by an ALJ, MHCA had me file a 60 day notice of claim explaining why he was wrong. This notice was completely ignored so MHCA had me file suit seeking a declaration that the Director was wrong, and an injunction prohibiting him from similar action in future cases. This case was ruled on last week and MHCA prevailed. A copy of the Court ruling can be seen here: www.courtminutes.maricopa.gov/docs/Civil/022010/m4086640.pdf I don't think for a minute that the former Director decided to do this on his own initiative. The person who talked him into it cost the landlord, MHCA and the Department a lot of money for legal expense.
Yuma Park Suit. After a visit to a Yuma area park by an official of the FBLSD, and after AAMHO rejected an overture from me to try and settle the matter, several tenants sued their landlord in Yuma County Superior Court over a number of lease disputes. Last week I heard a rumor the case had settled. From what I can determine that is correct, but the terms can't be discussed due to a confidentiality agreement. This is not at all unusual. So my point here is that if you hear any rumors as to terms of settlement or claims of great victories, they are going to be bogus since anyone with actual knowledge would be prohibited from discussing the terms by the confidentiality agreement. I was not involved in the litigation and I have no knowledge of any settlement terms.
Mission View Case. A former AAMHO Director engineered a lawsuit by a number of tenants of Mission View in Tucson against their landlord. They sought to be exempt from maintenance charges that were part of their rent due to idiosyncracies in the rental documents covering their tenancies. The park is on Indian reservation land and the structure of the original 25 year old rental documents was really strange.
The suit was filed in Pima County Superior Court and some of the tenants recovered a judgment against the landlord for amounts they previously paid as maintenance charges. Other tenants had their case thrown out because they had signed different forms of rental documents. The Tucson newspapers reported on the case, typically being sympathetic to the tenants and treating the landlord as the villian.
The landlord appealed and I appeared in the appeal to assist Jim Frisch, the Tucson attorney handling the case who did a really good job. Yesterday the Court of Appeals released it's decision in favor of the landlord and reversing the trial court. Here is a copy of the decision: www.apltwo.ct.state.az.us/Decisions/cv20090104mem.pdf
The legal expenses in this case are significant and will unavoidably result in higher rents for all tenants. It is a real shame to create such expense for no real purpose.
Perhaps the most significant element in the decision is footnote 3 stating that State courts have authority to hear civil lawsuits between non-Indians involving MHC's on tribal lands. This is different from ALJ cases coming out of parks on tribal lands. State regulatory agencies like the FBLSD do not have authority to regulate affairs on tribal lands. ALJ cases involve hearings incident to the exercise of agency regulatory authority and are very different from private lawsuits between non-Indians. So non-Indians can sue one another in State court but cannot file ALJ complaints against one another involving parks on tribal lands.
FBLSD. It looks like the new director is taking quick charge of the Department. Management changes are now reflected on its website, though more work is needed since if you click on staff pictures, in some cases you get the old job titles. From what I hear more changes are on the way and the era of featherbedding and cronyism is at an end.
Eviction Forms. The Courts used to publish forms to use in filing evictions on the Superior Court website. Now they are trying to get people to file evictions on line for an added fee of $14 per case. An outfit named Turbocourt has the contract to handle e-filing. Although e-filing is not mandatory, the forms that were available on the Court website that I have listed links to on my links page, have been taken down in an attempt to force filers to use Turbocourt. Of course landlords using attorneys don't need to worry about this. That includes most since only an owner can represent a park in an eviction.
The Turbocourt filing process is time consuming and frustrating. Moreover it is inaccurate when it comes to MHC evictions. It says you cannot e-file when the eviction involves a mobile home. That is wrong. The procedures CAN be used to evict from a park owned mobile home. They cannot be used at present when an eviction involves a mobile home space. They also can't be used for an RV space. I see so much ignorance on the part of lawyers and court personnel that I really get frustrated. They don't understand how MHC's work and don't bother to learn.
February 11, 2010
FBLSD. Bob Barger has been reassigned to become the State Fire Marshall replacing Phil Mele who is retiring, according to the Capitol Times. The State Fire Marshall reports to the FBLSD Director. Replacing Bob is Gene Palma, most recently head of the Weights and Measures Department. I don't know him although he is a lawyer licensed in Arizona. Here is a link to the Capitol Times article. azcapitoltimes.com/blog/2010/02/11/brewer-names-tyne-to-head-up-weights-and-measures/
I don't know the new Director even though he is a lawyer. Apparently he has had a close working relationship with the Governor during her tenure as Secretary of State. Hopefully this will give this agency some visibility in the Governor's Office.
