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) 2011 by Michael A. Parham. All rights reserved
December 24, 2011
Immigration Developments. A series of federal court decisions in Arizona is going to have the effect of severly restricting the ability of the Maricopa County Sheriff's Department to enforce immigration laws. To begin with the U.S. Justice Department has determined that the Sheriff has been engaged in civil rights violations against minority, mainly Hispanic groups, and has threatened a federal court suit if the Sheriff doesn't cease. The Sheriff has indicated some willingness to go along with this.
An already pending federal court suit has resulted in authorization of a class action alleging civil rights violations by the Sheriff and this case will go to trial. It may result in greater restrictions on the Sheriff in this area. In the SB 1070 federal court suit another federal Judge has entered a preliminary injunction prohibiting the State from enforcing much of the year-and-a-half old law against illegal immigration. This case is now before the U.S. Supreme Court.
The Departmehnt of Homeland Security has revoked the authority of the Sheriff to screen jail inmates on their immigration status. They say they will do it themselves but that is doubtful.
The upshot of this is that there is a public demand in Arizona that immigration laws be enforced but the efforts to enforce them by State authorities are being thwarted by the federal courts.
In other parts of the country those efforts have instead been directed at the private sector. For example here and elsewhere laws have been enacted requiring employers to verify immigration status before hiring people. In other locales legislation has been introduced requiring landlords to verify immigration status before renting to people. We have seen bills like that introduced in the Arizona Legislature in past years but they have never gone anywhere.
I think landlords have enough to do without having to become immigration police. Especially given the total lack of training community managers receive in this complex area, it would be a huge and unfair burden to place on landlords to require them to do this.
But public pressure still exists to enforce immigration laws and efforts to have them enforced by police agencies are being frustrated in the courts. I fear that this pressure will result in new bills requiring landlords to start doing this.
Also, look for police departments as part of their Crime Free Programs to start insisting landlords be more demanding in requiring proof of lawful residence by applicants for tenancy. Landlords are really in the middle here since Fair Housing Laws restrict what they can do here by making it unlawful to discriminate in housing on account of race and national origin. Nothing in these laws makes an exception for checking immigration status. Landlords need to resist efforts to make them enforce immigration laws be requiring proof of lawful presence in the country.
AAMHO and ALJ Cases. AAMHO has started helping tenants in their presentation of cases in Mobile Home Park ALJ proceedings. As many folks know this process was created in 1987 to enable MHC tenants to have grievances against their landlords arising under the MHP Landlord Tenant Act decided in speedy and somewhat informal administrative law judge proceedings.
I have always thought there were legal problems with this system but have nevertheless supported it as a way to get disputes fairly resolved without the time and expense involved in going to court. Over the 25 year history of this process the system has had problems. We have had problems in the past with biased ALJ's and with government bureaucrats administering the program who did not understand it.
The bias problem ended in 1996 when the hearings were transferred to the Office of Administrative Hearings. The inept bureaucrat problem continues but is fairly minor. It is part of the overall ineptitude that pervades much of the FBLS Department.
Since AAMHO started directly helping tenants in individual cases the process has gone much more smoothly. Current AAMHO leadership has made a good faith and diligent effort to learn the law and to counsel tenants to be reasonable in their demands and expectations in these cases. By doing so, cases can focus on legitimate issues and in so doing get them correctly resolved. Often this can be done without a hearing once the issues are clarified.
In this respect AAMHO is doing a real service to its members getting cases correctly resolved without wasting parks' time and money on legal fees that ultimately result in rent increases. Although getting praised by me probably isn't going to do the AAMHO leadership much good, I believe in giving credit where it is due.
Many years ago, AAMHO and MHCA developed a program to resolve disputes by mediation before they even got to the ALJ stage. That program worked pretty well but got scuttled when relations between the two groups broke down. They are now planning to bring the program back and I hope they do. It will mean less business for me but it will help improve landlord-tenant relations.
Hopefully this newly rediscovered ability to work together on the many areas of common interest to these groups will translate to the legislative arena. There are a number of areas our laws that are in need of improvement from both points of view. Recent poisonous relations between AAMHO and MHCA have made it impossible to get anything done at the Legislature. Maybe that will change.
December 15, 2011
Caregivers Under the MHP LTA. I received an e-mail asking about ARS § 33-1413.03, a part of the MHP Landlord Tenant Act dealing with caregivers. This statute was enacted in the mid 1990's, before the advent of a number of medical privacy laws and disability related government policies. In many respects the statute is obsolete and literally following it will likely violate several federal laws and regulations.
The statute requires the landlord to allow a residential caregiver but allows him to require a "written treatment plan" from the "resident's physician" showing the need for the caregiver and also allows the landlord to require the plan be updated every six months.
This law was patterned after a similar law in California (section 799.9 of the California mobilehome residency law).
However, since then HIPAA, a federal law protecting consumer medical privacy was enacted. In addition rules dealing with reasonable accommodations under fair housing laws have been evolving. Strictly enforcing a landlord's rights under the Arizona Caregiver statute will likely violate both of these later created federal restrictions.
Essentially, a landlord needs to allow a residential caregiver as a "reasonable accommodation" under fair housing laws. Federal restrictions say the following:
Under the Fair Housing Act, it is usually unlawful for a housing provider to (1) ask if an
applicant for a dwelling has a disability or if a person intending to reside in a dwelling or anyone associated with an applicant or resident has a disability, or (2) ask about the nature or severity of such persons' disabilities.
These rules go an to address cases where the disability is obvious:
A provider is entitled to obtain information that is necessary to evaluate if a requested
reasonable accommodation may be necessary because of a disability. If a person’s disability is obvious, or otherwise known to the provider, and if the need for the requested accommodation is also readily apparent or known, then the provider may not request any additional information.
They go on to say:
If the requester's disability is known or readily apparent to the provider, but the need for
the accommodation is not readily apparent or known, the provider may request only information that is necessary to evaluate the disability-related need for the accommodation.
When the disability is not obvious, the government's position is:
A housing provider may not ordinarily inquire as to the nature and severity of an
individual's disability... However, in response to a request for a reasonable accommodation, a housing provider may request reliable disability-relatedinformation that (1) is necessary to verify that the person meets the Act’s definition of disability (i.e., has a physical or mental impairment that substantially limits one or more major life activities), (2) describes the needed accommodation, and (3) shows the relationship between the person’s disability and the need for the requested accommodation. Depending on the individual’s circumstances, information verifying that the person meets the Act's definition of disability can usually be provided by the individual himself or herself (e.g., proof that an individual under 65 years of age receives Supplemental Security Income or Social Security Disability Insurance benefits or a credible statement by the individual). A doctor or other medical professional, a peer support group, a non-medical service agency, or a reliable third party who is in a position to know about the individual's disability may also provide verification of adisability. In most cases, an individual's medical records or detailed information about the natureof a person's disability is not necessary for this inquiry.
Putting all this together, requiring a physician to provide the treatment plan and not any other medical provider or other knowledgeable person violates these provisions. And requiring updates every six months almost certainly violates them.
This is taken from the "JOINT STATEMENT OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND THE DEPARTMENT OF JUSTICE--REASONABLE ACCOMMODATIONS UNDER THE FAIR HOUSING ACT" http://www.hud.gov/offices/fheo/library/huddojstatement.pdf.
Simply put, our caregiver statute is obsolete and probably violates federal laws. The only safe way to evaluate caregiver requests is by following the principles in the Joint Statement.
Under Age Disabled Child in Age 55 Community. That same e-mail involved a recent post and questioned whether an age 55 community needs to consider the application of an over 55 household that also has an under age dependant child who is handicapped. See my August 6, 2011 blog entry.
The law makes no distinction between an existing tenant who suddenly has responsibility for an under age handicapped child imposed on him, and an applicant who presently has such an obligation. In both cases it is treated as a request for reasonable accommodation and those rules apply. If the need is legitimate, the age restriction would be waived for the handicapped child of the otherwise qualified applicant.
If the tenants die or move and the child is listed only as a resident and has not signed the lease as a tenant, he does not automatically get to remain there alone. But if he is capable of living independantly he may request another reasonable accommodation allowing him to become a tenant on his own. The likelihood of that happening is extremely remote. If he could live independently the original tenants wouldn't have been able to quailfy in the first place since the child would not have truly been dependent on them for support.
Here is a link to the Court of Appeals case that gave rise to these questions. http://caselaw.findlaw.com/az-court-of-appeals/1314991.html
When is a Guest a Guest. Finally that e-mail questioned whether a "shack up" situation where the "friend" spent the night with his or her "significant other" but left in the morning (e.g., there from 1 AM to 9 AM) was spending the night such that the night counted toward the 30 nights in a 12 month period that results in a person no longer being a guest and needing to qualify as a resident under the MHP LTA.
In my view it does. Of course proving 30 shack-ups in a 12 month period could be difficult.
December 13, 2011
New Firm Newsletter. Here is a new newsletter going out to everyone on the firm mailing list. http://www.wzlawpc.com/system/files/winter%202011%202012%20newsletter.pdf
December 10, 2011
Tenants Not Making Home Payments. In the last few years a number of parks have found themselves financing the sale of mobile homes to tenants. Occasionally a tenant will be current on paying space rent but fall behind on the home payments. Parks can not file eviction cases against tenants current on rent but delinquent on home payments. So what are they to do?
The financing contract (normally an installment sale agreement) identifies what the lender can do if payments fall behind. Normally it requires that a notice of default be given and provides that if the payments are not then brought current the Lender can repossess the home.
If the home is vacant it can be repossessed by simply changing the locks and taking actual possession. An affidavit of repossession is filed with the MVD to get title transferred to the Lender and a notice is sent to the tenant/borrower explaining what will happen to the home (either it will be sold at a public sale or, if less than 60% of the purchase price has been paid, the Lender will elect to keep the home and release the debt).
If the home is still occupied, it cannot be repossessed in that manner. In that case a court action seeking an order that the tenant/borrower turn the home over so that it can be repossessed and disposed of should be filed. If the remaining loan balance is under $10,000 this can ordinarily be filed in Justice Court. If over that amount it needs to go to Superior Court.
These cases move somewhat slower than evictions but there is no alternative unless the Lender just wants to see his investment go up in smoke.
We handle many such cases for both banks and parks. Often a default notice from our office gets the tenant/borrower's attention and the payments are brought current. But occasionally a suit is necessary. If in Justice Court they can normally be completed in around 90 days. In Superior Court it takes longer and is much more expensive. However most such cases even in Superior Court can be completed for about $1,000. It is often much less expensive in Justice Court.
A key is to not let payments get so far behind that the tenant/borrower simply can no longer come up with the money.
Finally a bankruptcy filing will stop any repossession activity and require the lender to apply to the Bankruptcy Court for a lifting of the automatic stay enabling the Lender to recover possession of the home. That can get expensive. Often prompt action when the loan first goes into default avoids such bankruptcy filings.
Note re SAFE Act. Parks financing homes are probably subject to the SAFE Act. See my November 6 and October 29 posts for information.
Training. MHCA has scheduled me for only two manager training classes in 2012. An additional session may be added later but it will probably be different from my normal basic class of landlord tenant law in the morning and fair housing in the afternoon. My scheduled classes are:
January 27, 2012 in Glendale
June 15, 2012 in Flagstaff.
Once again they only have me scheduled for one class in the Phoenix metropolitan area next year so any park, especially if it has a new manager, that wants my training class needs to plan on one of those two dates. If in the Phoenix area, it should get registered ASAP for the Glendale class in January. Contact MHCA at (480) 345-4202 or (800) 351-3350 to sign up.
Disputes Between Tenants. With the return of the snowbirds, disputes between elderly but childish tenants that were on hold over the summer are reigniting. It is amazing to me how juvenile some of our senior citizens can be.
I have been getting calls from park managers on a frequent basis since October about tenant complaints concerning neighbors. One or often both tenants to the dispute want the park to "do something". In other words they want the manager to take their side in what is really a personal dispute. These squabbles can involve an infinite variety of things from car parking in driveways to grandchildren visiting to dog barking to giving one another nasty looks, etc.
In these cases the manager needs to keep in mind that he is not a playground referee or a cop. The manager's job is to ensure tenants are complying with park rules and relevant laws as well as their rental agreements. It is also to ensure that tenants are not unreasonably disturbing their neighbors. By "unreasonably" I mean not engaging in conduct that to a normal person of ordinary sensibilities would be bothersome. If the conduct would not disturb a normal reasonable person, the fact that is is bothersome to some old coot who has an axe to grind with his neighbor is immaterial.
If the conduct is not unreasonable and does not violate park rules or the rental agreement, tell the complaining tenant there is nothing you can do and he just needs to work it out with his neighbor. When the neighbor comes in to complain, evaluate the complaint under the same criteria and if it does not rise to that level, tell the neighbor the same thing.
Managers need to keep in mind that they are managers of a rental community, not clergymen, counsellors, mediators, traffic cops or playground referees. Many times there is nothing a manager can do to make a complaining tenant happy when his neighbor's conduct is irksome to him.
Fair Housing Cases. A lot of fair housing complaints have come in over the last couple of months. Most seem to involve claims that landlords refuse to make "reasonable accommodations" to rules to enable them to comfortably reside in the park. Often the claim involves an animal that the park thinks is just a pet that violates the rules but the tenant asserts is an "assistive animal" that a resident needs to help him cope with a handicap. Now I am seeing claims that two or even more "assistive animals" are needed.
No matter how spurious the request for an assistive animal appears, take it seriously. If the need for the animal is not apparent, ask for some sort of medical verification that the animal is really necessary with a description of how the animal will help the resident deal with his disability. Once a medical provider's statement of need is received, if one is, the park will more than likely need to agree to the request.
If the animal is a dangerous breed the park may be able to agree to an animal in principle but object to that particular breed. In that case an "interactive process" may need to be engaged in to see if a different animal can do the job.
If in doubt how to proceed, check with the park attorney. An inadvertent mistake in responding to these requests could prove costly if a fair housing complaint is filed.
2012 Legislative Session. This starts in about a month. I think a lot of bills are going to be introduced affecting the rental housing industry and I will try to stay on top of them. Bills are already being introduced that will be waiting when the Legislature convenes. So far none affect our industry but its only just begun.
December 7, 2011
Pearl Harbor Day. My dad was a career Marine who had just been transferred to the USS Enterprise in the Pacific in early December 1941. When he arrived in Pearl Harbor it was still in flames after the Japanese attack. He immediately boarded the Enterprise and saw action at Wake Island, the Doolittle Raid on Tokyo, the Battle of Midway and the Battle of the Eastern Solomons where he was promoted to Sergeant Major and decorated for bravery. Shortly after that he was commissioned as an officer, Ultimately he retired as a Colonel after 30 years active service in 1962. He is buried in Arlington National Cemetary.
I think of him a lot as the WWII veterans are dying off, especially this 70th anniversary of the attack on Pearl Harbor. This country and its population have changed a lot since those dark days. Much of that change, I fear is not for the better.
Tenants Dying and Owning Homes in Parks. Most of these people will not have their estates probated and in most cases their homes will be cleaned out by relatives and simply left in the park. In almost all cases the park will be forced to treat the home as abandoned and to pursue a landlord lien sale remedy.
Many parks wait several months to give the family a chance to dispose of the home. In many cases they delay action based on promises the home is tied up in probate or similar stories. Almost always this is not the case.
Any park with a home in the name of a deceased person where the rent is more than a month in arrears should initiate a landlord lien sale to get it disposed of. There is a built in 72 day waiting period before the sale can be completed meaning it can always be canceled if the rent gets paid. But if it doesn't (as is usually the case) the sale can be completed before too much rent accrues and is lost.
December 2, 2011
Search Engine. I installed a search engine on the home page for this site. I am not thrilled with how thorough it is but maybe some will find it helpful. This will search my website, the WZP firm website and the MHCA website.
Relocation Fund Ripoff. I have been writing for years about the FBLS Department subsidizing its bloated bureaucracy by taking money it is not entitled to out of the Mobile Home Relocation Fund. The latest MHCA Newsletter contained a flyer that I think every park should print and post on its bulletin board for tenants to read. Here it is: http://www.michaelparhamlaw.citymax.com/f/MHCA_Relo._Fund_Flyer.pdf
December 1, 2011
Grifters. For some reason these kind of people seem attracted to MHC's.
A grifter is someone who swindles you through deception or fraud. Synonyms include fraudster, con artist, cheater, confidence man, scammer, hustler, swindler, etc. I have met and evicted many grifters over the years. Typically grifters are male though female con artists are not uncommon. They typically try to appear well dressed though their clothes are usually pretty seedy. They try to show some "bling" by wearing showy though usually cheap jewelry. They often drive a "luxury" car like a ten year old Cadillac or Linclon.
I don't care about these things except they are symptomatic of grifters. The problem with the grifter is the con job he is often able to do on a naive or unsuspecting manager or park owner. A recent example involves a grifter whose girlfriend moved into a park after buying a cheap trailer and getting approved for tenancy. The park is old and pretty worn looking with a number of vacancies. The grifter moved in with his girlfriend after convincing the park owner there was no need to incur the extra expense of processing a second application.
He also spun a story about having managed parks in other states in the past and how the present property manager wasn't doing a very good job. He told the owner he could take over the park and do a lot of the maintenance work himself thus saving the owner money in maintenance expenses and working for less than the owner was now paying. The owner agreed to this so the grifter settled in and started doing what he pleased. He also got the owner to say he didn't need to pay rent for the girlfriend's space.
He sent a notice out to other tenants saying he was the new manager in the expectation that he could start collecting rents.
Fortunately the owner's property management firm sent the grifter a non payment of rent notice and referred the case to me when the current rent was not paid and before the grifter could start collecting rents from other tenants. The grifter insisted on a trial in his eviction proceeding but did not have a pleasurable experience and did get evicted.
This owner was lucky. I have seen cases where con artists convinced owners to rely on them as managers without ever checking them out by spinning convincing stories about their backgrounds and abilities, and managed to get hold of a lot of rent and cause havoc in the park before skipping out.
If you own or manage a park you may think you are not stupid or naive enough to be conned by a grifter. But these people are convincing and an owner desperate for help in dealing with a park full of problems barely making expenses is ripe picking for a grifter.
There is an old maxim: If something sounds too good to be true, it is.
If you have an older park with a number of vacancies and are having management problems you very well may attract con artists looking to sucker you into using them for help and to give them the opportunity to swindle you out of some money. Be careful and don't be the con artist's next victim.
Sometime tenants can turn into amature grifters, most often by lying about why the rent is not being paid and promising that the big tax refund or injury settlement is on the way. Don't believe any of that. When rent is not paid, serve the termination notice and evict if it does not get paid after that.
November 25, 2011
City of Benson Case Amicus Brief. This involves a case on appeal to the Arizona Court of Appeals. MHCA had me file an Amicus Curiae (friend of the Court) brief explaining why it was necessary to grandfather older MHC's in when local governments change zoning laws so that older parks in compliance before are no longer in compliance. Its pretty dense reading but if interested you can see the brief here: http://www.michaelparhamlaw.citymax.com/f/MHCA.City.of.Benson.Amicus.Brief.pdf My partner Mark Zinman did most of the legal research on this.
It will be a few months before the case is decided. Both sides have very able attorneys representing them in the case and there is no guarantee on the outcome, though the Park prevailed in the trial court.
November 24, 2011
MHC Evictions. Here is a different approach by a landlord to evicting a mobile home park tenant. http://www.clickorlando.com/news/Man-charged-with-attempted-murder-in-forklift-attack/-/1637132/4812056/-/127my6h/-/index.html
November 22, 2011
A Thanksgiving Story. Sue at our office sent me this heartwarming Thanksgiving story I thought I would share with you.
"Winston, come into the dining room, it's time to eat," Julia
yelled to her husband.
"In a minute, honey, it's a tie score," he answered.
Actually Winston wasn't very interested in the traditional
holiday football game between Detroit and Washington.
Ever since the government passed the Civility in Sports Statute
of 2017, outlawing tackle football for its "unseemly violence" and the
"bad example it sets for the rest of the world", Winston was far less
of a football fan than he used to be.
Two-hand touch wasn't nearly as exciting. Yet it wasn't the game
that Winston was uninterested in.
It was more the thought of eating another Tofu Turkey. Even
though it was the best type of Veggie Meat available after the
government revised the American Anti-Obesity Act of 2018, adding fowl
to the list of federally-forbidden foods, (which already included
potatoes, cranberry sauce, and mincemeat pie), it wasn't anything like
And ever since the government officially changed the name of
"Thanksgiving Day" to "A National Day of Atonement" in 2020, to
officially acknowledge the Pilgrims' historically brutal treatment of
Native Americans, the holiday had lost a lot of its luster.
Eating in the dining room was also a bit daunting. The unearthly
gleam of government-mandated CFL light bulbs made the Tofu Turkey look
even weirder than it actually was, and the room was always cold.
Ever since Congress passed the Power Conservation Act of 2016,
mandating all thermostats - which were monitored and controlled by the
electric company - be kept at 68 degrees, every room on the north side
of the house was barely tolerable throughout the entire winter.
Still, it was good getting together with family. Or at least
most of the family.
Winston missed his mother, who passed on in October, when she
had used up her legal allotment of life-saving medical treatment.
He had had many heated conversations with the Regional Health
Consortium, spawned when the private insurance market finally went
bankrupt, and everyone was forced into the government health care
And though he demanded she be kept on her treatment, it was a
"The RHC's resources are limited", explained the government
bureaucrat Winston spoke with on the phone. "Your mother received all
the benefits to which she was entitled. I'm sorry for your loss"
Ed couldn't make it either. He had forgotten to plug in his
electric car last night, the only kind available after the Anti-Fossil
Fuel Bill of 2021 outlawed the use of the combustion engines - for
everyone but government officials.
The fifty mile round trip was about ten miles too far, and Ed
didn't want to spend a frosty night on the road somewhere between here
Thankfully, Winston's brother, John, and his wife were flying in.
Winston made sure that the dining room chairs had extra cushions
for the occasion.
No one complained more than John about the pain of sitting down
so soon after the government-mandated cavity searches at airports,
which severely aggravated his hemorrhoids.
Ever since a terrorist successfully smuggled a cavity bomb onto
a jetliner, the TSA told Americans the added "inconvenience" was an
"absolute necessity" in order to stay "one step ahead of the
Winston's own body had grown accustomed to such probing ever
since the government expanded their scope to just about anywhere a
crowd gathered, via Anti-Profiling Act of 2022.
That law made it a crime to single out any group or individual
for "unequal scrutiny," even when probable cause was involved.
Thus, cavity searches at malls, train stations, bus depots,
etc., etc., had become almost routine. Almost.
The Supreme Court is reviewing the statute, but most Americans
expect a Court composed of six progressives and three conservatives to
leave the law intact.
"A living Constitution is extremely flexible", said the Court's
eldest member, Elena Kagan. "Europe has had laws like this one for
years. We should learn from their example", she added.
Winston's thoughts turned to his own children.
He got along fairly well with his 12-year-old daughter,
Brittany, mostly because she ignored him. Winston had long ago
surrendered to the idea that she could text anyone at any time, even
during Atonement Dinner.
Their only real confrontation had occurred when he limited her
to 50,000 texts a month, explaining that was all he could afford.
She whined for a week, but got over it.
His 16-year-old son, Jason, was another matter altogether.
Perhaps it was the constant bombarding he got in public school that
global warming, the bird flu, terrorism, or any of a number of other
calamities were "just around the corner", but Jason had developed a
kind of nihilistic attitude that ranged between simmering surliness
and outright hostility.
It didn't help that Jason had reported his father to the police
for smoking a cigarette in the house, an act made criminal by the
Smoking Control Statute of 2018, which outlawed smoking anywhere
within 500 feet of another human being.
Winston paid the $5,000 fine, which might have been considered
excessive before the American dollar became virtually worthless as a
result of QE13.
The latest round of quantitative easing the federal government
initiated was, once again, to "spur economic growth."
This time, they promised to push unemployment below its
years-long rate of 18%, but Winston was not particularly hopeful.
Yet the family had a lot for which to be thankful, Winston
thought, before remembering it was a Day of Atonement.
At least, he had his memories.
He felt a twinge of sadness when he realized his children would
never know what life was like in the Good Old Days, long before
government promises to make life "fair for everyone" realized their
Winston, like so many of his fellow Americans, never realized
how much things could change when they didn't happen all at once, but
little by little, so people could get used to them.
He wondered what might have happened if the public had stood up
while there was still time, maybe back around 2011, when all the real
"Maybe we wouldn't be where we are today if we'd just said
'enough is enough' when we had the chance," he thought.
Maybe so, Winston. Maybe so.
Happy Thanksgiving. Enjoy it while you can.
November 21, 2011
Holiday Evictions. Here is a repeat of a post I put up in 2009 around this time.
It's that time of year again when managers with full hearts and empty heads decide to put off evictions for the holidays. I suppose some owners are also responsible for this lunacy.
Am I Scrooge? Well yes, but that has nothing to do with my views on this. When a tenant is allowed to not pay rent during the holidays, he often winds up spending the money on other things like presents for the kids. Meanwhile late charges build up and more rent comes due the following month. A park not evicting over November rent and waiting until after the holidays in January has allowed three months' rent and associated late fees to build up. The tenant has spent the money and by the time the day of reckoning arrives has gotten so far behind that he can not possibly get caught up.
But if the park forced the issue in November when the rent came due, the amount due would be manageable and the tenant would not have had the opportunity yet to spend the money on Christmas presents. He can afford to dig out of the fairly small hole he is in.
Making the tenant deal with the issue now is the best Christmas present the park can give since it will enable him to keep a roof over his head after the start of 2010. Giving into the soft hearted and even softer headed instinct to be "kind" and not file to evict eventually results in the tenant being forced to move and in most cases to lose his home.
I think there should be a special place in Hell for the manager who does this. It is an evil Christmas present that more times than not will create a homeless family.
November 19, 2011
Mobile Home Sales--Trying to Evade Legal Requirements. Many parks for one reason or another wind up owning homes that they don't want to own. Parks are normally in the business of renting spaces, not renting or dealing in mobile homes. Normally the park wants to get the home transferred to someone who will occupy it and pay space rent as a tenant. But often through ignorance or otherwise, I see parks trying to avoid placing title in the home buyer's name.
