CLEARLAKE OAKS >> Controversey evolved over a mobile home park regarding added on fees once new management took over operations. The issue had a hearing at the Eastern Region Town Hall meeting at the Moose Lodge October 2.
A park tenant in unincorporated Clearlake Oaks, explained many tenants in the park (Lake Village Estates) are 55 or older living on a fixed income. The speaker addressing ERTH requested anonymity, to preserve confidentiality, and is referred to as Tenant H. “Currently space rent for most people in the park is $450 per month ($420, says management) because many of us were there prior to the recent takeover,” Tenant H said. “But the space rent can go up to $650 ($600, says management) for people moving into the Park. We paid two pass-through charges with our monthly space rental, but we have to pay a mortgage if you hadn’t bought in cash,” Tenant H clarified.
Tenant H also noted there is precedent for corporate management firms to buy out privately owned mobile home parks, across the U.S. “People in favor of rent stabilization” is a group of concerned residents of Lake County. Many of them reside in seniors’ mobile home parks. In such an arrangement, a management company rents out space under which a privately owned home resides. The management entity has little maintenance responsibility, while the homeowner pays for trash collection, gas, electricity, sewer and water. This makes a homeowner vulnerable since homes are not truly mobile, given prohibitive costs to move. A Lake County ordinance might specify special rent increase limits for those types of communities. However, many mobile home park residents see the need for county-wide rent stabilization for the reasons cited above, indicated Tenant H.
The homeowners are expected to pay for their home and site maintenance, and the park owner is responsible for daily upkeep, including the clubhouse and swimming pool, along with roads, lighting, sewer, and water costs,” corroborated Aric Resnicke, for Eli Weiner, BoaVida Communities, Property Manager. Yet he noted, this infrastructure is costly to maintain and insure, plus running a business with full-time staff, customer service manager, property taxes, utility expenses, all go up yearly.
Lake County has noted a trend. Corporate interests view the county as an opportunity for investors where rents are comparatively affordable indicating room for appreciation. Recent corporate acquisition of mobile home parks here, were followed by rent increases along with questionable practices. “Note that it is not our intention to single out or villainize any particular investment or real estate management operation, some of which may have the noblest of intentions, but to protect residents (especially elderly, on modest fixed incomes) from being displaced by exploitive entities of any kind,” Tenant H said.
Meanwhile, when the property was purchased BoaVida noted the previous owners had invested little. Not uncommon for legacy owners – they don’t want to put more money into a property. In particular, the common area clubhouse and the roads had significant degradation needing urgent attention; repairs totaling $125,000. They passed through a capital improvement expense at $13.65 per month. This automatically expires in five years, Resnicke noted.
Yet Tenant H alluded corporate management sometimes bypasses rent caps, such as delineated in California State Law, Assembly Bill 1482, and recently seen execution of pass-through charges, maintaining these do not constitute as rent increases because they are levied for specific maintenance.
In addition, the tenant at the park maintain these pass through charges, though admittedly small, add up such as a monthly cost to remodel the clubhouse at the park which will cost $66,800 over five years and which the tenants must pay at a cost of $7 per space. At 159 spaces, the monthly cost for the remodeling is $1,113, but tenants say the management’s remodel resulted in more offices on site for management and fewer amenities for residents.
The monthly road charge for the cost of road repairs totals $63,500 over the five year period and costs $6.65 a month per space. Residents say that small charges add up to a lot when combined, with the possibility of more beign added over time.
The problem Tenant H illustrates, there is no legal framework as what defines a pass-through charge. This logic assumes tenants can be levied for normal upkeep, to remodeling a clubhouse or maintenance of a corporate on-site office. The rationale is, such projects make the park more attractive, which Tennant H questions justification.
But BoaVida does not believe in imposing increases on existing tenants, unlike many players in the industry, and this method allows this park to keep its value. Homeowners pay for their home and site maintenance, and the park owner for daily upkeep of amenities including clubhouse and swimming pool, along with roads, lighting, sewer, and water systems.
A corollary concern is the practice of corporate management to offer new homes on previously undeveloped space rent at 44% higher than current lot rates noted Tenant H. Shoreline residents have expressed fear of being driven out of homes by an out-of-county property management corporation. Word has spread tenants are being surcharged for management overhead expense.
However, there is a state law, The Mobile home Residency Law (MRL), found in Section 798 et seq. of the Civil Code, establishes rights and responsibilities of homeowners and park management. The MRL is part of the terms of any park rental agreement; but can be vague and wrought with loopholes, Tenant H charged. Property managers are capable of sidestepping rent caps by imposing additional charges on tenants for almost anything they think up, Tenant H contended.
“But we do not believe in imposing significant increases on our existing tenants, unlike many players in the industry,” Resnicke said. “And this method allows this beautiful park to maintain its value to existing and new tenants. Buying a manufactured home offers the lowest price point for owning a home, and amenities of Lake Village Estates offers an affordable community for all.”
“Lake Village Estates is considered one of the nicest manufactured home communities in the region,” said Resnicke. “The homes residents live in are owned by them. Their home is an asset that holds value.”
“The more desirable the community, the more the home is valued and is why these are shared costs; it’s a unique partnership,” Resnicke added. “Buying a manufactured home offers the lowest price point for owning a home, and the amenities of Lake Village Estates offers a true affordable community for all.”