February 10, 2010
Government versus Taxpayers. Many elements of state and local governments are trying to raise taxes now. That's insane in a high unemployment bad economy. But governments are looking at a choice of laying off employees or raising taxes with which to pay them. It is evolving into a war between government and the citizenry, and government has the weapons.
Visualize a movie set in the Dark Ages where the King is running low on money. In order to support his lifestyle or perhaps wage a frivolous war, he sends troops out to take food and gold from the peasants. The soldiers have the swords, the horses, the armor and training to use them. If the peasants resist they will be punished or killed.
Not much has changed since the King's tax collectors did this sort of thing. In old England, a reaction to it was the appearance of Robin Hood. Contrary to popular myth, Robin Hood did not take from the rich and give to the poor. He took from the GOVERNMENT and returned it to the peasants from whom it was originally taken. If you think about it, everyone Robin Hood accosted was a nobleman or Church official, the Church being part of the government back then. Of course they also were the rich, taking everything the peasants had with their tax collectors.
These days the City of Phoenix has imposed a 2% food tax. Recently it greatly increased water and sewer charges. These government extractions were publicly announced as intended to save City jobs. School boards across the state are placing budget overrides on the ballot seeking more money to save jobs. In some cases these proposals were rejected in the last election but are back on the ballot again.
The legislature has placed a "temporary" 1% sales tax on the ballot that will be voted on in the next couple of months. This is largely designed to avoid any more state layoffs and "preserve essential programs". The so called federal "stimulous" money that came to Arizona largely went to government including schools, to save government jobs.
All of this tax money and more is being used to save government jobs no matter how unnecessary the government programs employing these people are. The fact is, however that government grew way too much when times were good. Now that times are rotten, non-essential programs need to be eliminated and the people employed in them let go. That may seem harsh but the alternative is that these taxes on the citizenry and on business will prevent a recovery in the private sector and employment and tax revenues will continue to decline meaning government will need to continue increasing taxes to protect their own jobs.
We need Robin Hood back.
Crime Free Programs. Despite raising taxes, however, some programs are being cut. So in the case of the City of Phoenix, what does it cut? Well, among other things on the chopping block is the Crime Free Multi-Housing Program. This is one of the few government programs that actually has valuable benefits to both business, citizens and the Police. Unless something changes, however, it will be completely eliminated by the City. But according to this morning's paper the 2% food tax is going to enable the City to keep some seniors centers, recreational centers and after hours school programs going.
These may be nice things but providing them is not a core function of government. Crime prevention is.
February 6, 2010
Super Bowl. I attended the very first NFL game played by the Saints in the old Sugar Bowl Stadium in New Orleans in 1967. Junior Gilliam ran the opening kickoff back 99 yards for a Saints' touchdown but the Rams wound up winning the game. 43 years later the Saints are in their first Super Bowl. New Orleans has had its share of bad times and I hope this game will change that. As they say in New Orleans, "Laissez les bons temps rouler".
Problems With Utility Companies. Last November I posted a piece about Qwest trying to dupe parks into paying for trenching and excavation work needed for it to do telephone line maintenance and replacement work. APS, Southwest Gas and probably other utilities are also trying to get parks to pony up money for this kind of work. Everyone is having financial problems and trying to pinch pennies.
Qwest sent out a letter to parks in November that was misleading in the extreme, implying that Arizona Corporation Commission rules required parks to pay for this sort of work. That simply is not true--the Commission has no authority over private landlords. The legal responsibilities towards Qwest are spelled out in agreements and easements the landlord or its predecessor entered into with Qwest or its predecessor. Also the MHP landlord tenant act does not require parks to make telephone service available to tenants so if Qwest threatens to cut service off, consider calling its bluff. There are alternatives to hard wire phone service available to tenants and Qwest would also be cutting itself off from being able to sell internet and television service to your residents.
APS, Southwest Gas and other utilities are a bit different. I am not aware of any deceptive efforts to induce parks to pay their expenses. But there can be legitimate disagreements over who is responsible for what, and what the obligations for clean-up and restoration of work areas are. If there is a problem here, the first thing to do is closely examine the easement giving the utility company the right to operate it's lines in the park. If you don't have it ask the company for a copy or get it from a title company or from the title insurance documents you got when you first acquired the park.