Reasons for this vary. Parks may believe keeping title in their names after agreeing to sell the home will help prevent the buyer from moving the home out. They may believe keeping title in the park's name until the home is paid for gives it security in case the buyer stops making payments. What ever the reason, the law is pretty clear that title needs to be transferred to the buyer when the home sells and a lien should be placed on the title in favor of the park/seller protecting its interests until the home is paid for.
Doing it the right way gives the park/seller plenty of protections. By the right way I mean signing a purchase contract when the deal is made. The purchase contract establishes a price, a down payment, a deferred balance, a payment schedule, and identifies the interest rate. It sets a date for closing on the sale.
At closing an installment sale contract is signed. This identifies the parties, the price, the down payment, the interest rate on the deferred balance, the payment schedule, and contains a series of disclosures including the APR, normally in a string of boxes on the front page, complying with the federal Truth In Lending Act (called TILA Disclosures). The installment sale agreement also contains a number of provisions protecting the park/seller until the purchase price is paid and creates a "security interest" in the home. This security interest is perfected with the notation of a lien in favor of the park/seller on the Certificate of Title.
One of the protections in the installment sale agreement should be a provision prohibiting the buyer/tenant from removing the home from its present location before the balance of the price is paid without the park/seller's consent.
When the transfer of title papers are presented to the MVD a new title is issued in the name of the buyer/tenant but showing a lien in favor of the park/seller. The original title is then sent to the lienholder (the park/seller) who keeps it until the lien is paid in full.
If the payments on the home stop coming in, the park/seller simply repossesses the home, normally a fairly simple matter.
Many folks don't understand the extent of protections the law gives a lienholder when a home is sold subject to a lien. Because of this they try to avoid transferring title until all the payments have been made. And there are other reasons including evading coverage of dealer licensing laws.
Dealer Licensing Laws. If someone "sells" two or more mobile homes in a 12 month period he is by definition a "Dealer" and needs to be licensed by the Office of Manufactured Housing. ARS § 41-2142 (9) says: "A lease or rental agreement by which the user acquired ownership of the unit with or without additional remuneration is considered a sale under this chapter."
So using rent to own arrangements or lease options to avoid these laws will not work. In addition a sale in which title is held until the price is paid in full is still a sale and counts towards the two per year that triggers the dealer licensing laws.
Registration Laws. ARS § 28-2131 says that liens not perfected with a notation of the lien on the title are not valid against people with claims on the mobile home who do not have actual knowledge of them. ARS §§ 28-2152, 2153 and 2063 requires the mobile home to be titled in the name of the "Owner". ARS § 28-101 defines "owner" in this manner:
40. "Owner" means:
(a) A person who holds the legal title of a vehicle.
(b) If a vehicle is the subject of an agreement for the conditional sale or lease with the right of purchase on performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee or lessee, the conditional vendee or lessee.
What this means is that the person buying the home is the "Owner" and the law requires it be titled in his name. Failure to title the home in the buyer's name would allow him or his creditors to compel titling it in his name and since the lien was not perfected as described above, the lien rights could be lost.
Finally ARS § 28-2009 says a Certificate of Title is only valid as long as the unit is owned by the person shown in it as the "Owner".
The long and short of it that if a home is sold, put it in the buyer's name, sign an installment sale agreement, and have a lien in favor of the seller who is carrying back part of the purchase price shown on the title as a lienholder.
Evading the SAFE Act. Lots of people are horrified at the SAFE Act and the fact that it applies to the financing of mobile homes by sellers carrying back part of the purchase price. It is common to see Google searches on the subject "Evading the SAFE Act".
The HUD regulations recently issued under the SAFE Act make it clear that the normal things people think of to avoid coverage are not going to work. It is clear that sales are covered. But so are things like leases with options to buy, rent to own arrangements, conditional sales agreements where title is held until the price is paid in full, etc. All of them are clearly covered.
About the only thing not covered is a pure rental of the home with no agreement on a later transfer of title. And that creates a universe of other problems since rental units must be maintained in compliance with codes by the landlord, and since rental units are often severely damaged by tenants necessitating costly repairs by the landlord.
November 13, 2011
Old Parks as Non Conforming Uses. What happens if you have a MHC that is pretty old. It does not have specific lot lines like a subdivision. Mobile homes were placed on ill defined spaces roughly equidistant from one another and with sufficient setbacks to satisfy fire codes. Utilities were put in to each space and from the late 1960's on things were okay.
Then two things happen. First, the local municipality enacts zoning ordinances imposing setback requirements greater than what now exist in the park. And second, older homes start getting removed and replaced.
The question comes up: When a home is replaced does the incoming home need to meet the then current set back requirements? This is often impossible because the old home did not meet them but was considered "grandfathered in", or in legal terms, the old home was treated as a non conforming use and exempt from having to satisfy setback requirements enacted after it was set up. Its also impossible because newer homes tend to be bigger than older ones.
Or, in the alternative, is the entire park considered "grandfathered in" meaning that the new set backs do not apply even when homes are being replaced throughout the park and new homes are okay as long as they do not violate zoning in place when the park was first opened and do not violate fire and other safety codes.
There are hundreds of parks throughout the State in this situation. Different zoning authorities have a variety of ways of addressing these situations and for decades the industry has been muddling through. But it is a recurring problem.
A case has now reached the Arizona Court of Appeals involving a town which has steadfastly argued that in this situation only the old individual home is "grandfathered" and any replacement must satisfy all setbacks and other zoning ordinance requirements.
As a practical matter this is often impossible since the existence of homes on adjoining spaces makes it impossible for any incoming home to meet all requirements. The answer is to either get some sort of variance which is granted at the discretion of the local government and is not a matter of right, or to just leave the space vacant. Over time an increasing number of these situations can cause blight in the park and drive it bankrupt.
The answer that comes out of the Court of Appeals in this case may well have a profound impact on older parks in this State. Both sides have engaged expensive high powered legal talent and the briefs being submitted are enhaustive.
MHCA has engaged me to file an amicus curiae (friend of the Court) brief explaining how much of an impact this case will have on the MHC industry and how devastating a decision treating only the individual older homes and not the park as a whole as being "grandfathered in" will be.
A decision will be released probably early next Spring.
November 9, 2011
Marine Corps Birthday; Veterans Day. Tomorrow, November 10 is the 236th anniversary of the founding of the U.S. Marine Corps in Philadelphia. I was raised by a career Marine Corps officer and this branch of the service is near and dear to me. I like to joke that I spent 18 years in boot camp and that is why I went into the Navy when my time came, not the Marine Corps. Regardless, anyone who served in the Marines has my highest respect.
The following day, November 11, is Veterans Day. This started out as Armistice Day honoring the signing of the armistice in 1918 ending hostilities in World War I. In 1954 it was redesignated as Veterans Day to honor all persons who have served in the armed forces.
Over the last ten years our military has been continuously engaged in two extremely dangerous wars with no front lines and no rear echelon to get away from the combat zones. It is fitting to honor our veterans and especially our newest ones, on this important holiday.
Veterans are not Handicapped. In past years I have ranted about people who come to me and express fears that someone is potentially dangerous or mentally disabled because he is a veteran. This is in large part because the media portrays so many nut cases as being that way because they were in the service. I have always believed this is a stereotype and that it is insulting and (pardon the phrase) offensive.
In this morning's Republic there is a column by two young women law professors at ASU who obviously have no military experience. In a nutshell they argue that our criminal laws should be revised to create separate criminal courts for veterans (we already have a few of these) and to make past service in the armed forces a mitigating factor in criminal prosecutions and sentencing.
The gist of this is similar to what I have complained about in the past. In their view military service has an effect on people who served that tends to make them more likely to commit crimes after release from the service. It treats veterans as victims and extends pity to them by giving them a special break when they commit crimes.
Such a view is profoundly ignorant and really insulting to veterans. It is also indefensable when the true victims of crime committed by veterans or others are taken into account.
November 6, 2011
Mr. Ed Was a Zebra. Snopes.com bebunks urban myths. I was really surprised that they confirmed that Mr. Ed was really a zebra. See here. Be sure to read the additional information link at the bottom. http://www.snopes.com/lost/mistered.asp?version=color#toggle
SAFE Act--Arizona Five or Fewer Exemption. Arizona like many States created an exemption for owners financing sales of their units if they financed five or fewer in a 12 month period. This is called a de minimus exemption. Texas also allowed five or fewer. Other States like Pennsylvania allowed three or fewer. These de minimus exemptions were included in the various State laws because the Federal SAFE Act defines "loan originators" as people who "habitually or repeatedly" finance sales. The idea, apparently, was that someone involved in fewer than the number of transactions exempted (five per 12 month period in Arizona) does not do this "habitually or repeatedly".
When HUD adopted its final regulations implementing the federal SAFE Act, it was asked to include a provision approving de minimus exemptions like those enacted by Arizona. Here is HUD's response in its comments to the final regulations:
"In regard to the request for a de minimis exemption for manufactured home loans, as noted in HUD’s response to the earlier comments on seller financing, HUD has no authority to establish a de minimis exemption for individuals who are engaged in the business of a loan originator. Unlike the provisions of the SAFE Act applicable to the federal banking agencies, section 1505 of the SAFE Act, which involves state registration and licensing, makes no allowance for any de minimis exception."
So the federal regulations implementing the SAFE Act do not recognize the validity of the five or fewer exclusion available under the Arizona law. That is why my October 29 entry observed that the Arizona five or fewer exemption appears inconsistent with the federal law.
Sometimes lawyers must be the bearers of bad news. There are a lot of folks who don't like me saying this. Others upon hearing it immediately start looking for loopholes to avoid the burden of compliance. Most loopholes won't work and, if the Feds get into the enforcement business, sellers financing sales may be in for big problems.
SAFE Act Applies to RV Sales. To make things worse, HUD construes the word "dwelling" as applying even to RV's and houseboats. The HUD comments to its final regulations contain this passage:
HUD does not have authority to alter the meaning of “dwelling” in section 103(v) and its implementing regulations. Accordingly, an individual engaging in the business of a loan originator with respect to a loan that is to be secured by a manufactured home, mobile home, recreational vehicle, house boat, or trailer that is to be used as a residence is subject to licensing under the SAFE Act.
So if the RV is used as a residence, the SAFE Act applies. That may be difficult to figure out when a fifth wheel or travel trailer is being sold. It may be best to have buyers of such units sign statements saying they are not purchasing the unit for residential purposes.
November 5, 2011
WZP Newsletters. I decided to add a page on this site that gives access to our firm newsletters. Check it on the left side.
November 4, 2011
WZP Newsletters. Our firm periodically publishes newsletters that are e-mailed to our clients. They have proven quite popular and have generated a fair amount of favorable comment. We are now putting them on line and our firm website will have an archive of all that we have published. So if you have deleted one you want to re-read, you can find it at this link: http://www.wzlawpc.com/content/newsletters-articles
If you want to be placed on our e-mail list for these newsletters you can send me an e-mail or call our office and speak with Chris. You do not need to be a client to get on that list.
Micro Meth Labs. Wednesday's Wall Street Journal carried an article about the newest development in the meth manufacturing industry. A new "One-Pot" meth lab is now replacing tho old full kitchen size meth operations we have encountered in the past. A single two liter soda bottle is used with ingredients that can be purchased on a single trip to the pharmacy and can be mixed together anywhere. Lithium metal is obtained from batteries and used to produce the necessary chemical reaction.
Meth is highly toxic and extremely addictive. The existence of a meth lab in a mobile home virtually destroys the home since effective clean up is often impossible or, if possible, costs more than the value of the home after it is completed. Since the home is somewhat toxic, even demolition and removal can be a problem.
Finding meth labs in parks has always been a problem since landlords have no right of access to tenant homes. In the past, labs that have been discovered usually are large and the odor is obvious outside of the home, not to mention the condition of residents and visitors to the home.
One Pot meth labs are going to make detection even more difficult in the future.
October 30, 2011
New Articles Posted. I have just posted three new articles on the MHC Articles page. They are the top three. Click on that page on the left.
October 29, 2011
SAFE Act. This is a federal law enacted in 2008, but the enforcement of which has been delayed until now. The SAFE Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators. Arizona, pursuant to the SAFE Act adopted such a law providing for the regulation of "Loan Originators". This law begins at ARS § 6-991.
The definition of "Loan Originator" under ARS § 6-991 excludes a person who makes "five or fewer mortgage loans per calendar year".
The federal SAFE Act requires State laws to meet minimum requirements created by the federal law. But it prohibits State laws from frustrating the objectives of the federal law. Since the Arizona law excluding persons making five or fewer mortgage loans per calendar year has no counterpart in the federal SAFE Act, the question arises whether such persons need to be licensed as "Loan Originators" under the federal law despite the exclusion under the Arizona Act.
According to the HUD website, Section 1503(3)(A)(i) of the SAFE Act defines "loan originator" as "an individual who (I) takes a residential mortgage loan application; and (II) offers or negotiates terms of a residential mortgage loan for compensation or gain." Section 1503(3)(B), entitled "Other Definitions Relating to Loan Originator" provides "For purposes of this subsection, an individual `assists a consumer in obtaining or applying to obtain a residential mortgage loan' by, among other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan."
The HUD website goes on to make it clear that these terms will be broadly construed.
Application to MH Financing. There is no doubt that the SAFE Act and the Arizona law apply to financing of mobile homes by parks selling them to prospective tenants. it applies to the clear sale with the purchase price being financed with an installment sale agreement and the title being transferred subject to a lien in favor of the seller. But it also applies to "rent to owns" and leases with options to purchase as well as sales with an agreement to pay with title being transferred when payments are completed. All of these things probably qualify as mortgage loans under the SAFE Act and under the Arizona law.
Who are "Loan Originators"? Anyone who takes a residential mortgage loan application and anyone who offers or negotiates terms of a residential mortgage loan "for compensation or gain". This too is a broad definition. It seems to cover even MHC managers who show a home under their dealership sales license and then give a prospective buyer a loan application either for a commercial lender or for the park itself to consider in determining whether to finance the home. Some park operators are taking the position that if their managers are not specially compensated for these activities but that it is just a part of their normal job, they are not doing this "for compensation or gain" and thus are not covered. That is a dangerous position to take since their normal pay may be considered sufficient compensation to trigger coverage by these laws.
The Arizona Five or Fewer Exemption. This appears inconsistent with the federal act.
How to Comply. This law is so filled with ambiguous, vague terms that it is impossible to figure out how to comply and what is really excluded.
1. The Safest Method. Everyone in any way involved with originating financing of mobile homes including park managers who merely accept applications gets licensed with the State even if the park places fewer than five mortgage loans per calendar year. Though the safest route, it also the most difficult. Loan Originators would have to complete 20 hours of pre-licensing education; complete 8 hours of continuing education to renew their licenses; have had a background check completed prior to licensure; complete a test on Federal and State laws/rules; and would need to be licensed by the Arizona Department of Financial Institutions. Licenses must be renewed every year. For detailed information look here: http://www.azdfi.gov/Licensing/NMLSLO/nmlslo.html
2. Less Safe Methods. Have a central office handle everything related to mobile home financing and have all prospective buyers of homes from the park referred to that central location for all information and assistance in conjunction with financing of homes. Then have a person or persons at that location licensed with the State as a Loan Originator. Safeguards must be in place to ensure that park managers are not involved in the financing of homes in any way.
3. Dangerous But Arguably Legal Positions. (a) Ensure that the park finances no more than five homes per year. Note that a multi park operator will have an even more difficult time arguing that each park is entitled to finance up to five per year if the controlling entity finances more than five per year in all of its parks in the aggregate. (b) Do not pay any special compensation including bonuses to park employees taking applications, etc in conjunction with home financing, and argue they are not receiving compensation or gain for these activities. I cannot emphasize too strongly how risky this is given the broad interpretations being given to these laws.
4. Suicidally Dangerous Positions. Ignore the law assuming there will be no enforcement. Anyone seeing how huge and anti-business the federal government has become in recent years should know that its only a matter of time until the bureaucrats get around to our industry.
I strongly recommend that any park or park operator financing more than five homes per calendar year get someone licensed as a "Loan Originator" with the State as soon as possible. Again, see this link for more information: http://www.azdfi.gov/Licensing/NMLSLO/nmlslo.html Be sure that person does everything related to the financing including taking the application and dealing with the prospective buyer/borrower. If possible, even parks with fewer than five per year should do the same.
Here is a link to the HUD website giving more information on this: http://www.hud.gov/offices/hsg/ramh/safe/cmsl.cfm
Terry Dowdall, a California MHC attorney has an exhaustive article on the SAFE Act up on his website. There are things in it I am not in full agreement with, especially the part on the "Attorney Exemption" but it is worthwhile reading. He has done a lot of work on trying to understand and explain this terrible law. Here is the link: http://www.dowdalllaw.com/PARK_WATCH_MMXI-08-09-SAFE_ACT-DODD_REQTS-FAA_ARBx.pdf
HUD Fair Housing Grant to Arizona Fair Housing Center. Eariler this month HUD made a $320,000 grant to the AFHC to underwrite its assistence to people who thing they have been the victime of fair housing discrimination. The AFHC is a fair housing advocacy group that does testing of apartment complexes and MHC's and files complaints with the AG's Office claiming discrimination. In the past they have insisted on being paid damages by the landlord as a condition to agreeing to the charges being dropped. Some of its complaints have been hyper technical and asinine.
I guess we can expect a lot more testing throughout the State. Here is a link to HUD's announcement. http://portal.hud.gov/hudportal/HUD?src=/states/arizona/news/HUDNo.2011-10-07
October 28, 2011
Manager Training. While MHCA training class schedules won't be posted for a while, I am scheduled to conduct a manager training class on January 27, 2012 in Glendale, Arizona. I suggest that any new managers take this class as their first training program as well as any other managers who have not yet been to one of my classes.
My classes cover the many landlord tenant laws that apply to MHC's and also cover Fair Housing laws. I don't know if I will be doing any other Maricopa County classes next year. In 2011 I only did one class in Maricopa County so if you are a Phoenix area manager who will need training in 2012 you may want to sign up for this class. Call MHCA at (480) 345-4202 or (800) 351-3350 to register.
New park managers are required to have six hours of qualifying training within six months of being hired. All managers are required to take six additional hours every two years thereafter. MHCA training is qualifying.
October 27, 2011
Sunset Review--FBLS Department. The sunset review hearing took place on October 20, 2011. Here is a link to the video feed on this. It is really pathetic but is a good example of your government in action. http://azleg.granicus.com/MediaPlayer.php?view_id=13&clip_id=9501
The defense of the money being taken from the fund is laughable. But look at the testimony and judge for yourself. If I can figure out the utterly bewildered testimony of the Director of the Department, it looks like they intend to take even more money.
What is remarkable is that with no opposing public testimony (no surprise since the hearing wasn't publicized), the legislative committee only recommended continuing the Department for two years. The norm is ten years. I suppose that means there will be another audit and review in two years. Sounds sort of like probation to me.
October 21, 2011
Sunset Review--FBLS Department. I learned long ago that once government agencies are created, they almost never can be killed. I was part of an effort to eliminate the old U. S. Post Office Department as a young lawyer in 1970. The Department was abolished as a cabinet level agency but recreated as the U. S. Postal Service. Then it was wrecked by 40 years of lousy management and political interference by both Congress and the executive branch, and now it can barely deliver the mail.
Anyway, in Arizona, theoretically agencies are subject to a review every so often to see if they should be continued or, if they have outlived their usefulness or simply serve no purpose, whetner they should be abolished. The Fire, Building and Life Safety Department is up for review this year. That was one of the reasons for the Auditor General's Report that was released recently and that I wrote about on October 3. That report confirmed the continued misappropriation of money from the Relocation Fund that no one seems to care about.
Standard procedure calls for the audit report to be submitted along with an agency response. Then a legislative committee is assigned the task of actually conducting the review that will lead to a decision whether to eliminate or continue the agency. That is called a Committee of Reference (COR). Assuming normal scheduling, the COR staff is now gathering materials for the hearing that will be set. Hearings are normally scheduled in October but I cannot find that one has been set in this case.
Many agencies will post notices on their web sites advising when the hearing is set because the public can appear and testify. But don't expect this Department to do that.
If you are interested in appearing at the sunset review hearing on the FBLSD you should periodically check the legislative calendar that shows this: http://www.azleg.gov/InterimCommittees.asp
I have mixed feelings on this. If it weren't for the unconscionable ripping off of the Relocation Fund, and the steadfast refusal to own up to how wrong it was or to express any sort of remorse or regret, I would favor continuation of the agency. Certain elements are worthwhile, principally the OMH and the Licensing function. Certain elements are worthless and there remains featherbedding in the level of staffing.
Alternatives exist such as transferring OMH and Licensing to other agencies and killing off the rest and that does have a lot of short term appeal. But I remember the time before this Department was created and those functions were in other agencies. It was awful, and as bad as FBLSD is, it is better than what went before.
Its just too bad they can't get some decent management to take control.
MHCA Tucson Conference. This went well and I think most attendees found it worthwhile. I hope no one was too offended by my many insulting remarks about Tucson and Pima County. If any one is so intolerant and thin skinned as to have been offended, I am sorry you have no sense of humor.
That's my version of an apology.
Color Coded Forms. My partner Scott Williams has come up with a good and simple way to avoid having managers or staff use the wrong forms to document tenancies.
MHCA color codes its form books. Blue for MHP space rental forms; green for park owned home rentals; orange for RV space rentals. In those parks with two or more of these, why not use the same codes on the rental forms and the file folders they are kept in. Print MHP space rental forms on light blue paper, park owned home rental forms on light green paper, RV space rental forms on light orange, and so forth. Keep them respectively in blue, green and orange file folders. That should reduce the chances of using the wrong kind of form for a tenant.
On the subject of forms, when you update a form, put a revision date in small print on the bottom and throw obsolete versions away. Paper is cheap and, contrary to what some may think, there are plenty of trees to grind up for new paper.
October 16, 2011
Boring Blog. This Blog has gotten a bit boring in the last few months. I guess I think folks don't want to see me rant. But bitching and moaning is probably better that being boring. So I intend to gripe more often.
Occupy Wall Street. I was watching a live feed of people "occupying" Wall Street the other day. There was an open mike and anyone who wanted could come up and enlighten the viewers as to why he was there. The movement has spread all over and there is a You Tube video on the Occupy Portland event where one of the leaders explains their communication methods. It is also quite enlightening. Especially the twinkles. http://www.youtube.com/watch?feature=player_embedded&v=qaVvzTyMcls#!
Abandonments. These never seem to diminish. We continue to get them in in large numbers from all around the state. More and more non-client parks have discovered we handle these in all counties so more cases get referred in from parks that ate new to us. For the cost of a month or two rent, we can get the problem resolved with the home either getting titled to the park or transferred to someone who catches up the past due rent and keeps it current.
Repossessions. This is a fairly new line of work for me. Similar to abandonments, people in large numbers are walking away from their homes and the mortgages they owe on them. This requires lienholders to repossess them. Often the repossession is simple and can be completed by filing paperwork with the MVD. But sometimes a court action for repossession is needed (like where the buyer refuses to move out but also refuses to pay). In cases where the delinquent buyer stays in the home and his landlord does not evict him, a court repossession action is necessary.
We do these in all counties, though we try not to do them in Maricopa County since we represent so many local parks and since there are frequent conflicts between parks and lienholders over rent.
October 15, 2011
New Mobile Home Sales Escrow Law. A law was enacted during the last legislative session that does not become effective until July 1, 2012. It deals with handling mobile home sales through escrow and is complicated. Due to the complexities and the significant changes it makes to current sales closing practices, the industry was given a year to prepare for implementing it.
ARS § 41-2180 is the new statute. It is part of the dealer licensing laws that are administered by the Department of Fire, Building and Life Safety (Department). You can read it here: http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/41/02180.htm&Title=41&DocType=ARS
Subsection A requires licensed manufactured home Dealers and Brokers to establish independent escrow accounts with licensed independent financial institutions or escrow agents to handle closings. This applies to sales of new manufactured homes and sales of used homes where the purchase price is $50,000 or more.
Subsection D allows licensed Dealers and Brokers to continue closing sales of used homes for less than $50,000 through their trust and escrow accounts the same as they have done previously. It also mandates account audits every two years. This subsection allows a purchaser of a used home for under $50,000 to request the transaction be closed through an escrow agent, and also requires that the Dealer or Broker disclose to the Purchaser in writing that he has the right to require use of an escrow agent, and that if he fails to do so, the sale will close through the Dealer or Broker’s trust and escrow account.
Subsection C creates an exception to the requirements of Subsection A for mobile home parks meeting certain conditions. This exception is for new homes for parks with Dealer or Broker licenses. The exception does not apply for used over $50,000 homes and parks will still need to close these through independent escrow agents and their purchase contracts for those transactions will need to contain escrow instructions. Under $50,000 used homes can be closed through Dealer or Broker trust and escrow accounts unless buyers request third party escrows.
Mobile home parks must meet certain conditions. The statute exempts parks with Dealer or Broker licenses and parks which share common control with separate licensed entities. The Office of Manufactured Housing (OMH) will confirm that the dealership and the park share common control. I have asked OMH if they have developed criteria for evaluating "common control" but have not received a response.
This exception is limited to homes sold in the park.
A $100,000 bond is required to take advantage of the exception. But rather than have every single park put up a $100,000 bond, the statute allows the Dealer or Broker to post it and have it apply to all parks sharing common control. So, for example, an operator with one dealership covering three parks only needs to post a single bond, not three.
All dealers, brokers and parks with dealerships need to get their purchase contract forms revised to contain the escrow provisions required by this new statute. They need to make arrangements with independent escrow agents to close sales they produce when the sale needs to be closed through an independent escrow agent. And they need to make sure all of their sales personnel become acquainted with the requirements of this law.
This all needs to be done before July 1, 2012 when the new law becomes effective.
