Your Rights Bytes #12 - Rejected Home Buyers

Question:  Can the park’s income requirements on prospective buyers prevent a resident from selling their home?

Background:

Over the years, I received calls from mobilehome park residents who felt that the park manager was purposely blocking the sale of their home by unfairly rejecting the residency application of their potential buyers.  Although indeed there were cases where a park manager would derail a sale for unscrupulous reasons, in most cases a residency application was rejected because the potential buyer did not have the sustained income to qualify for long-term residency.

Most of the people who called me were not aware that this very screening process happens in nearly every pre-rental review of apartments, single-family rental housing, and even commercial properties.  I would explain to callers that property managers routinely screen potential tenants to determine if they would be able to afford future rent increases, as well as upcoming pass-thru fees for future infrastructure repair or replacement.  In a large mobilehome park where infrastructure upgrades have been delayed for years, repairs or replacement of sewer, roads and lighting could cost well over a million dollars.  Residents would not only be paying their base rent, but be charged for a portion of the infrastructure repair costs.

Although most of the cases were the same, there were some cases where the facts proved the manager’s position.  One day a manager called me to chew me out because he felt that I was giving encouragement to a realtor to resist the manager’s decision.  (It was always my style to stay on neutral ground, and to listen objectively and to learn.)  In this case, the potential buyer had proof of plenty of funds to purchase the mobilehome.  However, their funds were not their own, but their elderly parents’.  In addition, the buyer had no employment history.  Further, the prospective buyer had a poor tenancy record, as reported by former landlords, which had caused chronic complaints from other residents.  The manager denied residency to this potential buyer not only because their income could not be guaranteed, but to avoid trouble for other residents – and a possible eviction. 

Answer: Yes.  The sale of a mobilehome located in a mobilehome park is a three-party, not two-party transaction.  The buyer and seller must not only agree to the terms of the sale of the homes, but the buyer must be approved for residency in the park by the park owner/management.  Management can withhold approval on the basis of: 1) the buyer’s inability to pay the rent and charges of the park, and 2) the buyer’s inability to comply with park rules and regulations as indicated by prior tenancies (see Civil Code Section 798.74).  Although guidelines used by other landlords or public agencies for rental housing may be more lenient, many park owners impose higher income requirement to assure buyers will be able to afford future rent increases without causing the park problems such as evictions. 

[Editor’s Note:  However, in 2019 the State Legislature passed SB 274 by Senator Bill Dodd.   This made changes in the Mobilehome Residency Law section 798.74 to allow a prospective buyer to supply other proofs of ability to pay besides income.  This makes it more likely that the buyer will be approved even if their income alone does not qualify them.] 

--Stephanie Reid, formerly on staff with the Senate Select Committee on Manufactured Homes and Communities