The MHP act does require parks to make water, sewer, gas and electricity service available so you can't just tell these utilities to drop dead like you can tell Qwest. You need to get the details of having the work done ironed out by negotiating with them, and in my experience you will generally find them to be fairly reasonable.
Bluestaking is a potential area of expense. Our relatively new bluestaking laws are quite complex. Generally, each utility company is supposed to bluestake the lines it operates. In the case of master metered parks the park would need to bluestake the lines from the master meters throughout the premises. In non master metered parks the utility company would generally bluestake up to the tenant's meter. Parks providing their own sewer and water service would bluestake all of those lines.
A big question involves bluestaking lines in non master metered parks from the individual space utility company provided meters to the tenant's home. Most times those lines are installed by the tenant placing the home on the space. Under ARS § 40-360.22 (P) it is uncertain whether the tenant, utility or landlord is responsible for bluestaking them. This responsibility needs to be negotiated with the affected utility companies. However, when the park supplies the sewer service and owns the system in the community, bluestaking the lateral lines up to the tenant's home is pretty clearly the park's responsibility.
Bluestaking is critical for safety reasons, especially if a utility company doing line replacement work wants to do so by boring rather than open trenching. Boring is much cheaper and less disruptive to the property, but is also potentially far more dangerous. Electric or gas lines can be bored through underground sewer lines and no one will know it--for a while. Eventually a sewer line blockage will result and a sewer line roto rooter device will be run through the line to clear the blockage. When that device encounters the gas or electric line that was bored through, disaster can result. Accurate bluestaking will avoid this.
Relocation Fund. I ran into a top AAMHO official the other day and asked why they were not objecting to the FBLSD's improper use of Relocation Fund money for general operating expenses. I pointed out they had authority this year to use $1.3 Million which was absurd. His response was that having the authority does not mean the money will be actually used and that AAMHO will be closely watching actual expenditures this year. I hope they do since closure of two large parks in rapid succession could completely wipe the fund out
I will be watching and will be serving a Freedom of Information Act request on the FBLSD and the Treasurer for detailed expenditures when the year ends July 31. I already know where it went last year.
January 31, 2010
Manager Training. I conducted a manager training class in Tucson last Friday. It was the most engaged audience I have encountered in many years. They wore me out. It was really gratifying to see the level of interest in the subjects covered. Abandonments are a big issue in the industry right now and there was an awful lot of interest in that.
I was especially happy to see all of the new, young, really sharp park and property managers in the audience. The industry needs new blood and there seems to be plenty of that in Southern Arizona.
I have a Phoenix area class coming up February 26. That is the only Phoenix area class I am scheduled for in 2010 at present. If you are a manager in need of my basic class this year, be aware that my only other one scheduled after February is in Yuma in August.
Using Current Versions of Publications. A manager asked me why his Purple Book said if lienholders refuse to pay or give lien releases after being contacted, the only recourse was to sue them. He was told by a contract inspector that he could still do a landlord lien sale.
The reason is that he was using an obsolete Purple Book. At the time that version was published, suing was the only recourse. But then the MVD policies changed. Those changes were reflected in the new (and current) version of the Purple Book. So he bought a new one.
This is why the MHCA publications are periodically revised and new editions published. Things change. Old versions should periodically be replaced when new versions come out. MHCA deeply discounts the price for many publications for its members if the cover of the version being replaced is provided. Call MHCA for details and for the current revision dates of the publications. Do not rely on it's website or on-line order form. Both are completely out of date.
January 28, 2010
Yuma MHC Lawsuit. There is a lawsuit in Yuma County between tenants and a park landlord involving whether the landlord can raise rents the tenants say were guaranteed at low levels for several years. The disagreement arose in part from some poorly drafted lease forms used by a prior owner of the park.
When the dispute first arose I tried to get the state AAMHO organization which was involved in advising tenants to meet with the park owner and try to get the matter resolved. That request was refused. Instead AAMHO used this case as a fund raising tool, got a lawyer involved to represent tenants at no small expense, and used the case to raise money for itself. You can see how they used it on their website here: www.aamho.org/aamho_news.php
This lawsuit was probably unnecessary but suited someone's agenda.
Anyway a rumor is going around that the lawsuit has been decided and the tenants prevailed. That is simply not true. Though I am not involved in it I have kept track. it is going through a lengthy pre-trial set of procedures involving motions and conferences. And it has become pretty complicated since the former owner of the park has been made a party.