October 12, 2011
Rights of Frist Refusal to Buy MH's. Many parks really hate to see mobile homes being pulled out because empty spaces look bad. Many other parks hate to see them leave because they are of a size that is no longer available and nothing on the market today will fit on the space without violating setback requirements.
On the other hand, some parks are thrilled to see older homes leave because it gives them the opportunity to get new homes into the park and freshens and modernizes the appearance of the place.
To minimize the risk of having homes leave, a number of parks include a provision in their rental agreements entitled "Right of First Refusal". What this says is that if the home is to be sold to someone who intends to move it out of the park, the tenant must give the landlord a 72 hour opportunity to match the purchase offer and if the landlord elects to do so, the home must be sold to the park. The price is the same as what the outside seller offered the tenant. If the landlord does not agree to buy the unit for that price within 72 hours the tenant is free to sell it at or above that price to the third party. But if he decides to sell it cheaper he must again give the park a chance to match the lower offer.
The standard right of first refusal does not apply if the home is to be sold to someone intending to become a tenant and keep the home in the park. The reason for that is to avoid situations where it could be used by a landlord to prevent protected minorities from moving in and violating fair housing laws.
Rights of first refusal create a "win-win" situation for both landlords and tenants.
Advantages for Landlords. This is a way for a landlord to ensure that move-outs are kept to a minimum. The park winds up purchasing the home, fixes it up and resells it on site. That gets a new rent paying tenant in more quickly and avoids the lot being vacant.
Advantages for Tenants. The tenant will lose nothing by selling it to the park at the third party price. If the home was sold through a dealer or broker, the landlord will pay the same price that the third party buyer would have that will include the dealer or broker's commission. So the dealer or broker does not get hurt. Of course the third party buyer will be disappointed but the dealer or broker gets a chance to sell him another home somewhere and make a second commission. In many parks with these first refusal rights, tenants will come into the office and tell the manager they are going to list the home for sale but before doing so will ask if the park has any interest in buying it. Many parks will negotiate a sale right then. This gets the tenant a good price and he is able to get the home sold much more quickly.
Legality. Sometimes it is claimed these rights are "illegal". That is wrong. The MHP LTA at ARS § 33-1413 (C) states: "The rental agreement may include conditions not prohibited by this chapter or other rule of law governing the rights and obligations of the parties." There isn't anything anywhere else that prevents or restricts these so they are valid.
Problems. Most problems result from misunderstandings or shyster dealers or both.
1. Tenants may forget about the right and list and sell the home without offering the park the chance to buy it. Once the home sells and the deal closes there is nothing that can be done to undo it. But in doing this the tenant is in violation of his rental agreement and can be sued for breach of contract and subjected to a judgment for damages incurred by the landlord as a result of the home selling and leaving the park. Those damages could be significant. Once in awhile a tenant will phony up an offer for more that was really offered and present that to the park. That is fraud and a tenant doing that could be sued for damages and maybe even prosecuted for fraud.
2. Dealers may tell tenants to ignore the right--that it means nothing. They are wrong and are opening the tenant to liability for breach of contract damages.
3. When the right is violated and the home sells, the park must allow it to be removed. The buyer and now owner of the home was not a party to the rental agreement that created the right. So while the buyer gets to remove the home the now ex-tenant can be sued for selling the home in violation of it.
4. Sometimes a dealer encourages tenants to list and sell homes that will be removed, and there are a few dealers that buy the homes themselves and pull them out. A dealer or anyone else buying a home for removal knowing about the right of first refusal can also be sued for damages for bringing about a tenant's breach of contract. Recently a few dealers have been sued by parks that obtained temporary restraining orders preventing the homes from leaving. There are one or two sleazy dealers that engage in this kind of conduct and once in awhile a park will decide it has had enough and will sue to stop it. The key here is to be able to prove the dealer knew about the right when the dealer will lie and deny any such knowledge.
Rights of first refusal are a good thing to include in rental agreements. But a park including them needs to be able to explain to suspicious tenants that there is no way they can be hurt by them since they are guaranteed the price they want.
October 7, 2011
Tenant Wrongfully Denying Landlord Access Subject to Immediate Eviction. What happens when a park landlord wants to get into the tenant's back yard to install or repair a utility meter? Or to read the meter? Or to verity there are unapproved pets there? Or for any other lawful purpose? ARS §33-1484 (A) states:
If the tenant refuses to allow lawful access, the landlord may terminate the rental agreement and may recover actual damages.
There is no cure period stated in the statute and no specific requirement for any kind of notice of termination to be given. The statute just says that when a tenant does this the tenancy can be terminated. Absent a cure period, that means the termination is immediate.
In a case that started out a year ago, a tenant refused to let a landlord into the back yard to install a water meter. The gate was locked and the tenant had the key. The park served a notice of immediate termination and immediately filed to evict. The tenant hired a lawyer. After a sharply contested trial the park was awarded a judgment evicting the tenant. The tenant appealed. Today the Superior Court appeal decision was released upholding the eviction. The seven page opinion is a good analysis of how ARS § 33-1484 (A) works.
Tenants denying landlords lawful access to the lot are taking a huge risk that they will be immediately evicted for denying access.
Here is a link to the Superior Court decision. http://www.courtminutes.maricopa.gov/docs/Lower%20Court/102011/m4925578.pdf
October 3, 2011
FBLSD Misuse of Relocation Fund Continues.
A May 26, 2009 report was issued by the Arizona Comptroller General GAO covering the Arizona Department of Fire, Building and Life Safety's handling of the Mobile Home Relocation Fund during the period July 1, 2008 through April 17, 2009. That report showed that the Department spent $110,000 on direct costs of relocations of mobile homes during that period but charged an additional $900,000--plus, on indirect costs.
The Report stated:
In our opinion, the Department is charging excessive, unsupported expenses as “direct and indirect” costs for processing relocation applications. From July 1, 2008 to April 17, 2009, the Department processed 13 mobile home abandonments costing $17,500 and 14 relocations costing $92,714 for total actual tenant relocation costs of $110,214. During that same time frame, the Department allocated over $900,000 as costs of processing applications and support of the Department’s hearing function.
AAMHO supported the Department's expenditures in a letter quoted in the report, and the Department actually defended this level of spending and showed no remorse.
In contrast, in the period July 1, 1994 through June 30, 1999, the total disbursements by the Department from the Relocation Fund came to $239,402. See table 3 (page 36) of the 1999 Auditor General's Report on the Fund here: http://www.azauditor.gov/Reports/State_Agencies/Agencies/Building%20and%20Fire%20Safety,%20Department%20of/Performance/99-16/99-16.pdf.
Changes Since Then. After that report was released the Department let one of its Assistant Directors go. In addition the Director at the time the reported abuses took place was "reassigned" and became State Fire Marshall, a position that reports to the position of Director. Finally a new Director was appointed.
New Audit Report. A new audit was recently concluded by the Office of the Auditor General of the Department in early 2011. The report of this audit was released on the web last Friday. Essentially it shows that the Department has done nothing to correct past abuses and that widespread looting of the Relocation Fund continues to take place. You can read the report here, and I strongly recommend that you do: http://www.azauditor.gov/Reports/State_Agencies/Agencies/Building_and_Fire_Safety,_Department_of/Performance/11-13/11-13Report.pdf
In reading it you will see the following:
Page 26: The Department "likely" used fund monies to support nonfund activities. In other words, the law establishing the fund sharply limits what money in it can be used for. Basically it is to give to MHC tenants who move their homes out of parks due to change in use or large rent increases. It can also be used to cover expenses involved with the ALJ function and complaints that park managers do not have current training certificates. Those should never be more than nominal sums.
But the Auditor General thinks it is "likely" the Department has been using the money for other purposes. It says "likely" since the Department does not keep adequate records on fund use for an auditor to figure out what the money is being used for. In the words of the audit, "the Department did not sufficiently track employees' time or other resources used to carry out fund activities".
Page 27 & 28: Despite its failure to keep adequate records, some expenditures the fund paid for appear incorrect or excessive.
"Personnel cost allocations appear excessive". The Department appears to have paid for a large percentage of its payroll out of the fund despite the fact that they did almost nothing relating to fund purposes. "the personnel costs allocated to the Fund do not appear reflective of the actual time department staff spent on authorized activities".
"Other expenditures appear questionable". On page 28 there is a table showing that the workload of the Department related to what the Fund's purposes are was negligible compared with Department operations as a whole. Yet, for example, it jacked up the annual portion of its office rent charged the Fund from $44,377 in fiscal year 2009 (the year of the last audit that blew the whistle on this mess) to $122,322 in fiscal year 2010. The Department paid for $6,000 in out of state airline travel for employees out of the Fund despite there being no need whatsoever for any out of state travel related to the Fund.
Table 2 on page 27 has some interesting figures.
In fiscal year 2009 the Fund paid out $118,864 in benefits to tenants. But the Department took an additional $1,195,404 for itself to supposedly cover the cost of its fund related workload.
In fiscal year 2010, the Fund paid out $42,567 in bebefits. The Department charged the Fund an additional $857,352 for its work.
In fiscal year 2011, the Fund paid out $187,993 (and I don't really believe that number) while charging an additional $670,372 for its work.
The 2009 figures were not on the current Director's watch but the 2010 and 2011 figures were. Moreover, this unbelievable ripoff of the Fund continued despite the existence of the May 26, 2009 report covering the improper use of the Fund discovered at that time.
Page 29 of the new report says its findings "are consistent" with the 2009 report "which found that the Department was charging excessive unsupported costs to the Fund for processing relocation applications". The last sentence of that paragraph is perhaps the most illuminating: "as of June 2011, the Department was in the process of implementing some of GAO's recommendations".
So, more than two years after the first report blowing the whistle on this systemic looting of the Fund, nothing meaningful had been done to stop it. But the Department was "in the process" of implementing some of the recommendations in it.
The Department has been sucking off of this Fund for several years in an effort to protect the jobs of its employees in the face of reductions in the appropriations it receives from the Legislature due to the State budget problems. Faced with the choice of laying people off or making inappropriate withdrawals from this trust fund entrusted to its care, it chose the latter.
Towards the bottom of page 28, the Report notes that the result of this conduct is to force MHC tenants to continue paying taxes on their homes that otherwise would have stopped coming due once the Fund balance hit a statutory ceiling.
Among other recommendations, the Report suggests the Department consult with the Attorney General's Office on whether to reimburse the Fund for the money it improperly took.
Don't hold your breath waiting for that to happen.
The 2009 report obviously had no effect on this use of the Fund and it is unlikely that the new report will have any either. The only way to stop it in the future in my view is to designate it as a trust fund and remove it from this agency. AAMHO should sue the State for a return of the money impropertly taken and needs to get the people responsible under oath and answering questions about how all of this happened.
To be fair, the Department filed a letter stating its position on this audit. It certainly makes for entertaining reading and everyone interested in this subject needs to read it. http://www.azauditor.gov/Reports/State_Agencies/Agencies/Building_and_Fire_Safety,_Department_of/Performance/11-13/11-13Response.pdf
September 30, 2011
Park Owned Home Maintenance. I have been covering a lot of apartment evictions recently for other attorneys who have calendar conflicts. One thing I am struck by is the large number ot tenants complaining about the horrible living conditions in their units, many with photos to back them up. Many of these are false claims intended to somehow justify not paying rent (that is never a successful defense). But many others appear to me to be truthful (but still not a defense to non payment of rent).
Landlords renting dwelling units have a duty to maintain and keep in repair the basic structure and the utility systems (plumbing, sewer, HVAC) in the unit. They also have a duty to ensure the place is in habitable condition when rented. Landlords renting dwelling units are required to conduct a walk through of the unit before the tenant moves in and to complete a move in/move out form showing the condition of the unit at that time (form in the MHCA Green Book).
When something in the unit fails or stops working that the landlord is responsible for (such as an airconditioner or a roof leak) the landlord is required to promptly get it fixed. Not when it is convenient for the landlord, but as quickly as possible. If a landlord ignores this responsibility the law allows the tenant to serve a demand for repairs and if it is not complied with, to terminate the lease and/or sue for damages.
Landlords renting park owned homes need to ensure they are in good shape before renting them. They need to do the pre-move in inspection with the tenant, and they need to be aware that keeping the unit in compliance with codes and keeping essential utility systems operating is the landlord's responsibility.
Bedbugs. The new bedbug law has brought about a lot of confusion. Landlords renting dwelling units other than single family residences are covered by this law. While a park owned mobile home should qualify as a single family residence thus being exempt from the law, that is not a certainty. Thus parks renting homes would be well advised to comply with the law.
About the only requirements are to not knowingly rent a unit that has bedbugs and to provide bedbug educational materials to tenants. Here is a link to our firm website page showing the information to be provided to tenants: http://wzplegal.com/content/bed-bug-information-sheet
We also recommend a lease addendum dealing with bedbugs. Here is a link to such an addendum: http://wzplegal.com/content/bed-bug-addendum
We have seen a rash of cases where tenants are claiming bedbug infestations after they move in and blaming it on the landlord for renting a unit with bedbugs. Such a claim may have merit if made immediately after move in. But when it comes in several months after a tenant moves in, it is almost certainly because the tenant brought the bedbugs in. The problem is the tenant's to resolve in that case.
If a tenant moves out after complaining of bedbugs, the landlord needs to have the unit inspected by a bedbug pest control expert and if an infestation is found, the unit needs to be treated before another tenant is allowed to move in.
Late Fees From Lienholders. YOU CANNOT CHARGE THEM!!! This is one of the things I get so tired of saying. Late fees can only be charged when there is a rental agreement providing for them. When a lienholder repossesses a unit there is no rental agreement with him. He is responsible for rent and utilities because a statute, ARS § 33-1478 (A) says he is. The statute makes no mention of late fees and managers trying to charge them are simply demonstrating their ignorance of the law.
September 23, 2011
Evicted Tenants Coming Back. This is a source of considerable confusion. A landlord evicts the tenant by going to court and getting an eviction judgment after first serving a termination notice. The tenant refuses to move out. So the landlord has the court issue a writ of restitution and the Constable then comes out, removes the tenant and posts a notice on the unit saying the tenant has been evicted.
What happens when the tenant comes back after that?
A few years ago the law was changed to address this situation. ARS § 12-1178 (E) was added to the eviction statutes. This says:
E. If the defendant is found guilty of forcible entry and detainer or forcible detainer, the court shall give the defendant notice that a defendant who is lawfully served with a writ of restitution and who remains in or returns to the dwelling unit or remains on or returns to the mobile home space or the recreational vehicle space without the express permission of the owner of the property or the person with lawful control of the property commits criminal trespass in the third degree pursuant to section 13-1502.
What this says and what it means is that if the evicted tenant goes back into his apartment or re-enters the mobile home or RV space from which he was evicted, he can be arrested for criminal trespass unless he first gets permission from the landlord to enter.
What this does not say is that the evicted tenant can be arrested for coming back into the apartment complex or the MHC or RV Park if he does not go back into the unit or space from which he was evicted. If he is visiting other residents of the community, he can do so as long as the other resident has invited him. He can even stay overnight or for a few days with the other resident if the other resident wants him there. What he can not do is break into the apartment or the mobile home or RV from which he was removed by the Constable.
Other laws require landlords to allow evicted tenants to come back in for a period of time to remove their belongings from the premises and even to remove the RV or mobile home from its space provided certain conditions are met. So on request a landlord needs to agree to re-entry for limited periods to retrieve belongings. But if an evicted tenant simply comes back into the unit without landlord permission he is subject to arrest.
Sometimes an evicted tenant will move in with another resident of the community without landlord approval. He is not subject to arrest for that. But the other resident becomes subject to being evicted for allowing an unapproved resident to move in. He can be given a 10 day noncompliance notice if an apartment or park owned home is involved, or a 14/30 noncompliance notice if it is a MH or long term RV space rental. If the other tenant does not get the evicted tenant out of his home within the cure period an eviction action can be filed against him.
If an evicted tenant comes back into the community without the invitation of any resident but does not go back into his unit, he is not subject to arrest under the above statute for that entry. But the police can be called if he refuses to leave and asked to "trespass" him since he has no lawful right to be there. They should remove him and advise him that if he returns he will then be arrested.
The key here is that the evicted tenant is subject to arrest for re-entry under the above statute only if (1) he has been removed by a Constable acting under a writ of restitution following a court eviction; and (2) he goes back into the unit from which he was removed without landlord permission after that.
September 21, 2011
Unusual MH Liens. Occasionally a park will try to get a title transferred after buying or accepting surrender of a mobile home and find an unwritten lien prevents transfer. Usually it is one of two kinds of liens.
Restitution Lien. When someone gets convicted of a crime he will often be ordered to make restitution to the victim of the crime. The law imposes a "restitution lien" against all of his property securing payment. That means the property cannot be transferred without accounting to the victim of the crime for the proceeds. Among other things the MVD is notified of the lien and notes it in its records. That prevents the convicted person from transferring motor vehicles and MH's without getting the lien released.
When a park gets title to the MH and finds a restitution lien, it needs to get it released. If the park buys the home it should never pay the seller until it verifies that title can be transferred. The purchase price may need to be paid to the victim of the crime. If the park gets the home by surrender of title or a landlord lien sale, it still needs to get the lien released before title can be transferred.
Getting a lien released entails contacting the local County attorney. Depending on what county is involved it may also entail getting an order releasing the lien from the Superior Court.
Child Support Lien. When a deadbeat parent fails to pay child support and the custodial parent starts getting state aid, the Arizona DES may get a child support lien against all the property of the deadbeat parent. That prevents the deadbeat parent from selling property without reimbursing DES for child support payments made by the state. A park obtaining title to a home subject to a child support lien will need to get a lien release from DES before title can be transferred. That is another reason to ensure title can be transferred before paying for a home.
Getting lien releases from DES is tough since they are short staffed and confused. But it is necessary before a park can get title to a home.
We handle both kinds of situations on a fairly frequent basis since we see a lot of these in the landlord lien sales we process.
Note that these liens never show up on the title. It is always necessary to check with the MVD to see if they exist.
September 15, 2011
Bedbugs. A new law requires landlords of dwelling units to advise tenants of certain bedbug matters. While it applies to dwelling unit rentals, it excludes single family homes. Arguably park owned home rentals are single family homes and are thus excluded. But to be safe we recommend that park owned home rental agreements have an addendum dealing with bedbugs. Our firm has publilshed a Bedbug Addendum to Rental Agreement. I rcommend that parks renting homes use this. It is not in the MHCA Green Book yet but will be included in the next update. Here is a link to the Addendum: http://wzplegal.com/content/bed-bug-addendum
Maricopa County Court Filing Fees. This morning it was announced that Justice Court filing fees are being increased by $3 per filing. That will make the filing fee for an eviction case in Maricopa County increase from $55 to $58. When I started filing Justice Court cases in 1977 the fee was $7. That says quite a bit about inflation and the skyrocketing cost of government. But of course the increase in quality of government service makes it all worthwhile.
Repossessions. We are handling repossessions for more and more lenders who finance homes wnen the buyers of those homes stop paying on them. Many of these homes are in rental parks. I have avoided this in the past since lienholders and parks often get into disputes over payment of rent once the home is abandoned and repossessed. Now, when we take these cases, we try to ensure that the lienholder knows about the obligation to pay space rent after the home is abandoned.
Parks may occasionally get calls from us asking about the rent status on a tenant who is behind on payments to a lienholder. That is because if rent is behind the park should be evicting the tenant and then promptly notifying the lienholder. Not acting promptly may cost the park money since the lienholder is responsible only for 60 days rent due at the time of abandonment. Letting more than that accrue is going to cost the park the difference so the park should be acting promptly when rent becomes delinquent.
September 12, 2011
Yuma Training. The attendance last Friday was good for Yuma. One thing that surprised me was the high sales volume of MHCA publications. It seems a lot of parks don't know these are available. They are fairly expensive for non MHCA members but relatively inexpensive for members. While MHCA publishes many books (all of which I write and keep updated), some are really vitally important for day to day MHC or RV Park management.
Blue Book. This has all sorts of forms a MH Park needs to do business including rental agtreement and notice forms. Every form imaginable with instructions for use are included.
Orange Book. Similar to the Blue Book but designed for RV Parks.
Grey Book. This book explains how the many complicated laws covering MHC operations and landlord tenant relations work.
These are the critical books for parks to have. A MHC without a Blue Book and a Grey Book is flying blind.
The rest of the MHCA books are important as well, and they have a single price package deal to get all of them. Here is the link to the MHCA publications page: http://azmhca.com/store
Call MHCA to order them: (480) 345-4202 or (800) 351-3350.
September 7, 2011
Nothing is Free. This came to me in an e-mail today and I thought I would share it. I have slightly censored it. I hope you enjoy it. If you don't, well........
The folks who are getting the free s**t, don't like the folks who are paying for the free s**t,
Because the folks who are paying for the free s**t,
Can no longer afford to pay for both the free s**t and their own s**t,
The folks who are paying for the free s**t,
Want the free s**t to stop.
and the the folks who are getting the free s**t,
Want even more free s**t on top of the free s**t they are already getting!
Now... The people who are forcing the people who Pay for the free s**t,
Have told the people who are RECEIVING the free s**t,
That the people who are PAYING for the free s**t,
Are being mean, prejudiced, and racist.
So... the people who are GETTING the free s**t,
Have been convinced they need to hate the people who are paying for the free s**t,
By the people who are forcing some people to pay for their free s**t,
And giving them the free s**t in the first place.
We have let the free s**t giving go on for so long that there are
Now more people getting free s**t than paying for the free s**t.
Now understand this. All great democracies have committed financial suicide
somewhere between 200 and 250 years after being founded. The reason?
The voters figured out they could vote themselves money from the treasury by electing
people who promised to give them money from the treasury in exchange for electing them.
The United States officially became a Republic in 1776, 231 years ago. The number of people now
getting free s**t outnumbers the people paying for the free s**t. We have one chance to change that
in 2012. Failure to change that spells the end of the United States as we know it.
September 2, 2011
Rent Increase Notices. Its that time again. Parks with anniversary dates of January 1, the date annual rental agreements and statements of policy normally renew, need to get their rent increase notices out in September if they intend to increase rents or unbundle utilities effective January 1, 2012. The reason is that the MHP LTA requires a landlord to give a written notice at least 90 days in advance of the effective date of a rent increase of the amount of the increase. If the notice is sent by mail, then it must go out at least 95 days ahead of time since we add an extra five days to notice periods when notices are mailed out.
Unbundling utilities (i.e., starting to separately charge for utilities like water, sewer and trash removal that was previously not setarately charged but covered in base rent) qualifies as a rent increase.
Parks mailing rent increase notices to be effective on January 1, 2012 must have them postmarked no later than September 27, 2011 to be effective. And that is cutting it awfully close. To be safe they should go out by September 20.
Here are some tips on rent increase notices.
Don't Explain. Most parks are trying to keep increases minimal but are forced to impose some increase due to unavoidable expense increases. Examples are increases in utility costs, property tax increases (commercial tax rates are increasing in many areas where residential taxes are going down), insurance increases, employee health insurance premium increases, etc. It is tempting to try and explain to tenants that you are being forced by these expense increases to increase rents and that you don't really want to. Such explanations will fall on deaf ears. No matter what a landlord says a rent increase will be met with anger by many, and an attempted explanation will often be met with debate and disagreement. There is no requirement to give an explanation and to avoid inviting debate, it is best not to give one.
Keep It To a Minimum. In family parks working people are experiencing pay cuts, work furloughs, lay offs and inflationary expense increases with no increase in income. In Age 55+ parks it's even worse. There have been no Social Security cost of living increases in over two years while inflation has been eroding the purchasing power of Seniors' incomes. Those lucky enough to have some savings are getting virtually no income from them since interest rates on nearly all fixed income investments is about Zero. If they invested in the stock market, many Seniors have lost a lot of money in recent years. Many are barely making ends meet. The higher a rent increase the greater the likelihood tenants will be forced to move. This can result in homes being sold at distress prices to dealers or others who pull them out, or in abandonments. We are already seeing increases in both of these in Age 55+ parks and it has been going on for years in family parks.
RV Parks. In RV Parks with tenants on six month or longer rental agreements, the same applies except that the required notice period is 60, not 90 days. But for reasons of simplicity a 90 day notice can be given to RV space tenants at the same time and in the same manner as manufactured home space tenants and it will still be effective January 1, 2012.
MH Parks--The 10% Rule. Contrary to popular myth, nothing in the law prohibits a rent increase of more than 10%. In this economy it would probably be stupid and self defeating but it is not unlawful. However if there is a rent increase which together with all other increases during the preceding 12 months has the effect of increasing rents by more that 10% plus CPI (which is a bit over Zero) the landlord must give a separate notice of eligibility for Relocation Fund benefits in case the tenant chooses to relocate due to the increase. The MHCA Blue Book has the necessary forms for this. This does not apply to RV space tenants.
Serving Termination Notices. A trial was set for an eviction yesterday. I met the manager and asked how he had served the termination notise--the seven day notice form said it was by personal service and I asked him to confirm that was correct. He said "Yes", that he had taped it to the tenant's door.
This is a new manager who hasn't yet been through his initial park manager training so I don't fault him on this.
The MHP LTA and all the other residential type landlord tenant acts require that a tenant receive the termination notice before it is effective. it is received when personally handed to the tenant or someone of suitable age residing in the home. In the alternative, the law presumes receipt five days after mailing if mailed by Certified Mail.
So the only two ways to effectively serve a termination notice are to physically hand it to the tenant or a responsible resident, or to send it to the tenant by Certified Mail and add five days to the notice period.
Any other kind of service is ineffective. That includes taping it on the door, putting it under the door, putting it under a windshield wiper, sending it regular mail, giving it to a child, sending it by e-mail, hiring a skywriter, or sending it by carrier pigeon. None of these are effective.
Court rules covering evictions require the Judge to independently verify that the termination notice was hand delivered or sent by Certified Mail. If the Judge finds it was not, those rules require the case to be dismissed.
So if you are giving a notice that could result in eviction, either personally deliver it or send it by Certified Mail.
The case yesterday was dismissed.
August 27, 2011
Attorneys Handling Abandonments. In my August 13 post I made the offhand remark that I don't know of any other attorneys in the State that understand how to process abandonments. As with so many sweeping statements this one was not entirely correct. In fact a friend of mine who I have worked quite closely with in a variety of cases in Tucson does handle landlord lien sales and understands the mobile home abandonment process.
Jim Frisch whose firm is King & Frisch, PC in Tucson handles abandonment situations as well as run of the mill mobile home park landlord tenant matters. Here is his website that contains contact information. http://www.kingfrischlaw.com/home.html.
My apologies to Jim. If I think of any others I will post similar corrections but I have scoured my brain and can come up with no others.
Clamshells for MH Lockouts. When a MHC gets an eviction judgment and needs to have the Constable go out under a writ of restitution and remove the occupants of the home, it is then necessary to lock the home so the occupants cannot get back in. But since the landlord does not own the home, he cannot simply change the locks or install a hasp and seal with a padlock. The way to do the lockout is to place cuffs, or "clamshells" over the door knobs to the home.
I spoke at a training class for Constables and Civil Sheriff Deputies last Wednesday and was reminded again that many MHC managers do not have these lockout devices on hand when the Constable shows up. That means there can be no lockout and the Constable needs to make a return trip when the manager gets the clamshells. In Pima County the Constables carry clamshells with them and will give them to the landlord if they are reimbursed the cost. That is a great idea but it is only being done in Pima County. The Pima County Constables get them through Clark Security Products which apparently only sells wholesale. Maybe a big multi park operator could open an account there for all of its communities. In any event here is a link to its website. http://www.clarksecurity.com/
Others can get them at Amazon. Here is an Amazon link to a company that sells clamshells for both round doorknobs and lever knobs: http://www.amazon.com/s/ref=nb_sb_noss?url=me%3DA11C4BAMQ9957J&field-keywords=KEE-BLOK&x=11&y=23
Parks that need to have these on hand should have at least two of each kind, maybe more if their eviction rate is high. The cost will easily be offset by avoiding a return trip by a Constable that results in a second mileage fee being charged. Never use these except after an eviction and then only after a writ of restitution has been served by the Constable.
Bad Things Keep Happening. I continue to see higher than normal filings of fair housing complaints with the Attorney General's Office, and ALJ Complaints with the FBLS Department. Almost without exception these complaints in my view are frivolous and largely result from someone being offended by rude treatment or not getting his way when he wants special treatment. But they need to be defended and ordinarily the park should have a lawyer handling the case. There are too many ways to lose even a frivolous case if the landlord doesn't know what he is doing.
And of course as I have repeatedly pointed out on this Blog, abandonments keep coming in. We get a great many of these from clients and some other parks have recently been referring them to us as well. However there are a lot of parks out there, especially outside of the urban areas of the State. We have recently been building a mailing list and trying to do some outreach to let those parks know that there are ways to legitimately dispose of abandoned homes. We occasionally mail postcards out trying to connect with those parks. But other parks have also been getting them. For those of you who already know about that stuff I am sorry to be cluttering up your mailboxes.
Utility Costs. Municipalities are hurting for money. God forbid that they should actually lay anyone off. Its easier to just raise taxes and fees. This week I had the opportunity to review rate increases in the City of San Luis for water sewer and trash. At a City Council meeting held July 8, 2011 attended by the Mayor, Vice Mayor, four Councilmen, and thirteen employees plus a translator, the charges for these utilities were increased. This follows a report prepared by a private consulting firm. It was concluded that the rates had to go up because the City was in debt and additional cash flow in the Water Department was needed to help pay it.
The reason I was looking at this is that the new rate structure imposes considerably higher fees for commercial users than for residential users. Especially with water, since a MHC pays the commercial rate but can only separately charge tenants the residential single family rate of the utility provider, the effect of such rate structures is that the MHC landlord winds up paying more for water than he gets by separately metering and charging tenants for it.
This is not at all uncommon. It has been a fact of life in Phoenix for decades. But as the gap between residential and commercial rates widens and the volume of water included in the base residential rate remains high, MHC landlords are becoming more and more upside down in water charges.
It could be tempting to simply start including water in base rent and having sizeable base rent increases to cover that expense.
But what would make more sense would be to duplicate what the Long Term RV Act allows. That gives RV Park landlords the choice of separately metering and charging based on usage, or pro-rating the landlord's actual water bill each month among his occupied space tenants after deducting the part used for common areas. Of course that would take a legislative change and I don't see that happening any time soon.
Tenants probably think they are saving money under this disfunctional system but they are not. Their base rents are just a bit higher than they otherwise would be to cover the deficiency the landlord is experiencing each month dealing with his water expense.
August 20, 2011
Perversion of Handicapped Discrimination Laws. These laws were incorporated into the Fair Housing Act in 1988. Their purpose was to remove barriers stopping disabled people from living in mainstream residential communities. Physical barriers were to be removed by requiring housing providers to allow residents to make "reasonable modifications" to the premises to enable them to reside there. They were also addressed by provisions requiring new residential facilities opened or renovated after March of 1991 to incorporate certain "accessibility features" in their design.
Restrictive rules and policies interfering with the ability of disabled residents to live there were dealt with by provisions requiring housing providers to make "reasonable accommodations" to rules and policies. In other words, the law requires a landlord to make exceptions to rules interfering with the ability of disabled residents to live on the premises when reasonable.
Unfortunately, selfish narcissistic tenants often bend and pervert these laws to serve their own self centered purposes. Here are some recent examples.
Phony Assistive Animals. I have written on this before. Selfish people who want to have pets that violate the landlord's pet restrictions will lie and say they are disabled and need an assistive animal. They take advantage of the broad definition of "handicap" in the Fair Housing Act that includes psychological and emotional disorders and claim that their new pet is really an emotional support animal.
Sometimes they cloak their guilt and insecurity over telling such a reprehensible lie in aggression, becoming hostile in insisting that their "rights" be honored. Once in a while they get phony service dog credentials that are available on various web sites and present them as proof that their animal is a real assistive animal. I have written on this before on June 10 and July 23.
Phony Caregivers. The most common example of this is the tenant whose son or husband gets released from prison after serving time for a violent crime or sex offense. With this kind of background the newly released ex-prisoner can't find a place to live so the parent or spouse takes him in. Naturally they don't apply for residency approval because they know he won't pass a background check. So they just sneak him in.
When they get caught they will first lie and say he is just visiting and doesn't really live there. But when that no longer works they will learn from friends or maybe an internet search that they maigh be able to convince the landlord he is a"caregiver" needed to help the resident deal with a newly diagnosed "disability".
If the resident can document the existence of a disability (probably some sort of physical impairment needing physical assistance from a thrid party) and can document that the help of a third party is needed to cope with the daily tasks of life, a request for approval of a caregiver can be submitted asking that any rules such as age restrictions and occupancy limits be waived. A landlord in such a case may need to agree to a caregiver but need not if the particular request is unreasonable.
The landlord may be able to insist that the caregiver be non-residential, meaning he must live elsewhere but may come in frequently diring the day and even get special gate pass and parking privileges. Or a residential caregiver can be agreed to provided he pass a criminal background check which the relative who triggered the request cannot pass.
Rent Adjustments. Recently an AAMHO chapter tried to help a tenant convince a judge in an eviction case that fair housing laws required a landlord to allow a disabled tenant to make partial payments of rent each month since the tenant was broke and living on the dole from government and charitable agencies. This is such a blatant misstatement of the law that it is hard to bgelieve that an intelligent person could make the claim. I am especially surprised that AAMHO would take such a position because any requirement that a landlord give a tenant a free or reduced ride on rent will simply trigger higher rent increases for the remaining residents.
The reality is that while fair housing laws may occasionallky require a landlord to permit a third party personal guarantee to substitute for a good credit report for a disabled applicant whose income is restricted as a result of a disability, they don't require a landlord to cut rent or require him to accept partial payments from disabled residents.
Fair Housing Complaints. I am writing so much about fair housing these days because I am seeing a significant increase in the filing of fair housing complaints. Maybe this is due to poor understanding of these laws by landlords but I really think it is just a sign of the times.
Another thing I am seeing is an increase in the number of lawyers inexperienced in this area holding themselves out as qualified to handle such cases. Legal work is really down for landlord tenant attorneys these days--another sign of the times--and hungry lawyers are jumping at cases that a few years ago would have been referred out since they are unfamiliar with the law and issues involved in them. So be careful in selecting a lawyer if you get hit with a fair housing complaint.
August 13, 2011
Abandonments. I keep getting calls on this. If a home is vacant and rent is not being paid there is generally no need to evict since no one is living on the rental space. Yet inexperienced attorneys are telling parks to file evictions since they apparently don't know what else to do since the tenant's mobile home is still there. The only purpose an eviction normally serves in such cases it to generate a fee for the lawyer. Occasionally an eviction may be called for but those cases are rare.
In such cases the home should normally be treated as abandoned. You can read about the abandonment process on the Abandonments page (see link on left side of this page).
The abandonment process is tricky for the inexperienced. And I don't know of any other lawyers in the State that know how it works. It is for that reason that we handle them State wide. Our volume is such that we have developed internal software that allows us to track a case throughout the process and to ensure that proper notices go out at the appropriate times.
An abandonment typically results in a landlord lien sale if there is not a lienholder on the home willing to repossess and pay space rent. The landlord lien sale process takes around 72 days from the date the first notice goes out. If we do it the total cost is usually less than two months space rent. If you want more information call Chris at my office.
Yuma Seminar Hotels. I learned this week that September 9, the date of the MHCA Yuma Seminar is also the first day of duck hunting season, and that Yuma apparently is good duck hunting territory. The result I am told, is that Yuma hotels fill up quickly and rates are high. I quickly reserved a room and found that while many are booked, many more still have vacancies and some of these still have Summer rate specials. You can go to a travel website for quick information on rates and to make reservations. I use expedia at http://www.expedia.com/Hotel-Search. But I would suggest doing it promptly.
MHCA Tucson Conference. This will be held again this year on October 17-19. I will be conducting seminars on abandonments, repossessions by parks financing homes and third party lenders, and the medical marijuana mess. In addition we will be conducting another You Be The Judge session in what I hope is an even more interesting and entertaining format focusing on landlord tenant issues in parks. For information and to register contact MHCA at (480) 345-4202 or (800) 351-3350.
Using Contractors for Routine Maintenance and Repairs. A number of years ago I represented the Arizona Multihousing Assocaition in a case before the Arizona Court of Appeals involving whether the Registrar of Contractors can require landlords wanting to do routine repairs and maintenance on their own properties to use licensed contractors. The Registrar is supposed to regulate contractors, but in reality it devotes a lot of effort to promoting that industry. That case involved the Registrar trying to prosecute a landlord for doing his own routine repairs and not using a contractor.
In a published opinion the Court ruled that the Registrar cannot require the use of licensed contractors when a landlord wants to repair his own property. That does not, however prevent local code enforcement agencies from requiring licensed contractors to do certain work as a condition of issuing building permits and approving work following inspections.
The long and the short of it has been that a landlord has been able to do his own routine work except when a building permit is needed. Then he must do what the local code enforcement agency requires.
The Registrar hates that Court of Appeals decision and for several years has been trying to get the Legislature to in effect overrule it by amending the statutes in various ways to require landlords to use contractors for most or all of their repair work. It has not been successful thus far. The Registrar has also apparently embarked on another scheme to do an end run around that decision. Apparently it has been able to convince at least some local code enforcement agencies to require contractors to perform all of the work including such simple work as painting when a project requires a building permit.
There is no reason to require simple maintenance work or uncomplicated repairs like spot painting or tollet replacements to be done by licensed contractors. But times are tough and contractors need work. Apparently the Registrar stands ready to help its constituency of contractors by enforcing its laws in such a way as to throw them some extra work in spite of the Court of Appeals decision.
August 6, 2011
Mailbox Accommodation. When a park has centralized mailbox service (e.g., clusterboxes at the clubhouse) and a resident claims he cannot get to the clubhouse very easily due to a handicap, does the landlord need to agree to a curbside mailbox for him?
The Postal Service has regulations limiting roadside mailboxes in communities with centralized, clusterbox service. But the Postal Service will also agree to curbside mailbox delivery when a customer needs it because of a handicap. They are required to do this by the ADA. If the Postal Service agrees to a resident using a street side mailbox, then the question is whether the landlord needs to do so also.
This is to be treated as a reasonable accommodation request under Fair Housing laws. In other words, the park can require medical evidence of a disability if one is not apparent. When a disability is apparent or documented, and when the disability is shown to require curbside mail delivery for the resident to reasonably be able to get his mail, the park would need to agree to the erection of a curbside mailbox.
In this event the mailbox needs to be installed in compliance with Postal Service specifications which establish height limits and requirements for distance from the opening of the mailbox to the edge of the street. These are because the box needs to be able to be reached by a letter carrier from his vehicle without getting out (God forbid that one would need to walk anywhere). Also unless the local Post Office requires it, it is best not to set the column holding the mailbox in concrete. That represents a safety hazard to drivers if they should hit it.
On the Subject of Mailboxes. A recent news report concerned a set of clusterboxes at an apartment building. They were installed in strict compliance with Postal regulations and met all height requirements. The outgoing mail recepticle was at the top of the configuration. While within Postal specifications, it could not be reached by very short people. The local Post Office assigned an extremely short letter carrier to this route and she could not reach the top to get the outgoing mail.
So what did she and the Postal Service do? Nothing. They just left the mail there. It accumulated for several months until residents figured out it was not being collected and started complaining. By then some residents were being badgered by creditors for not paying their bills. Some wrote replacement checks for checks never received.
When it was discovered that the outgoing mail had been left to rot in the outgoing box, the Post Office sent someone out to get it. They would not give the mail back insisting that once it was mailed it had to be delivered. So the missing checks were delivered resulting in many doulble payments of bills.
The final reaction of the Postal Service was that while the outgoing box met all specifications, since the short letter carrier could not reach it, it would not be collected. There was nothing they could do.
What the article did not say was that the Postal labor contract with the Letter Carriers Union gives letter carriers a vested right in the routes they bid for and receive. The Postal Service simply could not take that carrier off that route because she was too short to do her job.
And they wonder why they're losing business and going broke.
Anyway, if installing boxes bear in mind that the outgoing mail should go on the bottom and the installation should be at the low range of Postal specifications to enable short people to collect and deliver the mail.
Underage People as Accommodations. Age 55 parks sometimes get requests they waive their age restrictions as reasonable accommodations under Fair Housing laws. Occasionally they need to do so. Here are two common situations.
Underage Disabled Dependent. If an over 55 couple has a disabled child dependent on them for support and unable to live independently, upon request and after verifying the child's disability, the landlord would normally need to waive its age restriction (and maybe its occupancy restriction as well) and allow the child to live with his parents. There is an Arizona Court of Appeals decision which made this ruling and sanctioned a housing provider for refusing to do so.
Caregiver. If a resident is disabled and has a genuine need for a residential caregiver (i.e., someone is needed there around the clock, not just to come in and help out during the day), a landlord would likewise need to allow an underage caregiver, again waiving age and possibly occupancy limit restrictions and let him move in. Here it would be important to sign a Caregiver's Addendum to Rental Agreement that provides the caregiver is not a tenant, has no independent right to use community facilities, and must leave when the need for a caregiver ends (e.g., disabled resident recovers or dies). A form appears in the MHCA Blue Book.
August 4, 2011
September Training. My last scheduled training class for 2011 is in September in Yuma. If you want to attend my training for six hours credit, you should get registered for this class. Contact MHCA to register. See the Seminars page for details.
Immigration. A city in Pennsylvania a few years ago adopted an ordinance penalizing landlords for "harboring" Illegals by failing to verify proof of lawful residence in the U.S. before renting to them. That law was enjoined by a federal district court and the injunction was upheld by the 3rd Circuit Court of Appeals. But the U.S. Supreme Court vacated that decision and ordered the case to be reheard. This week the injunction was dissolved and the ordinance can be enforced--for the time being.
Litigation over the validity of the ordinance will continue and it may ultimately be struck down. But for now this is a positive sign that it may be upheld and a good sign for people who are hoping that our own SB 1070 may some day be upheld and allowed to go into effect.
August 1, 2011
The Spending is Nuts. Here is a good video explaining where our economy is. A bit simple but it makes the point. http://www.youtube.com/watch?v=6AgL-I3PxHE
July 29, 2011
"Best Lawyers in Arizona". Lawyers are a sensitive bunch with frail egos that need continuous massaging. Since no one else likes us, we massage each other's egos. Our associations have important sounding awards that we give one another and then list on our resumes. We have publications that continually single individuals out to report on their "important" accomplishments. There are "ratings agencies" that rate how good we are. And so on.
Many years ago one of the biggest ratings agencies gave me a good rating and published it. I didn't seek it and didn't care about it. After a number of years they contacted me and advised they would no longer publish that rating unless I paid them. I didn't respond so that rating is no longer published.
Today in both the Arizona Republic and the Wall Street Journal there is an insert listing the "best" lawyers in Arizona. They are listed by specialty (there is no landlord tenant category--we are regarded as bottom feeders by our more "important" colleagues in the profession). The lawyers listed are the same old names that appear in all of these kinds of publications.
I regard these ego gratification listings as something akin to the wide variety of "who's who" publications on the market--the publications that repeatedly send spam e-mails inviting you to accept their invitation to appear in a "prestigious" publication--for a fee of course.
I don't mean to imply that the insert in this morning's paper falls in this category--I didn't receive any junk e-mails concerning this one, and they say you can't buy your way in. To the contrary, this one limits selection to people nominated by people who have already appeared in it. Sort of an "old boys network".
I have no problem with people who want to be listed in such a publication. But I do have a problem with a publication that implies that the "best lawyers" are those listed and that if one is not there he or she is not a "best lawyer". I certainly don't pretend to be a "best lawyer". But I know some who are but do not appear in this listing. In my opinion such listings are meaningless.
Immediate Evictions. The law permits a park to serve a notice of immediate termination of tenancy and to then file to evict without waiting any period of time. But the law sharply limits the grounds for such an eviction. To support such a notice, the tenant, a co-resident, or a visitor or guest under the tenant's control must have committed a "material and irreparable" violation.
This means he must have committed a crime on the premises involving bodily harm or serious property damage, illegal drug activity, gang related activity, prostitution, or "threatening and intimidating". This latter means actual threats of death or serious injury or serious property damage, seriously made that place a reasonable person in actual fear.
Courts are supposed to closely scrutinize these cases, and in eviction actions even when the defendant fails to appear, the court is supposed to conduct a hearing on whether the actions really took place before granting the eviction judgment.
I see a lot of landlords serving these notices for reasons not included in this definition. Recently a park served one on a tenant for trashing the inside of his own home. Another served one on a tenant for screaming and yelling a lot but not making threats. Yet another served one for placing offensive newspaper articles under a neighbor's windshield wiper.
Landlords are tempted to use these because they are under a lot of pressure from neighbors and others to quickly get the bad guy out. But if the violation does not really qualify as a "material and irreparable" breach, the eviction will likely fail.
When there are serious conduct issues not amounting to a material and irreparable violation. the park should normally serve a 14/30 notice (possibly a 10/20 if health and safety concerns are involved), not an immediate.
Bed Bug Insurance. Bed bugs are a problem for hotels and landlords who rent dwelling units. Once a resident brings them in they infest the structure itself, spread to adjoining structures, and unless cleaned out after a unit is vacated, infest the belongings of new residents. They have become resistant to many treatments and the problem has gotten acute in many areas around the country. Here is an information page from Terminex (no endorsement intended) identifying areas of the country hardest hit. Phoenix is one of them. This link also answers a lot of questions about them. http://www.terminix.com/bedbugsolutions/
Parks renting park owned homes are going to have to contend with infestations in those homes, and it can be an expensive problem to deal with. Insurance has now become available to cover the expense of bed bug remediation. I have not looked closely into it and don't know if there are a lot of loopholes in the policies making the coverage illusory or not. I also don't know what it costs though my suspicion is that it is high. Finally, although coverage is available for "landlords", I don't know if park owned mobile homes can be covered.
But this may be worth looking into for parks that rent significant numbers of homes. Here is a link to a company that writes these policies giving information on them. If interested contact your insurance agent. http://aon.mediaroom.com/index.php?s=43&item=2297
July 28, 2011
Discrimination Settlement. This morning's Arizona Republic reports on a case where an Egyptian couple and the Arizona Attorney General filed a fair housing discrimination lawsuit against a large apartment operator claiming discrimination on account of race (Arabic), national origin (Egypt) and religion (Islamic). The suit claimed the landlord made it difficult to rent, checked up on the couple all of the time, and then terminated the tenancy after the couple complained of the discriminatory treatment.
Obviously the landlord went through an investigation and failed to settle the case with a conciliation agreement before the suit was filed. As a result the landlord was forced to settle before trial and among other things paid nearly $200,000 to make the case go away. According to the paper (and in my experience as well) this is the largest fair housing settlement in Arizona history.
Aside from the obvious (don't discriminate) this case shows the importance of having competent legal representation when the complaint is first filed. Though I have no first hand knowledge of the case, an experienced attorney should have recognized the fact that the case presented real problems and that an early (and much cheaper) settlement was in order.
There are lots of lawyers out there pretending to know what they are doing and soliciting fair housing cases. Many don't really know all that much. I know because I get calls all the time from other lawyers asking how to handle a particular case they are representing a landlord on.
July 23, 2011
Service Animals. Two laws deal with proprietors being required to make "reasonable accommodations" to enable disabled persons to use facilities. One is the ADA, the other is the Fair Housing Act.
The ADA is enforced by the U.S. Department of Justice. Recently it revised its regulations concerning when reasonable accommodations need to be made to enable disabled persons to have animals on the premises to assist them. Essentially the revised regulations limit what sort of animal needs to be approved to dogs and excludes dogs needed only for emotional support. This new regulation has been circulated in the residential housing industry and has created confusion.
The main problem is that the ADA does not apply to residential housing. An exception is a "public accommodation" within a residential community like the rental office which is open to the public. Otherwise, as long as the community's facilities are limited in use to residents, visitors and guests the community is not covered by the ADA.
The Fair Housing Act applies to residential communities. Treatment of reasonable accommodation requests under the Fair Housing Act and the kind of animals that may qualify for reasomable accommodations under it are not affected by the ADA regulations. Under the Fair Housing Act, any kind of animal can be an "assistive animal" and this continues to include emotional support animals. In other words, residential communities must continue to consider reasonable accommodation requests from residents for all sorts of animals for all sorts of purposes. It is not limited to dogs, and emotional support animals continue to be included.
This is all made clear in a February 17, 2011 memorandum from the General Counsel of HUD which mey be read here: http://www.fhco.org/pdfs/news/NEWS_HUDonADAanimalChanges02172011.pdf
It would be a good idea to read this and print it for future reference.
July 15, 2011
New Articles. I have just posted three new articles on the MHC Articles page. They are the top three.
July 14, 2011
Power Scooters. Last year I blogged about the increasing number of power scooters being seen in parks. These contraptions are being obtained by people either unable or too lazy to walk under their own power. Users claim to be disabled and then often make demands on landlords for accommodations to enable them to ride the devices in park streets or even inside the clubhouse. In a few parks they have become so ubiquitous that they can't all fit inside the clubhouse without causing traffic jams.
My view on these is that when their use is the result of a disability and is necessary to enable the disabled resident to get around, exceptions to park restrictions should be made when possible to enable their use in community facilities. However I have long believed the mere fact that someone has one of these things does not mean that he is really disabled or really needs it.
For some time evidence has been floating around that many people use these things simply because they are lazy or want to draw attention and sympathy to themselves. There has also been evidence that a cottage industry has grown up selling these things to people eligible for Medicare and then ripping off Medicare for an inflated price on a device that is not really medically necessary in the first place.
An article appears in this morning's Arizona Republic concerning an investigation into likely Medicare fraud by vendors of power scooters. It can be read here: http://www.azcentral.com/business/consumer/articles/2011/07/13/20110713Feds-Medicare-crack-down-on-medical-scooter-fraud.html
This seems to confirm my suspicions that many of these things are being used by people without a medical necessity.
Truly disabled people will need to use power scooters and parks will, when possible need to make accommodations to their rules for those people to permit use in streets and facilities. However, parks may also encounter instances where people without a real need to use a power scooter will also demand a similar accommodation. If there is no evidence of a real handicap justifying use of such a device, parks are within their rights to require medical evidence of the need for using a power scooter and deny the accommodation when the necessity cannot be documented.
I get angry every time I see the ad on television with the woman sitting in her power scooter bragging that it didn't cost her anything and that Medicare paid for it. That means all the rest of us paid for it, and that is outrageous if she really didn't need it in the first place.
July 9, 2011
More Government--Federally Required Gas System Plans. When I wrote my July 6 post, I was not aware of the worst recent intrusion of Government into the lives of MHC operators.
The Office of Pipeline Safety of the U. S. Department of Transportation has adopted a regulation having the force of law requiring Master Metered Communities to develop "Distribution Integrity Management Plans" (appropriately called DIMPS).
An operator of a master meter gas or small propane system,including master meter systems used at MHC's, must develop and implement a written plan that addresses the integrity of gas and propane pipeline systems. The plan (the DIMP) must be implemented by August 2, 2011, and must address a number of issues. It is the responsibility of the operator to develop a plan that addresses these issues.
The issues to be addressed include knowledge of system infrastructure; identifying threats to pipeline; evaluating and prioritizing risks to pipelines; identifying and implementing corrective actions to minimize risks; measuring performance, monitoring results and evaluating effectiveness of plan; periodic evaluation and improvement of system; and reporting of results
In some States (like California), the State will enforce this requirement for having a plan in the file when it inspects gas line systems in parks. There do not appear to be any plans at the Arizona Corporation Commission to do that here though there is no reason an inspector could not ask to see the plan.
The federal regulation requires all documents encompassed by the DIMP be kept for at least ten years.
The federal regulations do not address what sort of penalties are available for non-compliance with this requirement. While there will probably be a period when the goal is to achieve compliance and not punish non-compliance, the Government has broad authority to sanction non-compliance with pipeline safety requirements. Penalties could conceivably be severe.