No matter how it turns out I will post the outcome when it happens. But that is probably not going to be any time soon.
January 27, 2010
Homes on Indian Reservations. There are a number of parks located on Indian Reservations around the State. Most, in fact practically all residents in those parks are not Indians. Most of the parks are age 55 communities.
I have just learned that a former AAMHO officer has apparently been giving out information that the owners of those homes do not need to pay personal property taxes on the homes to the County since the homes are located on the Reservation.
The legal situation concerning the status of non-Indians living on tribal lands is very complicated. Suffice to say that they are treated much differently by the law than are members of the Tribe.
Moblie homes owned by non-Indians on Indian Reservations ARE subject to personal property taxes due the County in spite of them being located on tribal land. If the taxes are not paid, the County will not send the Sheriff in to seize the home as a general rule (though actually they could with permission of the Tribe). But the unpaid taxes will become a lien against the home in favor of the County. They will accrue interest at a very high rate along with penalties. This lien is noted on MVD records and the home's title cannot be transferred when the home is sold or inherited until the taxes, interest and penalties are paid in full. Over time the interest and penalties can triple the amount due as taxes and could exceed the value of the home.
These taxes include assessments for the Relocation Fund. If a homeowner does not pay, his eligibility for assistance from the fund could be jeopardized.
Not paying these taxes is a very foolish and self destructive thing to do.
January 23, 2009
Rains and Run-Off. Arizona has had one of it's rare intense soaking rains this week. The ground is saturated and more rain simply runs off since it cannot be absorbed by the ground. This can create a universe of problems in MHC's.
These communities are built mostly on hard desert ground meaning there is not much absorbtion of rain even in ideal circumstances. Add to this the fact that lots are small and homes are close to one another. This means there is even less ground available to absorb the rain than in other kinds of communities.
Virtually all homes are set up over dug out depressions in the ground, in effect being placed over bowls. Water will always seek the lowest level to run into. If it can get to the excavated areas under homes it will run into them. This will create a huge set of problems in the home as it sinks into the wet and softened ground, throwing everything out of alignment.
It is important for preservation of home values that water not be allowed to run under mobile homes in parks. Both tenants and landlords have some responsibilities.
Landlords. Landlords are required by ARS § 33-1434 (A) to maintain the park common areas and spaces other than spaces rented to tenants owning their own homes. Parks when first built should have drainage plans approved by local code enforcement agencies. These plans will typically have water retention basins, dry wells, and a grading plan designed to ensure the flow of excess rainwater into these areas without being diverted onto tenant spaces.
Parks should periodically ensure that their drainage plans are not disrupted by subsequent events such as improper installation of homes diverting water onto other tenant spaces; tree growth pushing up areas of the ground diverting water from drainage pathways; construction of improvements including concrete patios and driveways in such a way as to divert water; clogged dry wells; diversion of water by neighboring landowners into the park; etc.
Right now would be an excellent opportunity for parks to inspect their properties to determine if the drainage plan worked properly. Take a close look at all areas to ensure water has not gone where it should not go. Take photos of any problem areas and take corrective action where warranted.
Tenants. Tenants also have responsibilities in this area under ARS § 33-1451 (A). Tenants often disregard this statute when they suffer damage to their homes, focusing instead on the landlord responsibilities. But the law requires them to maintain their spaces in at least as good a condition as when they first rented them.
If a tenant is experiencing water problems for the first time after many problem free years in the park, it's pretty clear that something has changed to cause the problem. The question may become whether the landlord or tenant is responsible for the change. Tenants should take a close look at their rental space. Has tree growth pushed up the ground on the space and diverted water flow towards their home? Was the home properly installed to begin with? The grade should slope away from the home on all sides. Has the home settled over the years so that water is now running towards the home?
Is the skirting properly installed? Are the skirting vents sufficiently above ground level so that water cannot run in through them? Has concrete been poured in such a way on the space as to divert water flow towards the home? Has vegetation been planted near the home in a way to divert water flow towards the home? These conditions on the space are the tenant's responsibility.
Third parties. Sometimes a third party is responsible for the problem. A neighboring landowner may divert water into the park. Maybe another tenant installed his home in such a way as to divert water onto a neighbor's space. Generally it is up to the landlord to promptly correct this kind of problem.