The American Public Gas Association has developed an on-line template for small operators to develop their plans (SHRIMPS). Originally the cost of using this template was nothing for operators with less than 1,000 customers. But beginning April 1, 2011 the cost was increased to $95 for such small operators. An operator must register on line, make payment arrangements and then complete the form much like a tax return is completed on line with TurboTax.
Here is a link to an explanation of how the plan is prepared. Disregard the statement that it is free for small users. http://www.pipelineandgasjournal.com/%E2%80%9Cshrimp%E2%80%9D-helps-utilities-create-dimp-plans?page=show
Here is a link to the Registration Page for SHRIMP: http://www.apgasif.org/i4a/pages/index.cfm?pageid=3294
For those who want to see the federal requirement in writing, here it is: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;sid=1bde92150c47330ac7596f345547bb8a;rgn=div6;view=text;node=49%3A220.127.116.11.4.16;idno=49;cc=ecfr
Finally here is a link to a WMA article on this. WMA seems to have been on top of this requirement for some time. If you are a WMA member you can get a discount on the SHRIMP price. http://www.wma.org/news/index.cfm?appAction=displayRecord&searchCategoryID=1&NewsID=2389
July 6, 2011
Government. Those who follow this blog or know me understand that I am not a big fan of government. I was raised in a military family and spent seven years in government myself a long time ago. The trends were already appearing when I was a bureaucrat indicating that instead of serving public policies and satisfying public needs in a limited manner, government was becoming more about government workers acquiring power, building their empires, and having the principal purpose of keeping themselves employed, and in many cases well paid.
It reminds me more and more of government in the time of Robin Hood where the nobility (including Church nobility that really was part of government) served similar purposes and, when money was needed, sent out tax collectors to squeeze more out of the peasants. Contrary to common belief, Robin Hood stole from the government (who also were the rich) and gave to the poor. Everyone Robin Hood robbed was a nobleman or Church official. No one else was even able to get rich.
Robin Hood represented a revolt against what was by then tyrranical government in England. We are not nearly that bad here but seem to be going down the same road. Consider these recent developments.
City Rent Tax Audits. Many cities are hurting for money and rather than cut back programs or lay people off, are raising taxes and searching for other revenue sources. One thing some of them are doing is auditing sales and rental tax payments of local businesses. Virtually all cities in Arizona have a rental tax that landlords are required to collect. If you haven't been paying the tax or the full amount due you may be audited and if found to have underpaid, required to pay what is due plus penalties and interest.
I have heard of instances where they are assessing rent tax on payments of tenants on mobile homes they are buying on the theory the payments are really rent on the home. Parks that have "sold" homes and are getting payments but have not transferred titles to the buyers with a lien reserved will have a tough time convincing a city auditor those revenues are not rent subject to rental tax.
FBLS Department. If there is a trough for government to feed at you can expect the FBLS Department to be there. Anyone licensed by this agency who falls behind on filing even meaningless reports apparently can now expect to receive threatening orders from it that among other things impose "administrative penalties" (fines) for the failure. In the past this sort of innocent oversight would be remedied with a phone call from someone there. But now we must have fines.
I am trying to tone down my criticism of this agency so I won't editorialize on this practice. Actually it speaks for itself anyway.
July 2, 2011
New ADA Swimming Pool Accessibility Standards. Recently new standards went into effect requiring certain swimming pools covered by the Americans with Disabilities Act to improve their accessibility by users with disabilities. The new standards will start being enforced March 15, 2012.
The ADA and the new standards apply to both public and private facilities including pools operated by public park and recreation districts, hotels and motels, fitness and recreational sports clubs, country clubs, high schools and universities, waterparks, hospitals and health care facilities. Regulations may also apply to private residential facilities, such as apartments, RV Parks and MHC's if these facilities are open to the general public. If the facilities are limited in use to tenants, residents and their visitors and guests the ADA and therefore the new standards do not apply.
There are swimming pool contractors out there who will try to imply and even declare that MHC and RV Park pools must comply. That is true only if they are open to use by the general public.
Generally speaking the ADA applies only to 12 types of public accommodations. These include places of public gathering and to "places of lodging". Places of lodging means transient occupancy facilities like hotels and motels. RV Parks might qualify if they are open to overnight or short term (less than a week) rentals. MHC's usually won't qualify as places of lodging unless they also have RV spaces available to overnight or short term renters.
Places of public gathering are a different story. If a MHC or RV Park allows its facilities to be used for public gatherings it could be brought under the ADA. For example allowing the pool to be used for swim meets open to out of park participants, or to public use by the sale of tickets or seasonal passes to non-park residents could convert it to a place of public gathering. It is usually best to strictly limit use of all community facilities to tenants, residents and their visitors and guests.
If a community is subject to the ADA (or if an otherwise exempt community allows public use of its pool), compliance with the new pool accessibility standards can be expensive. Pools bigger than 300 lineal feet need two access points meaning either sloped entries or pool lifts (or both). There are tax benefits available to offset some of the expense.
Even non-ADA covered parks may want to make their pools accessible for customer relations purposes. Here is a link to a website explaining how these requirements work. Note: This is a site maintained by an accessibility device company. I know nothing about their products and am not endorsing them by posting this link. But the information on it is good. http://www.aquaticaccess.com/adaadvisor.htm
June 30, 2011
ALJ Maintenance Cases. I received decisions this week on two contested ALJ cases in which I represented the parks. Both cases involved claims that the landlords had not been maintaining the park roadways, trees and other amenities.
In one, about 100 residents filed claiming the park did not maintain the water and sewer systems, the roads, the clubhouse, and the electrical system. The evidence at the hearing was pretty clear that the park had spent hundreds of thousands of dollars on these things. The extensive photos taken by the landlord showed that things looked pretty good and there was evidence that the complaint was in part fabricated by tenants angry over rent increases. This case was decided largely in favor of the park.
In the other, the claim was made that landscaping was not being maintained and the streets needed repaving. The park produced receipts showing regular landscaping maintenance and photos showing landscaping was in good shape. The landscaping claims were dropped.
As to the streets, the park again produced receipts and contracts showing tens of thousands of dollars bsing spent each year on street maintenance. But there was evidence of street maintenance code violations and, more importantly, extensive photos of the current condition of the streets showing large cracks and potholes leading the judge to conclude they were not safe for people to walk on. The park was ordered to repair these conditions. But repaving was not required.
The moral to this story is to maintain the park's facilities. Just spending money is not enough. Spend enough to keep the property properly maintained and safe.
ALJ filings are increasing. If you receive one of these, be sure it is responded to in writing within 20 days after it is mailed to you. If you are going to use a lawyer, do not file the response yourself--let him do it.
Medical Marijuana. There is now a lot of litigation on this. The Attorney General is suing in federal court to get a decision whether the State law is valid given the fact that any marijuana use or possession remains a felony under federal law. When that suit was filed, the State stopped processing marijuana dispensary applications until the question was resolved.
That led to a suit against the State by the medical marijuana proponents seeking an order in state court that the State be required to continue processing applications.
Its a real mess.
I still believe landlords should prohibit all marijuana possession and use on the rental premises regardless of the tenant holding a medical marijuana card, due to it still being a federal felony and crime free addendum violation, at least for the time being. But remember not to discriminate against someone just because he holds a medical marijuana card.
Abandonments. These continue to come in unabated. I will know when the economy starts to improve. Abandonment cases will begin to decline. Until then landlords need to be sensitive to homes being abandoned. If rent is delinquent and the home is vacant, assume it is abandoned. Notify the lienholder if any, and/or refer it for a landlord lien sale.
June 23. 2011
Bedbug Law--Park Owned Homes. ARS § 33-1319, part of the Residential Landlord Tenant Act, goes into effect on July 20, 2011. That statute requires residential landlords (i.e., those who rent dwellings they own) to provide "educational materials" concerning bedbugs to their tenants. The law does not apply to the rental of a "single family residence".
Parks that rent park owned homes are covered by the Residential Landlord Tenant Act. Since a park owned home would seem to be a "single family residence", the law probably does not apply to them. Nevertheless it may not be a bad idea to comply with it anyway. We recommend to residential landlords that they not only provide "educational materials" to tenants covered by the law but that a bedbugs addendum also be signed requiring both landlord and tenant to comply with the law and imposing requirements on tenants discovering bedbugs in the home,
We have an addendum and educational materials that clients can obtain on request by calling our office.
Adverse Credit Actions. Effective July 21, 2011, the Dodd Frank Act goes into effect insofar as it amends the Federal Fair Credit Reporting Act (FCRA). As of that date the FCRA will require notices of adverse action on applications for credit (including rental applications) which rely on credit scores such as FICO scores to give a new additional notice that the adverse action results in part from that score. This is in addition to the notices that must already accompany denials of credit and other adverse actions.
Parks utilizing the services of consumer reporting agencies in screening rental applications should already have been notified of this new requirement and should have been provided with the various notices that need to accompany the actual adverse action notice.
The MHCA Blue Book has a form of Notice to Buyer of Reasons for Rejection of Buyer form. That form is out of date and the new one that will appear in the next edition. A copy will be reproduced in a forthcoming "Today and Tomorrow" MHCA Newsletter.
The various notices required by the FCRA and provided by the credit bureaus (including the new form required by the Dodd Frank Act) should be attached to this notice by those parks using this form. Parks are not required to use the MHCA Blue Book form if their credit bureau has given them an adverse action notification form containing similar information.
If a MHC client needs the new notice form before it is published it can be obtained from our office.
Be sure that this information is provided only to the applicant for tenancy and not any existing resident trying to sell a home to the applicant or any brokers or dealers involved in the transaction. If a would-be seller wants to know why the buyer was rejected, there is another form in the Blue Book for this purpose.
June 18, 2011
Medical Marijuana. Landlords are getting conflicting advice from landlord specialized attorneys over whether to allow marijuana use by tenants in their residences. Some attorneys say it is preferred to honor the medical marijuana law and allow use by residents in their dwellings. Others say it should be strictly prohibited despite the medical marijuana law. At least one practitioner makes it clear that he is motivated by personal experience with a loved one who will benefit from marijuana use to redice pain resulting from terrible disabilities.
The problem stems from the government. Federal law makes it a felony to possess or use marijuana by anyone and makes no exceptions for State sanctioned medical marijuana users. The State laws ignore the federal criminal law and make possession of a State issued medical marijuana card a defense to prosecution for violation of state criminal laws. Federal prosecutors advise that for the time being they will not prosecute most medical marijuana users.
I believe a prudent landlord will ban all marijuana use regardless of cardholder status. In my view the federal law trumps everything else regardless of current prosecutorial policies.
I also think personal beliefs should play no role in advising clients what they should consider doing. In my personal view, marijuana is a gateway drug leading to worse things. Everyone I know personally who has used the stuff on a regular basis has been a slackard. So as a matter of personal choice I would never use it though in all honesty I have never suffered the debilitating pain that my colleague's family member suffers and have thus never been tempted to get it for pain.
However also in my personal view the government has no place creating victimless crimes. I think marijuana use by and large is a victimless crime. To me there is no greater evil than government that oversteps its lawful restrictions and begins controlling our personal lives. I also think States should have every right to legalize marijuana use when the federal government oversteps its limitations to restrict it. In other words I think our medical marijuana law should be valid in our system of government.
The problem is that the US Supreme Court in a case involving a similar California law has already ruled the federal criminal law controls over the State law. If it is true in California it will be true here.
So personally I would not interfere in anyone's use of marijuana despite my personal dislike of the stuff. But the state of the law is such that the federal criminal law has been upheld as prohibiting it even for cardholders under a similar State law. Since the controlling law makes it illegal, landlords should recognize that and in my view, should prohibit possession and use by residents regardless of cardholder status.
Regardless of a landlord's decision, it would be well to start using a marijuana addendum with future rental agreements. Our firm has published two, one for landlords deciding to prohibit use and one for those deciding to allow it be cardholders. See them here: http://www.wzplegal.com/
Hopefully the permissive use link will be working by the time you check it.
Finally, and this is very important, the medical marijuana law specifically prohibits landlords from discriminating against someone because he is a cardholder. Do not take into account the fact that someone has a card in making any decisions about him. Our recommendation is that landlords simply forbid use of the stuff on the premises.
Abandonments. There has been no let-up in the number of abandonment cases we are getting. Older people continue to die and younger ones continue to lose jobes or suffer reduced incomes. The economy is not recovering from the terrible recession we are in and now it seems to again be getting worse. To cap it off, mobile homes continue to age and their value continues to diminish making them less desirable to people in the market for homes where foreclosed stick-built houses are almost being given away.
All these factors contribute to the continuing high level of abandonments. And this is the time of year that abandonments in age 55+ parks tend to spike--when seniors go back north for the Summer and decide they don't want to or can't afford to return next Fall. This is now happening on a fairly common basis in park model communities as well as MHC's.
If a home is abandoned, don't ignore the problem. It is not going to just disappear and it will not get less expensive to take care of the problem by waiting for rent arrearages to accumulate. It is critical that abandonment notices be given to lienholders immediately, and if a lienholder is unresponsive or there is no lien, the matter should be referred for a landlord lien sale procedure as soon as possible.
June 17, 2011
Interest on Judgments. All judgments for money bear interest at either the rate specified in the contract involved in the case or, absent that, at the "legal rate". For decades the legal rate has been 10% per year. Since rental agreements do not set an interest rate for delinquent rents, eviction judgments bear interest at 10% per annum--the legal rate. No one much cares about this since these judgments are so rarely collected.
The last session of the legislature enacted SB 1212. This changed the legal rate from 10% to the lesser of 10% or the average prime rate published by the Federal Reserve in its H.15 publication plus 1%. That federal Reserve prime rate is an average of the prime rates of the 25 largest banks and is published every month. Here is a link: http://www.federalreserve.gov/releases/h15/data.htm
The new Arizona law also says the interest rate must be stated in the judgment. This creates huge problems over a truly inconsequential issue. This rate can be changed every month. Over the last 70 years it has ranged from less than 2% to more than 20%. For the last year it has been at 3.25%. that means at the present rate, judgments will bear interest at 4.25% (prime plus 1%).
But since the rate can change at the drop of a hat without advance notice, lawyers and others preparing judgments will not know with certainty at the time of preparing the judgment what the rate will be when the judgment is signed. If it changes between the time it is submitted to the Court for signature and when the Judge signs it, the judgment will be wrong.
The law seems to assume that Judges will ensure the correct rate is in the judgment, but that is totally impractical. Especially in the case of the large volume of JP Court evictions, Judges simply don't have the time or resources to check this.
If the interest rate in the judgment is incorrect because it changed, then there are possible violations of the Federal Fair Debt Collection Practices Act that result. That in turn can expose lawyers and clients to liability.
This is the law of unintended consequences at work. Two possibilities exist to minimize the risk in this area: (1) simply waive interest. This is a possibility in eviction judgments since thay are almost never collected anyway; or (2) state the interest by a reference to the FRB Prime Rate in effect on the date judgment is entered. I am not sure the latter satisfies the literal requirement of the law. But it may be better than risking submission of a judgment containing what turns out to be the wrong interest rate.
This law goes into effect on July 20, 2011. Here is a link to it: http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/50leg/1r/bills/sb1212h.htm&Session_ID=102
June 10, 2011
Phony Assistive Animals. This has become a problem of epidemic proportions in the United States. Basically the Fair Housing Act and the ADA require housing providers and public accommodations to permit handicap assistive animals for persons having disability related needs for such animals. Like many good laws, this requirement is being perverted and abused by people for their own purposes. Essentially, many people are pretending to have disabilities and to need an assistive animal in order to have a pet despite a landlord's no pet rules.
This has resulted in the creation of a cottage industry of businesses selling phony service animal certifications over the internet. What is being sold is a "registration" of the animal, an animal ID card, an impressive looking certificate, and a document designed to intimidate a landlord or business proprietor into believing the law requires him to allow the animal on his private property.
For example one outfit sells such a package for about $150.00 plus shipping. All you need to do to get the package is check a box saying your dog does "Most" of the things the page says a real service animal does. Once you click the box you are transferred to the payment page where you put in your credit card information and shipping address so your service dog certification package can be sent to you.
Another one charges $40.00 for the basic registration but charges extra for all the other stuff ($40.00 for the animal photo ID card, and various sums for animal patches, badges, etc). Like the first site, this one only requires the customer to "certify" he is disabied and that the animal is necessary and qualified.
Here is a link to an outfit that debunks this excreble industry. http://www.servicedogcentral.org/content/node/509
I suggest landlords print the list of organizations on that page out and be on the lookout for residents demanding approval of house pets as service animals and presenting certifications from one of the organizations listed. Such a certification is meaningless. Any request for assistive animal needs to be handled in the same manner as other requests for reasonable accommodations. See my May 31, 2011 post below on this.
Park Maintenance. This has become the new hot issue for AAMHO inspired ALJ complaints. Local park tenant association chapters are going around identifying what they think are violations of health and safety codes and then filing ALJ complaints with the Fire, Building and Life Safety Department. They will take photographs, sometimes staging them to look really bad in an effort to show how awful the park looks.
In a new twist, some of them have lately developed the tactic of calling the local code enforcement agency to inspect the park. Tenant representatives will escort the inspector around and induce him to write up a violation notice. This seems to happen literally on the eve of the hearing. Then an effort is made to introduce evidence of the violation notice in an effort to "prove" the code violation.
course this is terribly unfair and really deprives the park of due process since the violation notice is merely an inspector's opinion that there is a violation. Often as these notices work their way through the local code enforcement system, many such notices fall by the wayside when it is determined the condition at issue does not violate anything. Introducing evidence of the violation notice immediately after it is issued before the local process has really even started, at an ALJ hearing short circuits the entire system and sandbags the park.
Any park about to attend a failure to maintain ALJ hearing needs to be prepared for a last minute code violation notice engineered by tenants.
With that said, the plain fact is that some parks are in violation of local codes. Section 33-1434 of the MHP LTA requires landlords to keep parks in compliance with health and safety codes. Parks that fail to do so are going to be sanctioned for that failure. So keep the place maintained!
Enforcing Rule Changes. Parks are constantly updating their rules to deal with problems that have developed over time and to reflect technological or legal changes impacting them.
Section 33-1452 (D) of the MHP LTA allows a park to change its rules and regulations at any time on giving 30 days notice of the change to all tenants. The tenant does not need to agree to the change and his signature is not necessary to make the rule change effective.
But that same section says that if the change makes a "substantial modification" to the rental agreement it can not be enforced against present tenants in compliance with the earlier rule but not with the new rule. Such tenants are "grandfathered in".
What is a substantial modification? The term is not defined in the law or in any cases construing it. I believe it means something that would cost more than a nominal sum to comply with or would constitute a basic change in the quality of life.
For example, a rule requiring larger storage sheds or new siding or different exterior paint colors. It would cost a lot of money to comply with such a change making it a substantial modification.
The other kind is a basic change in quality of life. For example adopting a no pet rule and trying to make tenants get rid of their previously approved pets. Or a new lower occupancy standard and trying to make tenants get rid of now excess previously approved occupants.
But rules simply saying for the first time that tenants need to keep their siding maintained or keep their paint jobs looking decent, or that they need to keep their pets on a leash outside are not in my view substantial modifications.
When a tenant sells his home to a third party, the park can then require it to be brought into compliance with all rules and the new tenant will have to comply with all then current rules.
Adverse Actions Against Tenants Listing Homes With the Park. Some parks have in house dealerships that will list tenant homes for sale in the capacity of a broker. Such a relationship carries with it certain fiduciary duties of the broker towards the tenant/client. For such a park to then turn around and file a non payment of rent eviction against such a tenant or to treat the listed home as abandoned and start a landlord lien sale process on it could be viewed as inconsistent with that fiduciary duty.
Before taking any such action a park should cancel the listing agreement and inform the tenant why it is doing so.
In addition it would be a good idea to make it an express condition of the listing agreememt that during the term of the agreement, space rent and utilities must be kept current.
Sometimes a deal will be made to carry the rent while the home is listed and collect it out of the proceeds of sale when a sale closes. In that event write the agreement up clearly and have it signed. Also address what will happen if the listing expires without a sale.
June 8, 2011
Dictatorial Managers. If there is one thing that causes the most problems for MHC landlords, it is the manager who runs his or her park like a concentration camp. There is no greater source of tenant complaints than tyrannical managers. Nothing causes landlords more operational problems than managers who will not follow directions.
Managers sometimes develop an attitude that the park belongs to them after being on the job for a number of years. Since they are on-site every day, they become more intimately acquainted with the community and its residents that the owner. They may disagree with decisions of the owner about such things as maintenance of facilities, selection of contractors, enforcement of rules against tenants, sales or rental of homes, imposition of late fees, and even when and against whom to file evictions.
Some get to a point that they think the owner or supervisory manager is stupid or at least not as well informed as they. It is not uncommon to see a manager simply ignore an owner's direction or decision that the manager disagrees with. The manager may have what he or she thinks is the best interest of the park in mind in ignoring the owner. But that does not excuse such an action.
The simple fact is that the manager is hired help--an employee. His job is to follow the directions of the owner. If he thinks an owner is wrong or poorly informed, his obligation is to speak with the owner and make his views and recommendations known. But the final decision is the owner's.
If the manager still disagrees, he has two choices. Follow directions or resign. The manager does not have the option of just ignoring the owner. That violates his responsibility of loyalty to the owner/employer, and constitutes insubordination. That is good cause for involuntary termination. Since the termination is for cause, the now ex-manager may not even be eligible for unemployment compensation.
Some managers who think they can run the park in any way they want may begin treating residents in an abusive manner. Occasionally such a manager will play favorites in enforcing park rules or may just become unreasonable and dictatorial in enforcing them generally. In acting this way without the owner's knowledge or consent, the manager is hurting the value of the community to both owner and tenants. He or she may be driving tenants out and increasing vacancies. That too is a violation of one of the main obligations of the manager to the owner/employer and also normally justifies termination for cause.
When a domineering and intolerant manager is running a park the owner may think everything is going okay. Out of state owners are especially prone to this. They may have no idea of how many problems are being created in the park that will eventually wind up on their doorstep.
Owners need to pay close attention to what is going on in their parks. The fact that they are not hearing anything bad or anything at all from the manager should not lead them to assume that everything is okay. Owners need to personally visit the park at least a few times a year. Talk to residents or tenant association representatives.
Also, personnel problems are hard to deal with and it is human nature to want to avoid confrontations and conflicts with employees. It is important that owners not ignore the evidence in front of them that they have a serious manager problem. Ignoring it--going into denial--will only make it worse. In the extreme situation when a manager needs to be let go, when counselling, improved supervision and better working conditions do not suffice, when termination is the only remedy, the owner needs to face up to the problem and let the manager go.
Owners with several parks should consider rotating managers from park to park every couple of years. Other owners at least need to keep in close contact with the park and the manager. Be sure the manager is getting adequate time off to be away from the park from time to time. This is a very tough job.
Finally, some times the manager's changed attitude results from emotional, mental or aging problems. Owners need to be sensitive to changes in a manager's personality resulting from medical or psychological changes. Especially for older managers who have been on the job a long time, this can result in the unavoidable need for termination. Disability laws (the ADA) require employers to seek out some accommodations to allow medically or mentally impaired employees to continue to work when an accommodation will resolve the problem without the need for termination. But once accommodations have been explored without success, if the only solution is termination, it needs to be done and not avoided.
The worst thing an owner can do is just put off or ignore altogether a manager running the park like a concentration camp.
Fines. Some parks impose fines for various kinds of rule violations. Some impose them as a matter of policy, some put them into park rules, and some include them in rental agreements or special addendums like pet addendums.
Generally speaking, any monetary matters need to be included in something the tenant agrees to and signs. Since park rules are usually not signed, there is no basis for a landlord to argue that the tenant agreed to payment of fines for violations. Parks with rules containing provisions for fines or penalties should have the rules signed by the tenants. The better practice is to include a schedule of fines with a description of the offense that will trigger the fine as an addendum to the rental agreement that is signed by landlord and tenant.
I dislike fines. While not prohibited by the MHP LTA, they are not sanctioned by it either. Before enforcing them a judge will need to be convinced the amount is reasonable and the violation is material. Moreover, many judges will rule that a fine is not rent and refusal to pay a fine by a tenant cannot trigger an eviction for non payment of rent. Parks using fines to achieve compliance need to clearly state that all such fines and penalties constitute additional rent.
The better managed parks do not employ fines to get compliance. They counsel with residents, issue warning notices, follow up with 14/30 notices if compliance is not forthcoming, and finally file to evict the non-complying tenant if he will not comply.
June 6, 2011
Immigration. On May 26 I reported on a U.S. Supreme Court decision upholding the Arizona Employer Sanctions Law. Today the Court took another action in this area. The City of Hazleton, PA some years ago enacted an ordinance requiring employers to use e-verify when hiring people and imposed sanctions against employers hiring Illegals without using the e-verify system. In many ways the ordinance was simillar to the Arizona law.
But it went a step further and also imposed sanctions against landlords who "willfully house" illegals. That is something not in our Employer Sanctions law though it does appear in SB 1070 that is presently suspended due to an injunction from the Arizona Federal Court.
Today the Supreme Court vacated the opinion of the U.S. Third Circuit Court of Appeals ruling the Hazleton ordinance unlawful and ordered it to reconsider its decision in light of its Opinion upholding the Arizona Employer Sanctions Law.
This has no immediate effect on Arizona but we will be watching it closely since landlords are targeted and since we need to figure out how such a law if allowed to become effective would mesh with Fair Housing Laws.
May 31, 2011
Reasonable Accommodations. These are more and more common when being requested by residents. When appropriate the requests must be granted in order to comply with Fair Housing Laws. But when not appropriate they should be denied or compromised to avoid abusive tenants using the laws to accomplish improper purposes. The two most abused kinds of requests are those for residential caregivers whose purpose is to get ineligible occupants the right to live with the tenant, and for assistive animals to get ineligible house pets into the community.