Dealing With Problems. After the rains, tenants are going to start noticing problems. They should immediately report the problem to the landlord. But don't assume it is the landlord's responsibility. Take a hard look at your space and try to figure out what the cause of the water run-off is. Typically water will be getting under the home. You need to figure out where it is getting in and then why.
Landlords should promptly respond to the complaint by inspectiing the underside of the home and trying to figure out how and where the water is getting in.
If it is a landlord responsibility, fix it! Water problems do not go away on their own. There may be different ways of fixing it and it is not always necessary to do the most expensive fix.
Likewise for tenants. If the problem is your responsibility, do not expect the landlord to make repairs to your home. Most landlords will offer a helping hand to remedy tenant caused drainage problems but they are not charities or banks. Money spent on these things ultimately result in rent increases meaning your neighbors will be footing the bill. Landlords have a responsibility to ensure money is prudently spent and rent increases are minimized.
Here is an article I wrote on this last year: www.michaelparhamlaw.citymax.com/page/page/4695892.htm#a7
"Open Titles". I often obtain title reports on mobile homes, normally after they are abandoned. In many, perhaps a majority of cases involving older homes, I find the title is in the name of someone other than the tenant.
Sometimes this is an open title situation. The tenant bought the home and got a properly signed-over title, but never transferred it with the MVD. The law requires it be transferred but buyers sometimes think they are saving money by not doing so. This is a supremely stupid thing to to. As long as that title stays in the seller's name, he can get a duplicate title and re-sell the home. If he is sued, fails to pay child support, or doesn't pay his taxes, the government can file a lien with the MVD that will go against the home that is still in the seller's name. These situations can be hard for the buyer to straighten out, maybe impossible.
Sometimes the title is not in the tenant's name because he is only renting the home from the owner. A park that prohibits subleasing might be told the tenant has bought the home in order to approve the tenancy.
Buyers of homes should always get the title into their names for their own protection. And parks would be well advised to require a copy of the front of the title to prove ownership by the tenant.
January 16, 2010
Manager Training. My next introductory training class is in Tucson on January 29. The next one in the Phoenix area is February 26 in Glendale. The schedule on the MHCA website is obsolete and incorrect.
I will not be doing any more of these classes in the Tucson or Phoenix areas the rest of 2010. I will be in Yuma in August and will be doing a number of specific seminars at the MHCA annual conference in Phoenix some time in May.
The Tucson and Glendale classes are the standard seven hours (four in landlord tenant law and three in fair housing law) that I have been presenting since 1989. Some managers have been at them many times over the years. Nevertheless if you are a new manager or one who has not been in a class for two years, you ought to sign up for one of these. Consider it refresher training.
I am trying to come up with an outline for an advanced manager class totalling six hours in relevant areas that will satisfy the statutory six hour requirement. This will target experienced managers who have already been through my introductory class and Neal Haney's class. I will probably present it once a year. It will be fairly intense and interactive with the attendees, and will assume some level of experience and understanding of the basics of the business. If anyone has any suggestions for topics you would like to see covered, e-mail me. I am not limiting it to legal matters but will get into management, maintenance and tenant relations as well.
To register for the January or February classes call MHCA at (480) 345-4204 or (800) 351-3350. Do not use the information or forms at the MHCA website. They are obsolete.
MHCA Website and MHC Internet Access. The MHCA website has been a problem for several years. Much of it results from advances in website technology that MHCA has not kept up with. A new site is now being developed that will replace the current one and will be state of the art. It will among other things contain a store to purchase handbooks and forms instantly on line and sign up for training classes. It will be designed to be interactive with sites designed by the same website developer for individual parks.
This developer is designing individual park sites in conjunction with installing wi-fi internet connection service for tenants at extremely reasonable costs. The new site should be helpful in keeping all parties interested in the Arizona MHC industry up to date on what is going on
I think the MHC industry here is now moving into the 21st century as far as the internet is concerned. It will take time and problems will be experienced but in a fairly short time I think a lot of tenants are going to start receiving enhanced internet service at significantly lower costs than are now available.
January 15, 2010
Welcome New Visitors. I understand some MH related sites are referring MHC tenants to this website. While it is designed for park managers, all visitors are welcome.
Legislative Session. The legislature is back in its regular session, though it has been running the last year working on the huge budget deficit. A number of non-budget bills have been introduced. Only one deals with MHC's and it is not terribly significant. It is unlikely anything of great import will get passed this session as long as the budget is such a problem.
Abandonments. Mobile homes continue to be abandoned in MHC's at an alarming rate. Parks should not ignore obvious abandonment situations. If a home is abandoned take action to get it disposed of by contacting the lienholder or initiating a landlord lien sale or bonded title application.
Relocation Fund--New Budget Proposal. Looks like the Governor's Office intends to allow the FBLSD to continue using this Fund as a slush fund. Here is a link to an appendix to the Governor's FY 2011 budget proposal. This will be for the 12 month period beginning July 1,2010.
Look at page 115.
This shows the fund has been depleted by $1.3 Million each during the two previous fiscal years. Another $1.3 Million is approved for use for the next year. On July 1, 2008, the fund balance stood at $7.695 Million. It will be down to $6.500 Million by June 30, 2011 at this rate according to projections. This is despite additional tax assessments paid by tenants during those three years of about $2.725 Million. So around $4 Million Dollars will have been taken out of the Relocation Fund during that three year period by the FBLSD. That money is to be used for "non-appropriated expenditures".
Of course this assumes the accuracy of those figures and projections.
The April 2009 Audit showed that money from the Fund was not being properly spent by the Department. This budget makes it clear that the audit report is being disregarded by the powers that be.
In plain English "non-appropriated expenditures" means slush fund. There are virtually no tenant relocations these days yet the Department apparently continues to use one and a third Million Dollars from the Fund each year to pay it's bills.
It is simply unbelievable to me that tenant organizations sit idly by while their constituents' money is taken by bureaucrats.
When last year's audit results finally came to light, one guy left the Department. He was a scapegoat, apparently, for what really is a pattern of improper expenditures by the State from this Fund. One mid-level bureaucrat is not responsible for such a shameful breach of trust.
It is time to take this Fund away from FBLSD and transfer it to a different agency. In the late 1980's it was under the Department of Administration. So it certainly is not inseparably married to the FBLSD.
January 9, 2010
State Budget Cuts. About a dozen MVD offices throughout Arizona will be closing soon including two in the metro Phoenix area that are fairly high volume offices. One is in East Mesa, the other in Phoenix. If you need to go to the MVD call and make sure your office is still in business. In addition there have been major MVD staff layoffs and waiting times are increasing. Finally, all of these changes are putting inexperienced people in customer service jobs. Many do not understand bonded title procedures and landlord lien sales. Be prepared for even more frustration getting these transactions through.
FBLSD has closed its Tucson office to the public. It has also made significant staff cuts in the Fire Marshall's section and laid off an administrative staffer in its home office. Its announcement trumpets the fact that it's "management staff" is unaffected. I guess we can expect the same fine level of executive expertise from the "management staff" as we have become used to over the past year.
FBLSD Slush Funds. I have received what appear to be comprehensive FBLSD budget documents containing information on its funding for fiscal years 2008 and 2009, among others. It looks at first glance like the Relocation Fund was not the only fund under the Department's control used to pay for its general operations, though the status of the Relocation Fund as a limited purpose trust fund seems unique.
It also looks like this whole scheme of supplementing appropriations from the State's general fund with money taken from the slush funds was approved at the highest level by Gov. Napolitano's budget office. But this is not a partisan issue. Gov. Brewer's office has been well aware of this since early 2009. It ordered the April audit but did nothing to publicize the results. When the report leaked out it found a single sacrificial lamb and then simply moved on without addressing overall deficiencies in the "management staff" that created this disgraceful situation.
Maybe the legislature has it right. Starve the beast; eliminate unnecessary and damaging elements of government by depriving them of money. But that includes cutting off access to slush funds. In the case of this agency its really a shame because the career people are by and large quite capable and experienced. To this ousider looking in, the problems result from the "management staff".
January 6, 2010
Personal Safety. A park manager is missing and the police have been searching for him for two weeks. There is evidence he may have met with foul play. I will post more on this when it becomes publicly available.
I do not believe this has anything to do with his park duties. But it makes one consider just how dangerous it can be dealing with people. You never know the stresses working on the person you are talking to. It is always best not to lose your cool, keep your dealings professional and be polite and respectful at all times. Managers often deal with irate tenants. No matter how mad and irrational the resident may be, show him respect and do NOT get mad at him
Some of the most notorious mass murderers of all time were, by outward appearances normal individuals. Don't risk setting some closet nut-job off by being disrespectful and getting angry at him. Keep cool and stay safe.