General Rule. When a reasonable accommodation request is made, if the disability is obvious, do not ask for evidence of it. But when the disability is not apparent, request some credible medical evidence that it exists. Generally speaking a note or request from a medical provider (for example a note from a doctor's prescription pad) will suffice. Once the disability is established, if the need for the accommodation is obvious (for example a seeing eye dog for a blind resident), no more documentation should be requested. But if the need for the accommodation is not apparent, request some credible evidence that the accommodation is connected with the disability. Once the disability has been established and the accommodation is shown to be necessary for the resident to cope with the disability, it needs to be granted unless it is not reasaonable. That normally means unduly burdensome in terms of expense or change in the nature of the landlord's business. In that case the Interactive Process needs to be engaged in.
Interactive Process. If a disabled person requests an accommodation that is simply beyond the reasonable ability of the landlord to allow, a negotiation needs to be initiated to see if there is some middle ground compromise that will satisfy the needs of both. A landlord should never just say "no" to a disabled resident. It may be "no" to the exact thing being requested but the response should aslo suggest possible alternatives and ask the resident to engace in a discussion to see what alternatives can be worked out.
Caregivers. Often loved ones will be released from prison, become homeless due to job loss or marital breakup, or a child may become orphaned. A tenant may ask for permission to have that person move in. But due to age restrictions, occupancy limits or criminal background criteria the person may not be eligible. A common tactic is for the resident to suddencly become disabled and request approval of the person as a caregiver. Although the landlord may suspect this is a lie, if a medical provider certifies the resident is disabled, the landlord must normally accept that regardless of his suspicians. Nevertheless a caregiver request need not always be granted, especially if the caregiver has a serious felony record or a family of his own to move in. A possible solution here is to allow the "caregiver" free access to the community during daytime hours for care giving purposes but not to reside there. This can be arrived at through the interactive process.
Reverse Caregivers. Sometimes the resident will be a caregiver for a gravely disabled child not meeting community age restrictions. This too is a situation covered by Fair Housing Laws. Where the situation is authentic, an age 55+ community will normally need to make an exception to its age restrictions to allow the young disabled person to live there.
Assistive Animals. Many landlords have communities where tenants fake disabilities to get their pets approved as assistive animals. Unfortunately the system lends itself to this sort of abuse. All a landlord can do is follow the above general rules, confirm the disablity and the disability related need for the animal. Many people are now coming up with doctors' notes saying their patient needs an emotional support animal. Even here, however, when the request is unduly burdensome (such as a dangerous breed or an excessive number of animals is involved), the landlord should engage in the Interactive Process to try and find some middle ground to mitigate the bad effect on the community while accommodating the resident's needs.
Joint Statement. HUD and the U.S. Justice Department in 2004 published a document explaining how this all works. It is easy to understand and is the best explanation I have seen anywhere. You can read and print it out for future use here: http://www.hud.gov/offices/fheo/library/huddojstatement.pdf
May 26, 2011
Memorial Day. Monday is Memorial Day when we honor our dead veterans, especially those who died in combat. To me this is the most important holiday on the books. Think about what we as a country owe them on Monday.
Employer Sanctions Law. This is the law that was enacted a couple in years ago in Arizona requiring employers to screen job applicants theough e-verify. After the law became effective a lot of Illegals left Arizona and many family parks started developing high vacancy rates. The law has since been on appeal and today the U.S. Supreme Court upheld it. If you want to read the dry 69 page opinion, here is a link to it. http://www.supremecourt.gov/opinions/10pdf/09-115.pdf
This is not SB 1070, the law enacted last year that has largely been placed on hold by the Federal Court in Arizona. That one is still working its way up the appeals system. It is possible that will be considered by the Supreme Court next year. The chances of that law being upheld, at least in total in my view are not good. But we shall see.
May 21, 2011
Maintenance Responsibilities in Parks. Yesterday I represented a Park at an ALJ hearing at which representatives of a municipal code enforcement agency testified. The tenants were represented by a law firm. I found it shocking that no one seemed to understand the allocation of maintenance responsibilities in Parks.
ARS § 33-1434 requires the landlord to maintain the "premises" (meaning the Park in general) in a clean, safe habitable condition, to keep it in compliance with health and safety codes, to provide for trash removal, and to provide utility outlets for tenants. This statute is cited all the time by tenants in their ALJ Complaint filings.
But ARS § 33-1451 requires tenants to maintain their space (that part of the premises that they rent) in compliance with applicable codes, dispose of trash in a proper manner, and to keep it clean and safe.
So the MHP LTA in general requires tenants to maintain their spaces and for the landlord to maintain the unrented spaces and common areas and facilities. In addition the Act actually prohibits landlords from having access to tenant mobile homes in ARS § 33-1454 (A). So a landlord is explicitly prohibited from doing anything needed to maintain a tenant mobile home.
In addition there is a special statute dealing with maintenance and repair of utility lines that appears in another title of the Arizona Revised Statutes. ARS § 41-2155 (E) provides in part:
...the owner of a manufactured home or mobile home located in a park subject to title 33, chapter 11 is responsible for the maintenance of utility connections from any outlets furnished by the landlord pursuant to section 33-1434 to the unit, except that the landlord is responsible for the maintenance of connections for any distance greater than twenty-five feet to the point at which the utility connections are the property of the providing utility company if the outlet is located outside the lot line of the owner's unit and is more than twenty-five feet from the unit. A local enforcement agency that determines that local code requirements are not being met or that maintenance or safety activities are needed for utility connections may not require anyone except the responsible party to perform or pay for such activities.
Essentially this requires tenants to maintain utility lines from their homes to the park provided utility outlet. But if the distance is greater than 25 feet and the outlet is located outside of the rental space, the tenant is only responsible for the first 25 feet. This statute was added about 15 or 20 years ago (I don't remember exactly when) because the City of Phoenix at the time was making landlords replace water lines connecting homes to park meters originally installed by tenants when they developed leaks. This statute was designed to stop that sort of abusive code enforcement by a municipality.
Anyone participating in a case that involves allocating maintenance responsibilities in MHP's needs to understand this complex interplay among statutes. Tenants almost always try to force parks to do the expensive maintenance tasks the law imposes on them. On the other hand parks often fail to understand that they must spend what it costs and do what it takes to ensure the park is safe, clean, fit and habitable.
The sad thing is that in yesterday's case, the tenants pressured the municipality to come into the Park and do an intensive code inspection. Many violations were reportedly found though most sound minor. But it also sounds like a great many of them were tenant violations meaning that violation notices more than likely are going to be served on the very people who filed the complaint and called for the inspection.
May 17, 2011
Eviction Filing Fee Increase. You just gotta love the Government. Court filing fees for evictions in Maricopa County are increasing on June 1, 2011 from $45 to $55 per case. That's more than 20%. Who else other than a Government monopoly could have a 20% increase with no commensurate increase in service?
And of course its hugely regressive, hitting tenants getting evicted but want to remain with an extra $10 to do so, and being added to the debt of those that get evicted. And for those who leave and don't pay, its another expense of landlords that gets factored into the next rent increase for tenants who remain.
So while they haven't gotten us with the new Turbo Court "service fees" in Justice Court, we are getting it with the new increased filing fee.
Other Counties can probably expect to see similar increases.
Most other fees charged by Justice Courts are also going up on June 1. I'm sure we can expect to see a 20% increase in the quality of service. Just the eviction fee increase will put about $600,000 a year additional cash flow into the hands of the Maricopa County Court administrators.
May 14, 2011
Additional "Hidden" Court Fees. Effective May 1, 2011 the Maricopa County Superior Court pursuant to a State Supreme Court Order instituted a mandatory requiremjent that all pleadings filed with it be filed using a system called "Turbo Court". If you dig into it you will find that every filing made by way of Turbo Court carries with it a $6 "service fee". In a complicated piece of litigation where lots of motions and similar pre-trial filings are required, at $6 per filing those fees can mount up fast. I imagine but don't know that these fees will be divided up between the Court system and the Turbo Court company.
Turbo Court filings will soon be required for Division I of the Court of Appeals. I am fearful that they may soon be required for all filings with Justice Courts where we do evictions. Filings by way of Turbo Court are already optional at the Justice Courts. The cost of an eviction can skyrocket if a mandatory $6 "service fee" is imposed on every filing in a Justice Court eviction action.
But so far the requirement to use Turbo Court for routine filings in Maricopa County is limited to the Superior Court.
If you are in another County, be aware that this requirement may soon be extended to you.
MHCA Conference. This took place over the last three days. It was pretty uneventful. One thing I was happy to see was the attendance by an officer of AAMHO. I understand MHCA officers have been invited to attend AAMHO events as well. Maybe the destructive, poisonous relationship that has prevailed over the last five years is at an end. The industry was a lot better off when the two organizations professionally disagreed on a few things but worked together on the great majority of issues affecting the industry where the interests of tenants and landlords were in line with one another.
One example of this evolving cooperative relationship is the new law subsidizing relocations out of Age 55+ parks converting to all age status. The two organizations got together and jointly worked to get the Bill passed. While I still dislike certain aspects of that law, the fact that it was the result of a cooperative effort is something to be happy about.
MHCA Website. Last week also saw the debut of the newest version of the MHCA website. Nothing has plagued the organization any more than trying to get a functional website that can be kept up to date. Many elements of the new site are in the testing, de-bugging stage. But I am optimistic that this time it will work out. The developer of this site has close ties to the MHC industry and is highly motivated to get it running and kept functional. Here is the link: http://azmhca.com/ And here is a link to the developer whose site shows its involvement in the industry: http://mhcsitebuilder.com/
Marketing and Your Image. One of the sessions I sat in on at the Conference was by Randy Johnson of Valley Vistas Management about marketing a park. One of his major points was that an important but often overlooked aspect of marketing the park is maintaining it, being aware of what kind of image it presents to visitors and prospective residents, how management and staff appear and how they deal with residents and the public, and how management ensures that the park and its structures are maintained by both residents and staff.
Important here is management relations with residents, and the need to avoid getting into arguments or fights with residents, even when residents are clearly in the wrong. A well trained manager will always avoid rising to the bait when provoked by an angry resident. Back off and allow emotions to cool before going back and trying to get the problem resolved.
Don't expect residents to be overly concerned about maintaining their homes and rental spaces unless management maintains the common areas and community facilities. Also be aware of how the management office and park staff appear. If the office is cluttered and slovenly or if the staff is poorly groomed and sloppy looking, don't expect the community to look any better. Present a professional image in your day to day dealings. Then you may find your residents more inclined to do what they need to do to maintain their part of the community.
Back to AAMHO. Notwithstanding the apparent improvement in landlord and tenant organization relationships, the tenants' association still has major disagreements with landlords over many important issues. A visit to the AAMHO website (http://www.aamho.org/Presidents-Blog.php) reveals great unhappiness with such things as the recent ALJ decision clearing holding tenants responsible for maintaining trees on their rental spaces. There is unhappiness over landlords, in their view, nickle and diming tenants over fees to squeeze more money out of them whan fixed incomes relied on by many have been frozen or even reduced for the last several years.
Examples are charging the single family service rate for sewer service when the park is using an in house septic system, and landlords unbundling utilities and beginning to separately charge for things previously included in the base rent. Other examples are landlords who charge things like special fees for serving notices and charging the single family service rate for trash pick up when trash is placed in central dumpsters and curbside pickup is not offered.
While these things are permitted by the MHP LTA, constantly jacking up a variety of fees without any change in the level of service is almost guaranteed to create bitterness and resentment on the part of residents, especially in Age 55+ parks with many residents on fixed incomes. It certainly is lousy marketing.
Times are tough for everyone. Landlords are well advised to take into account the ability of tenants to pay their monthly rent, utility and fee bill in light of their financial circumstances before increasing these fees. While a park operator obviously needs to generate revenue to cover expenses and produce a reasonable return on his investment, imposing such fees or increases solely to take advantage of the law and increase profits in the long run may be self defeating. It can make it more difficult for residents to sell their homes when they need to move, to maintain them while they are there, and can result in future legislative battles over changing the laws or legal expenses in defending against resident ALJ complaints or lawsuits.
May 6, 2011
Statute of Limitations Suit. Last year, I represented MHCA in a suit against the FBLS Department. The former Director had interfered in an ALJ case and issued an unauthorized order to the effect that the one year statute of limitations that applies to claims under the MHP LTA, did not apply when those calims were asserted in ALJ cases. The Superior Court agreed and rendered a decision that the one year limitation period does apply in ALJ cases and issued an injunction prohibiting the Department from directing otherwise.
The Department appealed. It did not dispute the Superior Court decision that the one year statute of limitations applies. Instead its appeal was limited to challenging the standing of MHCA to bring the lawsuit in the first place. The Court of Appeals agreed and set the Superior Court decision aside.
This decision is consistent with a trend in the Appellate Courts not to interfere in the functions of State agencies. We have seen this trend developing with the large number of sweeps suits seeking to stop the State from taking money out of special purpose funds for other uses. In a way its nice to see the Courts take a modest, non-activist approach, and its certainly consistent with conservative principles. But it worked against our effort to restrain the Department in this case.
Its notable that the Court of Appeals avoided the one year statute of limitations issue except to point out that the decision giving rise to the suit was by the old Director. The Court pointedly noted that the new Director was in no way bound by that action but that if he chose to follow it, that decision could be challenged.
This decision in no way changed the legal fact that the one year statute of limitations applies to claims under the MHP LTA and filed with the Department for an ALJ hearing.
Suicides in Parks. Last week I handled an eviction of a tenant living in a travel trailer. He had fallen on hard times, had no income, was unemployed, had no family or friends, no job prospects, had just come out of a bankruptcy, and was many months behind on his space rent. In meeting with him and explaining what was happening in the Court process it became pretty clear that his situation was desperate. I referred him to a local social service agency that had helped a few people in similar circumstances, but also obtained a judgment evicting him.
A week later he was dead, having put a bullet through his brain in his travel trailer.
This happens a few times each year following eviction judgments. Some people just run out of options. They face the prospect of loss of their home and living on the streets and decide instead to just end it all. It can be heartbreaking to meet people in such desperate circumstances and at that point I don't have any realistic solutions.
A hundred years ago, people in this country had families that recognized an obligation to help one another. There was more private charitable assistance available. But now we live lives of increasing isolation, dependent on government instead of family for support. All too often people feel no obligations arising out of family relationships. Too frequently the only time families show up is after someone dies when they come in to loot the home of any valuables.
Friendship is not what it used to be. Now friends are people who think you can help them. Just turn to a "friend" for financial help when you need it and you will find that you don't have very many if any at all.
Anyway, parks should be sensitive to the isolation and desperation of residents who have fallen on hard times. When they get behind on rent or home payments, talk to them; refer them to any social service agencies that help people in such circumstances and try to get family members to intervene if that is possible.
Evicting these people when they get buried in debt is hard enough. Cleaning up the aftermath of a suicide in the park is awful. Whatever a park can do to avoid that would be a worthwhile effort.
April 30, 2011
MHCA Publications. I have updated the Blue, Orange and White Books. These are form books for MH and RV space rentals and the park management handbook. There is a lot of new stuff in these revised publications and it would be worthwhile to get copies. There are discounts for MHCA members and for trading in the cover of the most recent version for the new one. Contact MHCA to order new ones at (480) 345-4202 or 1(800) 351-3350.
Legislation. The Governor has signed the bedbugs bill, the mobile home sales escrow bill and the age 55+ conversion to all age park relocation bill that I have written about, most recently on April 16. That means they will go into effect on July 20, 2011. Another bill that was signed was the one converting the agriculture funds that were swept by the legislature a couple of years ago into trust funds. That should protect them from being swept again since the law seems pretty clear that designating such funds as trust funds protects against anyone subsequently taking money from them for other purposes.
Anniversary. It has been a year since I moved in with Scott Williams and Mark Zinman. It has worked out well for a number of reasons. The number of abandonments I am handling has skyrocketed. A year ago I would not have been able to handle them. But now with the help of Chris Francis, my legal assistant, and with having computerized most of the forms and scheduling, I am able to easily handle this volume at what I think is a reasonable cost to clients.
I am also able to get evictions scheduled and finalized much more quickly than before and my charge for evictions is only about a third of what I needed to charge before. The downside, however is that most of the court appearances in these cases are actually handled by other attorneys that we have cooperative relationships with. That means I don't get to interact with my park managers as much as before. But the increase in speed and big reduction in cost seems worth it.
Another result of the merger is that I have a lot more time to spend in the office. I am usually available by phone and almost always can instantly respond to inquiries by e-mail. No matter where I am my home page is always open and that is my trailerparklawyer e-mail page. Even now, a year later, people are surprised at how much more available and responsive I am than before.
All in all it has worked out well.
One area that gets mixed reviews is our billing practices. This firm bills twice a month, and the bills are computer generated based on time and cost information we put in during the billing period. It took me a while to get used to that and I made a few mistakes. But that problem seems to have been taken care of.
A few people get the impression that my charges have increased under this new billing system. That is wrong. Nothing I do costs more than before and many things (like evictions) cost a lot less. But the bills look different. This coupled with the fact that I may actually be doing more stuff for a client than before may give the impression that my charges have increased. That is simply wrong.
A majority of clients like the new billing but some don't. To be honest I would prefer once a month billings but there are very good reasons why twice per month is necessary.
April 23, 2011
Park Models. A lot of traffic is directed to this site as a result of Google searches for information on Park Models. As a result I have completely rewritten and updated the Park Model page.
Agriculture Funds Sweeps Case. I have written on this the past couple of years. Briefly, the Legislature took money out of a number of agriculture funds that were created by special assessments on the growers of specific crops. The money went into special funds that were earmarked for specific purposes protecting and improving those crops. Several agriculture organizations got together and engaged me to sue to reverse those sweeps and get the money returned to the funds.
Suit was filed and we obtained a judgment against the State ordering the money returned. The Governor appealed and the Court of Appeals last November reversed the trial court and upheld the sweeps as constitutional notwithstanding violation of the enabling statutes that limited use of those monies to specific agricultural purposes.
We sought review by the Arizona Supreme Court but earlier this week that Court refused to review the decision meaning the Court of Appeals decision stands.
This is a published opinion meaning it sets precedent for other Courts in Arizona. This case together with some other recent decisions pretty much authorizes the Legislature to redirect almost all special purpose funds to other uses despite the fact that the money comes from specific industries and is limited to being used to benefit those industries.
One way to protect against this is to have the statutes setting up such funds specifically call them trust funds and set the handling of the money up as a trust fund. While our petition to the Supreme Court was pending the agriculture industry was working at the Legislature and was successful in getting these fund statutes amended to become trust funds. That Bill is on the Governor's desk and I hope she doesn't veto it. As long as they remain trust funds they should be protected from being swept despite the holding of this and other cases.
Relocation Fund. These decisions make it more likely that the Mobile Home Relocation Fund could be swept at any time like it was in 2002 (though we sued then and got the money returned). That is probably not going to happen since the State has authorized the FBLS Department to sweep it through the back door by taking money out yearly to fund its operations. But it could.
One way to protect against this in the future would be to revise the Fund statutes to set it up as a trust fund like the agriculture industry has done. Of course it is too late this year since the Legislature has adjourned.
April 21, 2011
Legislation. The Legislature has adjourned. HB2395 (Age 55+ park conversion relocations) and SB1423 (MH sale escrows) were both passed and sent to the Governor for signature. She will almost certainly sign them meaning they will become effective on July 20, 2011.
MHCA Conference. This is coming up in Phoenix on May 11-13. I will be speaking on several topics on Thursday and Friday, May 12 and 13. There are a lot of manager training credits available meeting state requirements. If you haven't registered and wish to, call the MHCA office at (480) 345-4202 or 1(800) 351-3350.
April 16, 2011
Legislation. The Legislature is nearing adjournment for this session and has just about completed work on several bills affecting the residential rental housing industry. Here is the status of some of the significant bills:
HB 2395. This Bill was first introduced as a "strike all" amendment on February 15, 2011. I first learned of it on March 17.
This is the Bill that will add a new section 33-1476.05 to the MHP LTA. It will allow people in age 55 parks that are converting to all age (family) parks to move out with assistance from the Relocation Fund should they choose to do so. Landlords would not be required to reimburse the Fund. The landlord would need to give a 60 day notice of the intent to change the age restriction status. Tenants would have 180 days to move after the notice of change in age restrictions is announced. There are problems with the bill.
First, it calls this a "change in use" yet the kind of change here does not fit within the definition of "change in use" that appears in section 33-1409 (5) of the MHP LTA.
Second, it does not address what happens if the tenant has a lease that runs beyond the period the tenant has to move under the new law. For example a tenant with three years left on a lease in a park that announces a change in age restrictions may want to move. While this new law will allow him to do so with Relocation Fund assistance, nothing in the new law or anywhere else in the LTA says that his lease will then terminate. He is required to give a 30 day notice of intent to vacate, however. This would seem to mean that he continues to be liable for space rent even after he relocates. Moreover there would seem to be constitutional problems with the new law if it had provided for termination of the lease at the tenant's option under these circumstances since a law cannot interfere with pre-existing vested private contract rights.
Third, the statute uses the term "mobile home or manufactured home". The MHP LTA includes "manufactured home" in the definition of "mobile home" and does not separately define "manufactured home" or use it anywhere else. In particular in the other provisions involving changes in use, the term "mobile home" is used. Using "mobile home or manufactured home" in this statute could create confusion and lead to unintended consequences since "manufactured home" is not separately defined in the LTA.
Fourth, I still think could be potential fair housing problems with this new statute, though the fair housing enforcement people I have talked to do not see a problem.
The Bill is on the fast track to passage but somewhat to my surprise got some significant opposition, especially in the Arizona Senate. I don't know why because I am not aware that there is any organized opposition and both landlord and tenant groups are supporting it.
SB1306. This Bill passed the Legislature and has been sent to the Governor for signature. This is the "Bedbug Bill". It applies to the rental of dwellings (possibly including park owned homes) and has been watered down. Essentially it pre-empts the field prohibiting local governments from legislating on bedbugs. It requires landlords to provide bedbug "educational materials" to new tenants, prohibits them from leasing units they know to have bedbugs, requires tenants not to move bedbugs into the unit and requires them to notify the landlord of any infestations discovered. The Bill excludes single family residences. Since the term is not defined, it may include park owned homes.
SB1160. This has been signed by the Governor and will be effective 90 days after the Legislature adjourns. It prohibits imposition of new municipal rental taxes unless approved by a public vote. It is directed at Tucson and other cities and towns contemplating raising rental taxes.
SB1423. This Bill is probably going to become law. It requires that sales of new mobile homes and used ones selling for more that $50,000 be closed through independant escrow agents much like single family homes do. Exceptions are allowed for parks selling their own homes which can continue to close on site sales through their dealership trust and escrow accounts provided they post a $100,000 bond with the FBLS Department. This law will become effective July 1, 2012 if it gets enacted. It is fairly complicated and can be reviewed here: http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/50leg/1r/bills/sb1423s.htm&Session_ID=102
April 15, 2010
The Media. From an e-mail forwarded to me today. Here's how to keep all that political "news" in perspective...
1. The Wall Street Journal is read by the people who run the country.
2. The Washington Post is read by people who think they run the country.
3. The New York Times is read by people who think they should run the country and who are very good at crossword puzzles..
4. USA Today is read by people who think they ought to run the country but don't really understand The New York Times. They do, however, like their statistics shown in pie charts.
5.. The Los Angeles Times is read by people who wouldn't mind running the country, if they could find the time -- and if they didn't have to leave Southern California to do it.
6. The Boston Globe is read by people whose parents used to run the country and did a poor job of it, thank you very much.
7. The New York Post is read by people who don't care who is running the country as long as they do something really scandalous, preferably while intoxicated.
8. The Miami Herald is read by people who are running another country, but need the baseball scores.
9. The St. Louis Post-Dispatch is read by people who want only the score of the Cardinals game. They drink Budweiser, Budweiser, and -- wait a minute -- what was the question?
10. The San Francisco Chronicle is read by people who aren't sure if there is a country or that anyone is running it; but if so, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped minority feminist atheist dwarfs who also happen to be illegal aliens from any other country or galaxy, provided of course, that they are not Republicans.
11. The National Enquirer is read by people trapped in line at the grocery store.
12. The Arizona Republic is read by people who have recently caught a fish and need something to wrap it in
April 13, 2011
Abandonments. I have revised and reorganized the Abandonment Page of this web site.
April 9, 2011
Possible Rogue Park Closure. I have been reliably told that a Phoenix MH park with large numbers of poor, elderly and disabled residents has sent out a 30 day notice to all of its tenants that it is closing and that they need to move. While I was not told the name of the park and have not seen any of the supposed closure documents the source is unimpeacheable. No mention was apparently made of the Relocation Fund or benefits available to residents forced to relocate.
My skin crawls when I hear of these kinds of events. Obviously the park owner has no idea as to what the law requires in order to close a park such as the need to give at least a 180 day notice and to advise of Relocation Fund benefits and procedures. And it does not appear that the park is doing anything to assist residents in finding a place to move.
Such assistance is not strictly required by the law but it has become a custom in the industry to do as much a possible to help people relocate by bringing in other parks to speak with them about what opportunities are available, and representatives of the State and industry groups to explain the process.
I am afraid we may be hearing about this in the media and the industry may be getting a black eye over it.
April 8, 2011
Homepage. Someone finally took a picture of me I actually like. While she didn't make me look 35 like I told her to, it still turned out good and I replaced the one on my home page with it. It sounds Narcissistic of me to brag about a picture, but when you're as old and ugly as I am, it is really a pleasant occurrence.
HB2395. I commented on this Bill on March 19. It provides a mechanism for tenants to move out of parks converting from Age 55 to all age status with assistance from the Relocation Fund. I was critical of this Bill. My views on it have not changed although I later learned that MHCA and AAMHO apparently had reached agreement on it. I was not in the loop on that.
I have discussed the Bill with fair housing law enforcement people and none of them seems especially concerned over it. So despite my dislike of the Bill and the underlying policies it represents, my legal concerns appear overblown.
My comments have angered some people including friends of mine, and that is regrettable. But this episode reflects the fact that despite my long standing loyalty to and association with MHCA, I am an independent attorney and not an MHCA employee. We do disagree on things from time to time.