January 1, 2010
New Year. My last post in 2009 was pretty glum. There was actually some good news that year. The new court eviction rules went into effect. They worked far better than most of us had dared to hope. Most frivolous fair housing and ALJ cases I am aware of and most groundless lawsuits against landlords I know of were dismissed. Many user fees such as MVD and court filing fees were not increased despite the State's budget problems. No bad legislation affecting the MHC industry got through the legislature. A few individuals causing ridiculous problems for the industry in government and private associations disappeared from the scene. In my narrow area, more lawyers around the State are becoming familiar with laws uniquely affecting MHC's and that is a good thing. I am not getting any younger.
Courts at all levels in the State judiciary tended to do the right thing. Rulings were issued against a wide variety of what are in my view unconstitutional sweeps of State special purpose funds. Even the very liberal federal 9th Circuit Court of Appeals released a decision striking down a local California rent control ordinance as an unconstitutional violation of private property rights.
Eviction rates in all types of residential housing (apartments, rental houses and MHC's) dropped sharply in the last three months of 2009, though abandonments remained high.
On balance the year stunk. But there were bright spots.
Tips For The New Year. Here is a posting I made the end of 2008 which still seems timely to me:
To survive the next year, landlords need to do the same kinds of things they should already be doing.
♦ Do not let tenants fall too far behind in rent. If you fall for sob stories or promises that the tax refund or insurance settlement or unemployment check is coming and will be used to pay past due rent, you will be making a mistake. Getting too far behind makes it impossible for the tenant to dig out and seals his fate of having to move or file Bankruptcy. Serve the non-payment of rent termination notice, and if rent is not paid, get the delinquent tenant out of there.
♦ If a home is abandoned, don't just let it sit there and hope someone will come along and "do something" about it. Get a landlord lien sale or bonded title procedure going now. Odds are that no one is going to "do something" and every month you fail to act is the same as flushing a month's rent down the toilet.
♦ Don't fill vacant spaces in Age 55+ parks with underage residents. If the age restrictions are making it impossible to fill vacancies, consider converting to all age status. But pretending to be an Age 55+ community while making exceptions for childless underage applicants will only get you into very expensive trouble with fair housing enforcement agencies.
♦ Enforce your credit and criminal background criteria, even when it hurts. If you have an applicant with the move-in cash but lousy credit or a serious criminal record, it will be more expensive in the long run to give into the impulse to rent to him now and fill a vacancy.
♦ Don't price yourself out of the market. Know what comparable communities are charging for rent and be competitive with them. Landlords often jack rents up to cover expenses without regard to what the market is. People can move but more importantly, prospective renters are unlikely to choose the most expensive place to live.
♦ Enhance amenities and make your place more attractive. A little paint and landscaping goes a long way. Things like Wi-Fi are fairly cheap to put in and can be a good selling point since not many places have it.
♦ Get along with your tenants and their associations. It is amazing how many prospects are driven away by existing tenants telling them what a terrible place your community is and what a tyrranical jackass you are. Make it a point to have periodic meetings with tenant representatives and to act on tenant complaints. Do what you can to encourage them to refer friends to the community and to sell, not complain about the community when encountering a prospective resident looking around.
♦ Don't get crossways with state and local government. Pay taxes and fees when due to avoid penalties. Ensure the community is in compliance with applicable codes to avoid fines. In all your dealings with the bureaucrats, remember the following quote in this morning's Republic from a bureaucrat talking about tax and fee collections:
"Every time we generate another $100,000 in revenue, it probably saves a job. We take a lot of pride in what we're doing," Johnson said. "The more we get everyone to pay their fair share, the more citizens benefit".
To that bureaucrat and thousands of others like him, you are simply a cow to be milked for every dime he can get to save his job and those of his friends. Don't even try to figure out the logic of his claim that the public benefits from worthless unnecessary government jobs not being aboilished. There is none.
It is going to be another tough year. The best way to get through it is to assume no one will be doing you any favors and most people will be out to screw you. Act defensively.
The information contained on this site is not legal advice and does not create an attorney-client relationship with the user. Landlord-tenant and fair housing laws are always changing and are subject to interpretation. You should always consult an attorney before taking any action.
This is an attempt to collect a debt. Any information obtained will be used for that purpose.
Michael A. Parham
Williams, Zinman & Parham, P.C.
7701 E. Indian School Rd., Suite J
Scottsdale, AZ 85251
Phone: (480) 994-4732
Fax: (480) 946-1211