But it would be well for everyone to bear in mind, as the opening sentence on this Blog states, that the views on this Blog are mine alone and do not necessarily represent those of any other person or organization.
Incidently, it looks like the Bill is on the fast track to enactment.
Fair Housing Event. I am participating in a Fair Housing Presentation being put on by the Arizona Attorney General's Office on Tuesday, April 12 in Phoenix. The subject is "The Cost of Fair Housing". It is open to the public though there is a charge for it ($15 in advance or $20 at the door). This brings together experts from the private sector and the Attorney General's Office and will deal with current fair housing issues. I expect a large percentage of the session will be devoted to disability issues which are perhaps the most difficult ones facing residential housing providers these days. Information is on my Seminars page. A link to register is here: http://www.regonline.com/Register/Checkin.aspx?EventID=944997
New Budget. According to press reports the Governor has signed Bills implementing new budgets for the remainder of this fiscal year (expires June 30) and the next fiscal year (July 1, 2011--June 30, 2012). I have scanned what I can find on it and can't find any changes from earlier proposals insofar as agencies and programs I am concerned with are concerned.
The FBLS Department, MVD and Attorney General's Office are largely unaffected. So Fair Housing investigations at the AG's Office will continue; the MVD will keep current funding and staffing levels though outsourcing of many activities we are concerned with is going to continue; and the FBLS Department will continue being subsidized by the Relocation Fund and its operations and staffing will continue as before.
Inflation. Inflation figures so far this year are exploding in Arizona, at least insofar as costs for food and gasoline are involved. The real cost of living here is rapidly increasing. Yet Government CPI indexes that are used to measure "official" inflation exclude food and gasoline. So those figures show inflation is nothing to worry about. Since those numbers are used to calculate Social Security increases, the net effect is there will not be an increase in Social Security benefits next year--the third year in a row.
The net effect is that seniors on fixed Social Security based incomes are not going to get any increases, while their real cost of living is starting to skyrocket. Even those with investment income are having a hard time since interest rates are so low thanks to other federal policies.
This is certainly something to consider by landlords considering rent increases.
ALJ Cases. When times get tough we start seeing more of these cases being filed. Also the character of the cases changes. The case filed by the unhappy individual gets replaced with the petition filed by large numbers of tenants. This past week I represented a park in a case with so many people that it had to be moved to an auditorium to accommodate all of the complainants.
Having a lot of people show up for hearings does not affect the ultimate outcome. But it is indicative of the unhapiness of tenants in those communities with their landlords. Many, perhaps most times, what motivates the case is anger over rents and other fees being charged by landlords. Since many of these issues are outside the scope of what ALJ's can rule on, a variety of other complaints are invented, largely to "get back" at the landlord.
Parks should never take these things lightly. They must be responded to in writing within 20 days or the landlord will find he is the subject of an order entered by default. And be careful what the response says because there is no backing off what has been admitted.
Finally, if the complaint involves calculation of utility rates, ALJ's have limited authority to review those and order refunds of excessive utility charges. These are very complicated cases with potential big money consequences. You should always be represented by knowledgeable legal counsel in these.
April 2, 2011
New Articles. I have just posted four new articles on the MHC L-T--Articles page. They are the top four.
March 31, 2011
Medical Marijuana. The Arizona Department of Health Services has published final rules on licensing users, caregivers and marijuana dispensaries. The Department has also set up a medical marijuana web site: http://www.azdhs.gov/prop203/index.htm
Licenses will be issued soon to users and caregivers. Applications can be submitted beginning in June. But dispensaries will not be open until the end of the year. The DHS regulations therefore will allow all cardholders to grow their own until a licensed dispensary opens up within 25 miles of their home. But in order to grow their own, it must be grown in a secure indoor locked facility accessible only to the card holder, or if grown outside, in an area enclosed by 10 foot high solid stone, concrete or metal walls with a one inch thick metal gate.
Parks are unlikely to see card holders growing the stuff in their back yards but some may try to grow it inside their homes.
I have written before on the dilemma landlords face here. The new law says landlord cannot refuse to rent to someone because he is a marijuana card holder. But it does not say the landlord must allow the card holder to grow or use the stuff on site. Possession and use remains a federal felony (though they won't be prosecuted by the Feds for now) and it remains a violation of the Crime Free Addendum.
HUD has released an opinion that fair housing laws don't require landlords to permit use as an accommopdation to a resident's handicap despite the issuance of the card by DHS.
Landlords need to make a policy decision whether to permit use of marijuana on the premises. In my view ALL landlords should prohibit it in the common areas or anywhere outside of the tenant's home. The landlord needs to decide whether to continue prohibiting its use inside the home or allow it despite the Crime Free Addendum and the fact that it remains a federal felony. If the decision is to prohibit it a notice to that effect should be sent out to all residents.
And given how soon cards are going to be issued, those decisions need to be made soon.
March 29, 2011
Abandonments. An analysis of traffic on this website reveals that nearly half of the visits involve abandonments--people checking to see what the law is on abandonments or what to do when a home is abandoned. Although I know this is perhaps the biggest problem in the industry right now, that percentage surprised me.
I will probably expand and simplify the Abandonments page in the next few days given the interest in the subject.
Rage. Maybe its just a sign of the times. But I am seeing more cases of irrational anger in parks than at any time in my career. People fly off the handle with little or no provocation. In a time and location where firearms can be legally carried by virtually anyone, its only a matter of time before someone gets badly hurt.
Just in the past couple of days, a tenant was given an immediate termination notice for threatening and chest bumping a park owner over a minor issue. An eviction was filed. The tenant showed up at court with an equally irrational and angry lawyer and both made a variety of threats. One would think that faced with eviction and probable loss of his home, the tenant would at least show some remorse but anger trumped all other feelings.
A tenant in another park seeing an offer for free Wi Fi service to RV space tenants came to the office and demanded as his right, free Wi Fi service for himself as a MH space tenant. The manager tried to explain it was a promotion solely for RV spaces but the tenant was insistent and became extremely loud and angry, refusing to leave the office. He too is risking his tenancy and possible loss of his home by refusing to control his irrational anger.
An ALJ hearing with over 50 tenants erupted into a near riot when tenants saw that the Judge was going to listen to both sides of the case--not just theirs. The hearing had to be adjourned and rescheduled to another date when most of the tenants walked out.
Not a day goes by that I am not contacted by managers about angry tenants harassing them over some of the most inconsequential things imaginable. Many of these managers react by becoming angry themselves and much of my time is devoted to trying to calm them down.
Times are hard for many people, especially retirees on fixed incomes. We have just learned there will be no cost of living increase in Social Security for a third year in a row despite huge increases in the cost of food and gas. And landlords are being forced to increase rent on these folks to cover thier own expense increases. It is no wonder tensions are high. But what I am seeing is bordering on violence and I am seeing it all over.
March 26, 2011
Abandonments. At a manager training class in Tucson yesterday I saw again how many homes are being abandoned all over this State. Most managers know not to just ignore the problem but to instead start a landlord lien sale procedure to get the home disposed of. But there are still a lot who are not aware that this process exists. Since they don't know what to do, they do nothing.
In addition, many knowledgeable managers are being contacted by lienholders who promise to pay. But the check never shows up. Meanwhile the lienholder tries to sell the home. In effect the lienholder is using the park to finance the storage of the home on an interest free basis. In many of these cases, the home is of marginal value and if pushed to make a decision on whether to pay the rent or walk away from the home, the lienholder will walk away.
By accepting the lienholder's empty promises to pay, the park is giving it a chance to try and sell the home while storing it for nothing. That is a foolish decision.
Even if a lienholder promises to pay, if the check does not promptly arrive, the park shold initiate a landlord lien sale procedure. When the sale date approaches (about two and a half months later) the lienholder will be forced to decide whether to pay or abandon the lien.
ALJ Complaints. When times get tough, we tend to see an increase in filings of ALJ complaints by tenants against landlords over financial issues. Most often the complaints involve landlord calculations of utility charges. The current financial downturn is no different.
I am seeing an increased number of ALJ filings challenging landlords over how they calculate trash and sewer charges. Some of these involve landlords with septic systems charging for sewer service, some involve trash charges when the trash collection service is not the same as what the local trash collector offers; and some involve the failure of landlords to honor service charge suspensions when tenants are out of town.
Essentially, the MHP LTA requires landlords to provide for sewer service and trash removal. It does not say what the terms of service must be. As long as trash and sewer serveice is adequate the legal requirement is satisfied.
Separately, the law allows parks to charge for this at the same rate as the local utility provider charges its single family residential customers. it does not say that in order to do so the conditions of service must be the same. In my view (and the view of many ALJ's in past cases), as long as sewer service is provided (even with septic systems) and as long as trash is removed (even with central dumpsters, not curbside cans), the landlord can charge up to the single family residential rate.
But when the local provider allows customers to suspend service and suspend being charged, the park must also do that since in that situation the single family residential rate is Zero.
Be very careful in calculating utility charges. Times are tight and tenants are being financially squeezed. If they believe their landlord is overcharging them for utilities, they will not hesitate to file an ALJ complaint.
March 22, 2011
Manager Training. My last basic training class for park managers until September is scheduled for Friday in Tucson. I am scheduled for one more this year in September in Yuma. I doubt MHCA will schedule any more for me this year so if you want or need to get trained on landlord tenant laws and fair housing laws as they relate to MHC's, contact MHCA at (480) 345-4202 to get signed up.
Neal Haney will be conducting a couple of classes this year on park management, and I will be at both the Phoenix and Tucson Conferences but those sessions are not the basic training that new managers, in particular, need.
MHCA Conference. This is scheduled for May 11-13 in Phoenix. I will be conducting a number of seminars including medical marijuana in parks, repossession of mobile homes by lenders, abandonments, RV laws, and have created a really tricky and, hopefully entertaining "You be the Judge" program. There are of course many other presenters and it will be a worthwhile event. Contact MHCA to register.
March 19, 2011
FBLS Department. As far as I can determine the new proposed budget released by the State Senate that cuts a whole lot of agencies and programs does not affect the FBLSD. The original budgeted spending levels remain the same and it remains or track to suck another $682,600 out of the Relocation fund this fiscal year and next. That's an improvement over the $899,900 it drained from the Fund last year. See for yourself on page S-35 of the Baseline budget book of the Joint Legislative Budget Committee. http://www.azleg.gov/jlbc/12book1/12BaselineSingleFile.pdf
HB2395. I just discovered a new bill that AAMHO appears to have engineered that is somewhat disturbing to say the least. MHCA appears to have agreed to it as well.
HB2395 would allow tenants in age 55+ parks to move out if the landlord converted to an all age community and receive assistance from the Relocation Fund the same as if it was a change of use. Landlords, however would not be required to reimburse the Fund.
What I find disturbing is that I believe it is unlawfully discriminatory under Federal and State Fair Housing Laws. These laws prohibit discrimination in housing on account of protected class. There are seven protected classes including "familial status". An age 55+ park is allowed to exclude families with children provided they satisfy the criteria necessary to be an age 55+ community, mainly by keeping occupancy by age 55+ households over 80%.
When a park decides to cease being an age 55+ community, it is essentially deciding to stop discriminating against people on account of "familial status". In other words it will begin renting to families with children and remove any restrictions not involving health and safety on children using park facilities.
Because a park is going to honor Fair Housing Laws by not discriminating on account of "familial status", this bill would provide a mechanism for people unhappy with the cessation of this discrimination to leave and for the State of Arizona to subsidize their departure. This is reminiscent of the "White Flight" we used to see in the '60's and 70's when formerly all White neighborhoods were required to allow Blacks and other minorities to move in by these very same Fair Housing Laws, except here, the flight would actiually be underwritten by the State.
I believe this amendment to the MHP LTA could be stricken down by the Courts as imposing penalties on landlords and impeding them from deciding to stop discriminating againhst a protected class. The penalty is a loss of current residents resulting from the availability of a State subsidy to relocate should a landlord convert to all age status. The impediment is the extra paperwork and notification processes imposed on landlords by this law should they make the determination to convert. While I don't know if anyone would be sufficiently motivated to challenge the law in Court, it is certainly vulnerable if challenged.
Here is a link to the bill: http://www.azleg.gov/DocumentsForBill.asp?Bill_Number=hb2395&Session_Id=102&image.x=13&image.y=3
HB2140. This is the firearms bill I have written about before. In my view by forbidding landlords from restricting firearms in communities, this bill would result in many becoming more dangerous places. As far as I can see this bill has gotten stalled in the legislative process and at this point it does not appear to be going anywhere. Here is a link to it: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/50leg/1r/bills/hb2140h.htm
Utility Charge Furloughs. Summer is approaching and snowbirds will soon be leaving. When they leave, in an effort to save money, many will ask that their utility charges be suspended for the summer.
Parks that separately charge for utilities including water, gas, electricity, sewer and trash, may not exceed the single family residential rate of the local providing utility. If that utility allows its single family customers to suspend service and charges, then the single family rate for that period is ZERO. The net effect of this is that parks charging separately for a utility need to check on the single family residential rate of the local provider of that utility service and see if it permits suspensions. If it does, then the park also must do so.
If the local utility provider has rules requiring notices and requires payment of disconnect and/or reconnect fees, then the park may also do so.
Even in parks charging less than the single family rate, if the local provider allows for service suspensions, the park must do so as well. As Clare Boothe Luce said, "No good deed goes unpunished".
March 12, 2011
ALTA. The Arizona Landlord Tenant Attorney Association has established a website. Lawyers around the State are welcome to join; there is no charge. This group is unaffiliated with the State Bar. It sought to have a landlord tenant section created by the State Bar several years ago but was turned down since landlord tenant work was not sufficiently important. That same year the State Bar established the Animal Law Section.
There is no charge for belonging to ALTA and it offers frequent CLE classes, also without charge for members.
Here is a link to the website: http://www.wix.com/evictions/alta
LTA Outlines. I have just created two pages explaining generally how MHP and RV space landlord tenant laws work. These are quite brief. They are intended mainly for judges, constables and the attorney infrequently handling a case involving these sorts of tenancies. The two summaries have their own links on the menu bar at the left.
March 11, 2011
Abandonments. We keep hearing from parks that have either recently changed hands or replaced managers, that large numbers of abandoned homes are being discovered. Evidently a lot of park operators are turning a blind eye to abandoned homes. Either they don't know what to do or just don't want to deal with it.
Lienholders take advantage of this by not paying rent while they try to market the home, forcing the park in effect to finance their repossession operations with interest free loans (indefinite deferrals of space rent). All too often, when finally forced to decide what to do the lienholder just walks away from the home leaving the park holding the bag and still forced to dispose of it.
It is simply crazy to ignore abandonments. Prompt action can force lienholders to pay or walk away promptly and will minimize the loss of rent on the spaces with these homes sitting there. Landlord lien sales are the remedy but they take a minimum of 72 days to conclude and can be complicated.
We do lots of them and it normally costs around $500 to complete the process. Money no one wants to pay, perhaps but there is considerable work involved and the alternative is to keep losing rent on the space while the home sits there.
Whatever you do, do NOT just ignore the problem. It won't just go away.
Guns. It looks like the bill to force landlords to allow open carrying of firearms in their communities is dead, for now at least. There are tricks in the legislative process that can bring a bill back to life any time before the legislature adjourns. But that seems unlikely to happen here.
I think every park should address firearms in their rules and regulations. The norm is to allow guns in homes and tenant cars, and to allow them to be carried back and forth between car and home unloaded, but not to otherwise allow them outdoors in the park or in the community facilities. An exception should be made for law enforcement personnel.
While you're at it, also address fireworks. A state law enacted last year allows them in a limited way. Parks should absolutely prohibit their use on the premises since homes are so close together and can be extremely flammable.
In sum, it may be time to review and update park rules.
Medical Marijuana. At least one attorney representing landlords seems to believe that the new medical marijuana law prohibits landlords from discriminationg against card holders.
To an extent this is true. A landlord cannot discriminate against someone for the reason that he holds a medical marijuana card. But the law does not say that the landlord must allow marijuana use on the premises by card holders or anyone else. As I wrote last week, whether to do so or not is a question each landlord must answer for himself, and it is a difficult one to answer.
Whatever the decision, it too should probably be addressed in new revisions to park rules.
March 5, 2011
Medical Marijuana. I have written about this before. Last year a voter initiative was passed having the effect of adding a series of statutes to Arizona law legalizing the use of marijuana by persons holding cards issued by the State authorizing its use. The use must be in accord with restrictions in the law. No more than two and one half ounces can be possessed, and it must be purchased from licensed dispensaries (though cardholders more than 25 miles from the nearest licensed dispensary are allowed to grow a limited amount for their use).
While the initiative makes cardholders immune from prosecution under State law, possession or use of any quantity of marijuana remains a felony under federal law. The fact that federal authorities have decided for the time being not to prosecute card holders for marijuana violations does not mean they are not committing federal felonies by possessing or using the stuff.
The State will start issuing user cards and licensing dispensaries sometime in April.
Landlords need to decide how to treat marijuana use on their properties by the holders of medical marijuana cards. There are two options.
First--treat it as lawful provided the user has a card and as far as the landlord knows is using it in compliance with State law. The effect of this is that the landlord will be turning a blind eye to the commission of a federal felony on its property. In addition, the use of medical marijuana violates the standard crime free addendum to rental agreement many landlords use which prohibits violations of the federal Controlled Substances Act, the law making marijuana possession and use a federal felony. By choosing to allow use by cardholders on the premises the landlord will be waiving the ability and, perhaps, the obligation to enforce the crime free addendum. Even here, use should be limited to the cardholder's home and still prohibited in public areas.
Second--Treat it as a violation of the crime free addendum notwithstanding possession of a card and terminate the tenancy and evict for violation of the crime free addendum. There seems to be nothing explicit in the initiative prohibiting evictions for use by cardholders. The thrust of the new law is to immunize users from criminal prosecution, not civil sanctions like evictions. But such a policy would be inconsistent with the spirit, though not the wording of the law.
This is kind of a Hobson's choice for landlords. Damned if you do, damned if you don't. But landlords are going to need to make these decisions very soon.
I taught a seminar on medical marijuana this past Friday for landlord-tenant attorneys and judges and there were a number of contradictory views. The impression I got was that some judges would regard use by cardholders as cause for immediate termination and eviction since it remains a federal felony. A few indicated they could not imagine granting an eviction of a cardholder using the stuff in compliance with the law.
One judge said that he would not agree to an eviction of a cardholder who was blindsided, and who believed that issuance of the card coupled with media coverage of the issue meant that use in general by him was lawful. There is a lot of merit to that view. Most cardholders have good reason to believe that this law completely legalizes marijuana use. That judge said before he would entertain an eviction for use by cardholders, he would like to see a notice from the landlord to all residents explaining that the medical marijuana initiative does not alter the fact that marijuana use is a federal felony and a violation of the crime free addendum, and that possession or use on the premises will result in eviction despite possession of a card.
Landlords electing to treat use by cardholders on the premises as violations should consider putting such a notice out and delivering copies to all residents soon.
Landlords electing to regard use by cardholders in their homes as not constituting eviction offenses should at least publish something saying that public use of marijuana in the community will nevertheless constitute an eviction offense. Even the initiative makes it clear that public use by cardholders is not authorized.
Landlords electing to allow use by cardholders in violation of federal law also run the risk that they may be found to have allowed criminal activity on the premises in violation of the slumlord laws (ARS 12-991) and may be subject to sanctions under those laws. Attempting an eviction even if unsuccesful of a person committing the crime is a defense to an action to impose sanctions for violation of slumlord laws.
March 2, 2011
Lease Renewals. Occasionally I get calls from managers saying tenants are refusing to sign new rental agreements despite the park requesting it. The MHP LTA at section 33-1413 (H) says that either the landlord or the tenant can request a new written rental agreement when the current one expires. It can be for any term the parties agree but if they can't agree it will be for one year. In essence this means either landlord or tenant can demand a one year renewal written rental agreement and the other must sign it when a lease expires.
The rent of course will be set by the landlord in a 90 day notice. If a 90 day notice is given but the rental agreement expires before the 90 days is up and the tenant has demanded a new one year agreement, the rent will be at the old rate until the 90 day notice would be effective and then the rental agreement should say it will escalate to the increased amount at that time.
So what happens if the park requests the new rental agreement but the tenant refuses to sign? Section 33-1483 (B) allows the landlord to evict the tenant as a holdover since the tenant would remain in possession of the space without the landlord's consent after the expiration of the old rental agreement. The tenant should be told in writing that if he refuses to sign the new one or vacate, he will be evicted if that is the park's choice.
The other choice the park can make is to just let the tenant have his way and treat him as a month to month tenant.
Tenant 30 Day Notices. Section 33-1451 (A) (6) allows a tenant to vacate the park by giving a 30 day notice which must be given at least 30 days before the expiration of the rental agreement. This has the effect of terminating the tenancy provided the tenant is out by the effective date and returns possession of the space to the landlord.
What happens when the tenant vacates but leaves the home there?
If the tenant's home is left behind, he nas not returned possession of the space to the landlord since the space continues to be occupied by the tenant's property. It will take the park several months to dispose of the home unless a lienholder repossesses it and takes over paying the rent. During the time it takes the park to dispose of the home (usually by way of a landlord lien sale), the tenant is still liable for the rent. The 30 day notice is ineffective since possession of the space was not returned to the landlord. And the tenant's security deposit can be applied to rent coming due after he vacates.
It is not uncommon to see tenants demand their security deposits back after moving out following a 30 day notice. If the home is left behind, they still owe rent and the duty to account for the security deposit has not been triggered since the tenant is still in possession of the space.
February 25, 2011
Bedbugs. They are tiny and infest places where people live. They do not seem to carry diseases but they bite and their bites are painful and itch. They have become resistant to chemicals that used to be able to kill them and thanks to environmentalists, the chemicals now used are not nearly as powerful as before.
As a result, bedbugs are becoming a major problem. In humid environments including major coastal cities, it is common to read about stores being closed due to bedbug infestations, and legislatures in many parts of the country have been considering laws saying who is responsible for dealing with them.
A bill is now going through the Arizona legislature that will require residential landlords to take steps to eradicate bedbugs when found in apartments and other dwellings covered by the Residential Landlord Tenant Act. That can be a real problem since it is tenants who are bringing them in. However, once bedbugs are in an apartment they can easily spread to neighboring units. While MHC's are mostly unaffected by this law, those that rent park owned homes will be.
In addition, parks getting title to homes by either surrender from tenants, landlord lien sales, or purchases from lienholders will need to be sure they are free of bedbugs (and other vermin) before selling or renting them.
Finally bedbugs can be easily spread. People can pick them up at hotels or overnight guests can bring them into tenant homes. Those tenants in turn can bring them into the clubhouse. One source of bedbugs can be junk furniture or matresses thrown into the trash area.
Parks need to act to eliminate bedbugs when discovered and take reasonable precautions to prevent them from infesting the community.
Guns. I support the Second Amendment and believe the right to be free from government restrictions on possession of firearms is an important right. Some, however, want to take the right of individuals to possess guns and use it to restrict private landlords from limiting firearms on their property. Constitutional rights mean protection from governmental interference in the exercise of those rights, not from a private property owner limiting the exercise of a right on his property. And there are other constitutional rights protecting private property owners from government interference.
A bill has been introduced in the Arizona legislature that may well get through in some form. The bill purports to prohibit a private landlord from restricting tenants in the carrying and use of firearms (so long as the use is lawful) on the landlord's private property. This legislative extension of the right to bear arms onto the property of landlords that may want to limit the right on their land goes beyond what the Constitution requires and in fact violates the property rights of landlords by opening their land up to the unwanted display and use of firearms when they don't want that happening.
MHCA and the AMA are negotiating with the Bill's proponents to scale it back and not unduly encroach on the rights of the landlord/landowners who will ultimately be subject to it.
February 19, 2011
Economic Collapse? Read this. I think it makes a lot of sense. http://theeconomiccollapseblog.com/archives/do-the-wild-teacher-protests-in-wisconsin-foreshadow-the-economic-riots-that-are-coming-soon-to-america
February 18, 2011
Age 55 Community Problems. Note that I call them "problems", not "issues".
We are seeing two recurring situations in Age 55 + Communities that indicate worsening environments in them.
First, we see an increasing number of abandoned homes in these parks. And it is not just mobile home parks but RV parks as well. In the past it was rare to see a snowbird abandon a park model in a high end "RV Resort" but we are getting an increasing number of them in these days. People who own units in Age 55 + Communities are not getting any younger and as they die or become incapacitated, their units become abandoned. Often they have no close relatives or their families simply have no interest in taking the vacant units over. Since the units are usually free and clear there is no lienholder to call on. The result is that the unit is abandoned and the park is forced into proceeding with a landlord lien sale to dispose of it.
Second, we are seeing an increasing rate of evictions in these communities. These fall into two categories.
One is where due to advancing age and perhaps underlying medical problems, the resident becomes hostile, perhaps suffering from dementia or Altzheimers Disease. Since so many residents of these parks are far away from family or have completely alienated their family members, there is no one to step in and take control of them. The result is that their conduct becomes intolerable and sometimes dangerous to others, forcing the park to evict them.
The second is that many are living on fixed incomes and have seen investment income shrink as interest rates on CD's fall to near zero. Couple this with a lack of any Social Security increases the last two years while Medicare expense rises. and you can see that these folks are having to absorb inflationary increases in the cost of everything while getting no increase in income. More and more, tenants are falling behind in their rent as a result. This is compounded when parks increase rents or unbundle and begin separately charging for utilities. As a result of these factors we see more and more non payment of rent evictions in Age 55+ Communities.
It is not uncommon to see Age 55+ Communities convert to all age communities in an effort to fill vacancies they are unable to fill with age 55 + residents since fewer and fewer qualified people want to live in them. It is also not unusual to see parks that do not convert suffer with high vacancy rates. Higher vacancy rates mean fewer tenants paying rent. Since park expenses stay the same, parks are forced to raise rents for tenants who remain. That's a vicious circle since the rent raise may in effect force more residents out.
I don't have any solutions but do have a couple of suggestions. First, try to keep rent increases to a minimum. Try to keep from loading on additional fees in an attempt to enhance profits. When tenants fall behind, try to meet with them to see if the park can't help, either with plans to catch up or referrals to local churches or social service agencies. Finally, don't turn a blind eye to the situation and let a tenant get in a deep hole before referring the case for eviction. Sometimes filing an eviction before the tenant gets too far under can force him to deal with the situation while he can still afford to dig out.
Finally, if a unit is abandoned, Don't just ignore it and hope the Tooth Fairy will make it all good. She won't and you will eventually need to deal with it. Dealing with an abandonment promptly lets you get the unit resold and the space re-rented as promptly as possible and in the long run saves money.
February 14, 2011
Bullhead City Training. Due to a family medical situation I will not be in Bullhead City on Friday to conduct the MHCA training program. Neal Haney will be substituting for me. It does not involve me but a member of my family.
February 13, 2011
Contents of Abandoned Homes. Recently I have had some cases arise where managers have refused to let ex-tenants get their furnishings and personal effects out of abandoned mobile homes following landlord lien sales resulting in the park getting title to the home.
The park's landlord lien applies only to the abandoned mobile home itself, not to the contents. ARS 33-1480 specifically states that a landlord has absolutely no lien against the tenant's household goods. Any park manager simply trying to keep a tenant's goods and belongings is doing so wrongfully and the conduct might be criminal.
When a home is abandoned the park has no right to enter it as long as it is not titled to the park under ARS 33-1453 (A). Only after a landlord lien sale resulting in transfer of title to the park does the park have the right to enter. When entering the home for the first time, the manager should bring a camera and a witness. If there is anything of value, the contents should be photographed and then an inventory should be prepared.
Since the park now owns the home and the tenant's belongings are in it, the procedures of the Residential Landlord Tenant Act at ARS 33-1370 should be followed. This entails posting a couple of notices on the home, sending them by certified mail to the former tenant at his last known address, and then, if the goods are not reclaimed, publicizing and conducting another auction, this time of the contents of the home.
Since the park has no lien against these contents, the only thing that can be deducted from the sale proceeds are the expenses of sale. Any excess must be given to the former tenant or, if he cannot be found, the State. The park will typically bid in the expenses of sale as an opening bid. If no one else is there, the park will wind up buying the goods for that amount and can then dispose of them.
I have been doing landlord lien sales for over 20 years and until recently, managers seemed to know that if there was stuff left in the home, it was not theirs. But in the last few months, a few managers have somehow gotten it in their mind that when they get the home, they get the contents. That is not true.
If a former tenant ever wants to get his stuff out of the home before the park has completed the process I have described above, let him! Having him remove that stuff is far better than for the park to need to dispose of it as I have described.
Our office can prepare the paperwork and schedule the sale of the contents at a nominal cost.
February 9, 2011
Abandonments. We continue to see these in large volumes. We are in the process of sending postcards out to parks across the state promoting our abandonment services since so many of them are not clients and since we don't know of anyone else that can do this work, certainly not in the volume we do it or for the price we charge. These postcards are meant for parks that do not know what to do with their abandonments and there are hundreds of them across the state. If you are using us but get one anyway, I apologize in advance for helping fill your mail box with unnecessary paper.
Repossessions. For the same reason as parks are seeing abandonments, those that finance their own home sales are also seeing the need for more and more repossessions as tenant-buyers stop making home payments. We handle repossession paperwork and, when necessary litigation (which we try to avoid) on behalf of parks and also for a few commercial lenders where there is no likelihood of conflicts of interest with parks.
Co-Ops. There are actually a few RV parks around that are co-ops. In a co-op, a corporation owns the land and sells ownership shares in the cooperative. Each share entitles the shareholder to the exclusive use of a space. Often the share owners will hire the co-op or a management agent to rent their RV spaces when they are not going to be in town. When the RV space gets rented, landlord tenant laws come into play. If the space is rented under a rental agreement for over 180 days (including a verbal agreement where, for example six months rent is paid in advance), the Long Term RV Rental Space Act comes into play. If for less than that, general landlord tenant laws apply to the tenancy.
The tenancy can be difficult to terminate if the RV Act applies but not if the general laws apply. Any RV space owner in an RV co-op should be careful not to rent for a period longer than five months at one time.
Legislative Session. The Legislature is now in session and hundreds of bills have been introduced. It looks like not many new immigration bills are going to make it through. But there are a large number of bills having to do with gun rights that are being considered. One of them would prevent landlords from unduly restricting firearms in rental communities including MHP's.
Mark Zinman of our firm is on the AMA Government Affairs Committee and monitors bills as they affect the apartment (and park owned home) rental industry. I work closely with MHCA and its lobbyists monitoring bills affecting MHP's and RVP's. When it looks like a bill may get through, we will determine if it will hurt landlords and if that is likely, we will try to get it revised to eliminate our problems with it.
This is the time of year these landlord associations (AMA and MHCA) really prove their value. People have no idea of the battles that go on behind the scenes as these organizations fight to preserve the rights of their industries.
As the session gets further along, I will alert you in this blog to some of the specific bills that may impact you.
February 4, 2011
Red Flags Rule. The federal Red Flags Rule has been in effect since January 1, 2011. All parks should have a Red Flags Compliance Program in force, signed, and on file in the park. This plan spells out measures adopted by the park to prptect sensitive resident data and to prevent identity theft.
Parks without such plans face significant federal penalties. In addition, if a resident or applicant is a victim of identity theft that can be traced to inadequate data protection by a park, the park can face serious legal liability.
MHCA has a new Red Flags compliance publication for sale. I wrote it and presented it at the MHCA October Conference in Tucson. In addition our firm can help put such a plan together.
Manager Incompetence. I have been seeing instances where manager incompetence is costing park owners. This is especially serious where managers get into personal battles with tenants.
Every park has at least one tenant whose main joy in life is tormenting his manager. The competent manager will just ignore the tenant--turn the other cheek. But unfortunately some managers just can't do that. Instead they allow themselves to get drawn into battle with the tenant. The result is often unlawful or at least ridiculously expensive conduct that the park owner is ultimately responsible for.
In one case recently, after evicting the tenant from a home the park wound up owning, the manager would not let him get his stuff, including furniture out if it,. She planned on renting the home furnished with his belongings, and just could not bring herself to backing down and letting him get his things. Under the law, of course, the landlord has no claim against the tenant's household goods. Her anger at this tenant interfered with her ability to do her job and exposed the park owner to liability to the tenant. The fact that the tenant deliberately provoked this reaction is no defense to the manager's conduct.
In another case, a tenant filed an appeal after being evicted. While the appeal dragged on for the 60 to 90 days they take, the tenant engaged in a non-stop battle to harrass the manager. The manager's reaction was to insist the park lawyer "do something". When the lawyer told her to ignore the conduct until it truly became serious, she went to the owner and whined so much that the owner insisted the lawyer "do something". The resulting legal maneuvers wound up costing the owner a lot of money and produced no results other than further empowering this clearly evil tenant into increased provocative conduct. By continually rising to the tenant's bait instead of ignoring it, the manager cost the owner lots of money and only made the situation worse.
Managers have to learn to deal with these situations or get into a new line of work. Owners need to keep an eye on managers and not let these situations get out of control. Owners who simply abdicate all responsibility and turn the park over to the manager with no feedback or control are just as much to blame for these messes as the manager.
Finally, especially for managers living in the park, the job is terribly stressful. Owners meed to be sensitive to this and periodically provide coverage so the manager can get away for a few days and decompress.
February 1, 2011
Greentree and Other Lienholders. Management of Greentree's repossession operation in Arizona changed a few months ago. Unfortunately the new management seems to have gone back to the way that Greentree and its predecessors did business back in the 1990's.
First, I am told that Greentree will market repossessions and no longer will give parks an opportunity to match or outbid the highest third party offer in an effort to keep the home in the park. That means if a park is interested in keeping the home there, it better make its best bid at the outset and not expect an opportunity to bid against any other bidders. Its possible that individual parks with good relations with Greentree will still get that opportunity but it can't be counted on.
Second, Greentree still wants parks to allow rent to accrue, to be paid when the home is sold. But now they are deciding later to walk away from the loan and the home in some cases without paying the rent. Moreover, when the home sells, they tell the buyer to pay the park the rent owed, and buyers often try to get out of paying anything. Greentree simply washes its hands of the matter in many of these cases.
Third, out of respect for the fact that Greentree is so large and reputable, many parks simply wait to get paid and sometimes wind up getting nothing instead of immediately initiating a landlord lien sale. Eventually, if Greentree walks away, those parks have added to their losses by allowing additional months' rent to accrue and still need to do the landlord lien sale.
So what should a park do? If there is an abandonment, immediately identify whether there is a lienholder and if there is, give it an abandonment notice by certified mail using the MHCA Blue Book form. If arrangements are not immediately made to pay the rent or sell the home to the park, promptly initiate a landlord lien sale. This process will take at least 72 days, giving the lienholder ample opportunity to sell the home. But once the sale date is imminent, the lienhholder will be forced to decide whether to keep the lien and bring rent current or walk away. The decision is often to walk away. This way, at least the park has cut its losses.
This should be done in all cases, not just with Greentree liens. The new Greentree problems simply exemplify the need for parks to act promptly to protect their interests.
One other point. A number of parks see that the home is in really bad shape and put off starting a landlord lien sale because they don't want to get the home back and hope the lienholder will take care of the problem. The worse shape a home is in, the less likely the lienholder is to be able to sell it to someone else or to repossess it. The message here is that when a home is in really bad shape, the park should immediately start a landlord lien sale because it is unlikely that anyone else is going to take the home over. While the park certainly does not want it, it is going to eventually be forced to take it over since no one else is going to. The faster it gets done, the more the park's ultimate losses will be minimized.
January 29, 2011
Medical Marijuana. On January 20, 2011, the General Counsel of HUD released a memorandum to the HUD senior staff advising that landlords need not honor requests for reasonable accommodations by residents with state issued medical marijuana cards to possess and use marijuana in states with medical marijuana laws. HUD is the federal agency that enforces federal fair housing laws and the General Counsel is its chief legal officer.
The memorandum recognizes that possession and use of marijuana by authorized holders of cards issued by the Arizond DHS is lawful under state law. But it remains a felony under federal law. Expecting a landlord to permit commission of federal felonies on its premises is not reasonable and thus not required under provisions of the Fair Housing Act requiring housing providers to grant reasonable accommodations for disabled persons.
Evidently landlords may safely continue to enforce crime free addendums and other rules prohibiting marijuana on the premises despite claims by disabled people holding state medical marijuana permits that they need an exception to be able to use it on the rental premises to treat their disabilities.
Bullhead City Training. I am scheduled to conduct a manager training class in Bullhead City on February 18. But no one is signing up. If you want to attend, contact MHCA within the next week. If people don't start signing up the class will be cancelled.
Glendale Utility Charges. The City of Glendale several months ago changed the rules to make the rental property owner contract for city services (primarily water and waste water), not the renter. Now they are reversing their decision. On January 25 the City announced it is going to reverse its policy and allow renters to contract directly for city services. It is also going to do an across the board increase in the required deposit from $150 to $200. Owners will have the ability to get the deposit back after a year of service but renters will not get the deposit back until they close the account.
Constable Training. I spent two days last week conducting training sessions for Arizona Constables and civil sheriffs' deputies from all across the State. Much of my time was devoted to enforcing writs of restitution to remove residents following their eviction from mobile home parks.
I heard a lot of stories about park managers trying to get a Constable to do something improper by misquoting me and using that to convince the Constable. Unfortunately for those managers, I know most Constables in the State pretty well and speak with them all the time. Managers are not going to get very far trying to get their way by lying to a Constable about what I say.
Our Constables are sharp and quite well trained. Don't treat them like fools.
January 22, 2011
Training. Once again my only Phoenix area basic MHC manager training class is scheduled for Friday, January 28 in Glendale. See my January 9 entry for details.
SAFE Act. It appears the SAFE Act is going to be enforced to require parks selling and financing mobile homes to be licensed by the State Department of Financial Institutions. This is very expensive, difficult and time consuming and many park managers may never be able to get licenses. It seems silly but due to the sloppy way the Act was written, it seems to require people placing loans against all "dwellings" including mobile homes will need to get licensed. It is a Federal law that requires this.
MHCA wants to join with California and another State to lobby Congress for a change in the SAFE Act to allow mobile home loans by park landlords selling homes not to be covered by the law. It seems like there is a good opportunity now to get this done. But a Washington DC lobbying effort is expensive. MHCA will soon be contacting park operators in an effort to raise funds to pay for such an effort. I urge you to contribute to this because if the law starts being enforced it could prove very damaging to parks selling and financing homes, putting many of them out of that business.
Above Ground Utility Cables. I am told that both Cox and Qwest are connecting homes to their systems by laying cables across the surface of the rental space and not burying them. This is dangerous and prohibited by most park rules and regulations. Parks experiencing this should notify tenants that they are responsible for ensuring all cables are buried; that they clear the location with management; if appropriate, that they get the location blue staked, and that any existing above ground cables be buried or removed. Those who refuse to cure existing conditions should get 10/20 termination notices.
It is unbelievable to me that in an effort to save money these companies would create safety hazards.
When Qwest does this both the tenant and the park should complain to the Arizona Corporation Commission. Here is a link to their website: http://www.azcc.gov/divisions/utilities/consumerservices.asp
When Cox does it, make complaints to the appropriate department of the city you are in and also to the City Council representative for your area.
January 19, 2011
New 2011 IRS Reporting Requirements. All landlords receiving $600 or more in rent for the year must file an IRS Form 1099 for each service provider to which the landlord paid $600 or more during the year, such as tradesmen, landscapers, and repairmen. The purchase of goods is not included for now. A copy of the form must be sent to the individual or entity to whom the payments were made. The actual filing and distribution of copies will occur after the end of 2011.
Landlords need to gather federal tax ID numbers from these service providers now in order to file the 1099's at the end of the year. Failure to file required 1099's with the IRS can result in fines of $50 per each one not filed.
In 2012, these requirements will expand to cover providers of good to landlords as well as service providers. That is part of the "Obamacare" Bill enacted last year.
January 15, 2011
Abandonments. These continue to come in as the tough economy and an aging population in seniors parks result in homes being vacated and abandoned.
We have a great number of parks, especially outside the metro Phoenix area for whom we handle abandonments despite not doing their other work. We handle such a volume that we have set up computer programs to track time frames necessary for landlord lien sales, and to generate the necessary notices and legal/MVD forms. Using this system allows us to minimize expense.
In addition my legal assistant, Chris Francis was a mobile home dealer for a great many years and knows the industry as well as the appropriate MVD procedures and third party MVD contractors. Since so many of the MVD requirements are internal policies and not published regulations, and are constantly changing, this knowledge also enables us to handle these matters promptly and at minimal expense.
We believe untended abandoned homes are a blight on the industry and that is one of the main reasons we have really focused on dealing with the problem over the last few years. It is also a reason we are happy to perform this work even for parks that are not regular clients. Our professional requirements obligate us to have a limited written retainer agreement with anyone who is not an established client but that will only cover the abandonment case and nothing else.
We frequently process abandonments resulting from evictions handled by other attorneys who refer them to us and are happy to do so. I think we are the only firm equipped to do this on a cost effective basis.
State Budget. The Governor's Office has released a proposed budget for the fiscal year starting July 1, 2011 and a revised budget for the current fiscal year that ends June 30, 2011. Remarkably they have made the big cuts necessary to balance expenditures with revenues by cutting programs such as education and health care and have made almost no reductions in the bureaucracy. State government jobs are preserved. Legislative leaders seem to think this is a good proposal so it is possible that this is the blueprint of the plan that will actually be enacted. I have been following three agencies that affect MHC's:
Attorney General's Office. There are no cuts of significance. That means that personnel levels there will probably be unchanged. The number of people in Civil Rights enforcing fair housing laws will stay the same or maybe increase a little.
MVD. Same story. Funding remains about the same. That is a relief since so many functions that affect MHC's have been outsourced to private firms charging significant additional fees, including on site inspections of mobile homes, that fees paid are already far higher than a couple of years ago.
FBLS Department. It looks like no cut is proposed this year and only a small one is proposed next year. No staff reductions are proposed. Such cuts as there are will take place in "other operating expenses" which is bureaucratese for not saying where they will take place. Both this year and next the Department is authorized to spend $682,600 from the Mobile Home Relocation Fund. That amount is authorized each year. I am no expert on reading these things but it looks to me like that money is being used for things other than reimbursement of relocation expenses of MHC tenants forced to relocate out of parks. That, of course is the purpose of the fund. I have been told that the Department has been proposed for elimination over the past couple of years but it looks like having one of the Governor's insiders as Department head has helped save it.
Relocation Fund. The endless cycle of tax and spend goes on in this Fund. It was originally set up to cover tenant involuntary relocation costs by taxing all tenant homes throughout the State with the tax to be suspended when it reached a certain dollar threshold (the amount has changed over the years). Since relocations have been minimal over the last few years (the economy does not encourage redevelopment of parks for different uses meaning they are not being closed), money has not been spent for that purpose. But the economy has also been tough on State budgets and in order to reduce the need for money from general State revenues, a device has been developed to spend money out of the Relocation Fund on non-related expenses of the Department. The Comptroller General's Office blew the whistle on that in 2009 (See http://www.michaelparhamlaw.citymax.com/f/Audit_of_Relocation_Fund_-_Dept_of_Fire_Building_and_Life_Safety%5B1%5D.pdf.) After that the level of improper spending out of the Fund significantly decreased but evidently did not end. Apparently the Department is still funding many of its general operations out of the fund. The effect is that taxes on tenants to maintain the Fund at the required level keep going on.
January 12, 2011
Guns. The Tucson shootings have sparked a lot of discussion about a lot of things. "Hate speech" for example is pointed to by political opportunists as contributing to a culture of violence. While I don't think what is being painted as "hate speech" is any such thing, opportunists are trying to use the argument to silence their political opposition.
The easy availability of guns is pointed to as another factor behind the shootings. While a gun was the tool, the cause of the shooting was the guy who planned the shootings and pulled the trigger.
Nevertheless, due to recent changes in the law, guns are easily available and more people are carrying them. In part this is attributable to the recent Supreme Court decision restricting the rights of state and local governments to control guns, and recent legislation in Arizona allowing concealed carry by people with clean criminal records without a permit.
I believe in and support the Second Amendment that guarantees the right of citizens to bear arms. But it is important to remember that the Second Amendment operates as a restriction on the power of government. The Second Amendment does not apply to the rights of private property owners to regulate affairs on their private property. Moreover the Fifth and 14th Amendments protect the rights of private property owners against inappropriate government interference in their exercise of their private property rights.
What I am getting at is that operators of MHC's are free to restrict the carrying and display of firearms in their communities if they so desire. I bring this up because the display and occasional use of guns in parks by tenants has been a continuing, though not widespread problem over the years. Many landlords have been concerned over the potential for violence and intimidation that the wearing of a firearm in a park represents.
A number of landlords over the years have adopted rules and regulations prohibiting residents from carrying firearms in the community except back and forth to their vehicles, with the exception of sworn law enforcement personnel. While I leave it to individual landlords to decide if such a rule is appropriate for their parks, adoption is permissable for a private property owner on his land.
Since guns can be lawfully be carried concealed, complete enforcement of such a rule is impossible but at least it could control open display of firearms and their use to intimidate others in the community.
January 9, 2011
Training. Repeating a post from late last year, I am scheduled for only one manager training class in the metro Phoenix area in all of 2011. This 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.
January 7, 2011
Late Fees. This is one of those questions that just won't go away. When can an MHC (or RV park) impose late fees?
Under both the MHP LTA and the Long Term RV Rental Space Act, a late fee of not more than $5 per day can be imposed if a tenant does not pay space rent within five days after the due date. Rent for these purposes includes park charged utilities. To be enforceable, a late fee must be provided for in a written rental agreement.
The due date is normally the first of the month. Five days after the due date is the sixth, That means if rent is paid as late as the sixth, no late fee accrues. If rent is paid after the close of business on the sixth, however, a late fee of up to $5 per day can be imposed.
In that case the late fee can be imposed retroactively. The law provides that in calculating time periods, the first day be excluded and the last day be included. That means if rent is paid on the seventh, a late fee of $30 can be added ($5 per day beginning the 2nd through and including the 7th).
These rules apply to all MHC rentals and to all Long Term RV Rental Space rentals (RV spaces unbder written rental agreements with a term of over 180 days). And once again there needs to be a written rental agreement providing for late fees in order to collect them.
January 4, 2011
Feral/Stray Cats. This is becoming a huge problem in some MHC's. Today alone I had calls from two parks wondering what to do. Essentially the problem is that thousands of people have lost houses to foreclosure or for other reasons have moved. They simply turn their cats loose in the neighborhood and leave. The cats then wander around looking for food and along the way get pregnant and have litters of kittens that grow up and start the cycle all over again. Before you know it there are hundreds of thousands of these critters all over the place.
Loose cats are attracted to places where they can get food and water. They hang out where they are fed, not where they will starve. MHC's often have residents who from a misguided sense of compassion put food and water out for the strays. The strays then remain in the area so they can keep getting fed and this in turn attracts more strays. As the cat population in the community mushrooms, health hazards increase as a result of them urinating and defecating all over the place. The urine stinks making the environment pretty awful.
Mobile homes with missing skirting will often have stray cats living under them as they seek shelter. They defecate and urinate under these homes making for a horrible mess and awful stench. If the residents of the home are also feeding the cats they are contributing to a terrible problem not just on their space but throughout the community.
Finally, many of these cats contract the cat version of HIV that can infect other cats including house cats that are pets in the park.
Parks faced with this problem have to act on two fronts.
First they need to eliminate the cause of the problem. Residents feeding strays need to be dealt with promptly and if need be, harshly. Managers need to identify from inspections and neighbor complaints who is feeding strays. They should be asked to stop and if necessary given 10/20 termination notices for causing a nuisance and health hazard by feeding strays and attracting them. Park rules should be checked and if necessary, amended to prohibit placing any food or water outside for stray animals.
Second, the existing problem needs to be resolved. Residents with colonies under their homes need to get 10/20 notices to fix the skirting and to get rid of cats living under their homes. If the place stinks of cat urine the notice should also require them to fumigate.
Unfortunately the government is less than worthless in this effort. It is unlawful to simply exterminate these animals. Maricopa County will put a cat to sleep if a person traps it and brings it in but will charge nearly $100 per cat. The "preferred" treatment is to catch, neuter and return the animals. In other words, a person is supposed to trap a cat, bring it in to a shelter that will neuter it, but then it must be returned to where it came from.
In my view this is a profoundly stupid program but what else do you expect from government. The rationale is that the animals calm down a lot after being neutered, and that by returning them, their "vacancy" will not be filled by another stray. I will bite my tongue and not comment on that logic.
I suppose if the choice is to trap, neuter and return or to do nothing, the former gets the nod.
But I think the most immediately effective way to deal with the situation is to end the cause of the problem. Eliminate the source of their food and water and they will move on. I just hope they move into neighborhoods of government bureaucrats who dreamed up the present policies for dealing with feral cats and strays.
Here is an article on this subject: http://www.azcentral.com/community/phoenix/articles/2009/07/31/20090731feralcats0801.html
Here is a link describing the government programs: http://www.maricopa.gov/Pets/FieldEnforcement/FeralCats.aspx
January 1, 2011.
Happy New Year. I have a hunch this will be a better year than the last one. But that's damning with faint praise since the last one was so rotten. It seems like snowbirds are returning, job losses are tapering off and some new hiring is beginning here. But I am certainly no economist. My biggest worry is what is going to happen with the State budget and how that will affect services the MHC industry is dependent on. But there are bright spots.
1. Maybe reductions in the size and funding of State government will get the bureaucrat busy bodies out of our hair. These people largely exist to create work for themselves and use that to argue for their importance and need for more resources to continue that "important" work.
2. AAMHO has new leadership. Maybe there won't be the reflexive need to oppose landlords in everything they seek to do no matter how self defeating that opposition is. Maybe both sides will be able to talk again.
3. With divided government maybe the big spending programs and inevitable future tax increases will be minimized.
But there is uncertainty. We have a new State Attorney General. How will he enforce fair housing laws? What, if any changes will we see in that area? In addition, many Justice Courts have new Justices of the Peace. What difference will that make in evictions?
Though lacking a crystal ball and despite the uncertainties, I suspect this will be a pretty quiet year.
Upcoming Legislative Session. There are some things to be aware of when the Legislature convenes in a few days.
Bed bugs are going to be an issue. There will be legislation imposing some responsibility on landlords for dealing with bed bug infestations. This will include MHC's that rent park owned homes. These pests are a real problem in much of the country and are difficult and expensive to get rid of. There could be a real fight over how much responsibility to place on the landlord when it is obvious that tenants are bringing these critters in.
Another issue is going to be the Registrar of Contractors' effort to force landlords to used licensed contractors for repairs and many routine maintenance matters on their properties. While this again affects apartments more than MHC's, we are involved. The Registrar wants more power and therefore the ability to argue for its continued existence and need for more money. It would also be helping the industry it regulates by forcing landlords to replace in-house maintenance staffs with licensed contractors for this work.
The Relocation Fund is another fat target this year. For the past couple of years the FBLS Department has been feasting on it, squandering its resources in covering operating expenses for its many non-essential functions. As money gets spent, however more continues to be collected in the form of tax assessments on tenant mobile homes. The law was designed to have those taxes suspended when the Fund reached a certain level, but the continual bleeding of the Fund at the hands of the Department ensures those assessments will never stop.
But now the Legislature will be looking for money everywhere it can in order to try and balance both this and next years' budgets.
The Relocation Fund is like a wounded wildebeest surrounded by a pack of ravenous hyenas on the African plain. The biggest hyena may be the Legislature which could sweep much of the Fund as it wipes out the FBLS Department.
And yes--it is spelled "wildebeest", not "wildebeast"!
Whatever happens, the Fund is at risk this year like never before.
Articles. I have posted four new articles on the MHC Articles page. They are the first four on the list. Click on that page reference on the left margin of this page to go there.
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