Right of First Refusal
There is some confusion regarding the Right of First Refusal. First a definition: The seller of a mobile home must first offer the park to purchase the mobile home. The park then has the right to not purchase the home from the seller. They are then free to sell the home to anyone who qualifies (see section 2: Management Approval of Buyer).
The right of first refusal used to be written into many leases. Civil code section 798.19.5 makes this practice outdated (for any rental agreement entered into or renewed after January 1, 2006). A park owner can no longer include a right of first refusal in the lease. BUT it does allow the park owner to create a separate agreement that allows management or the park owner a right of first refusal to purchase the mobile home.
Q: Is it illegal for a park to have a Right of First Refusal contract?
- NO. It cannot be included in the lease BUT it can be a separate document.
Management Approval of Buyer
Mobile Home Parks are unique. You purchase the home but rent the land. This can create some confusion/tension when you go to sell your home, and said home is to remain in the park. Since the person purchasing your home will also be a “renter” of the land, the park owner has a right to screen anyone who is purchasing a home in the park.
Under Civil Code 798.74 the park can refuse tenancy to anyone who cannot prove that they can “pay the rent and charges of the park” or “based on prior tenancies, if he or she will not comply with the rules and regulations of the park”. These are the two reasons that a Park Owner can refuse tenancy.
If a purchaser is refused tenancy, it is not because the Park Owner has something against the current Home Owner. When looking at a new tenant and their ability to “pay the rent and charges of the park” the park owner is likely not only looking at the current rent, but also at future rents.
Lets say the park has a long-term lease. The lease allows for up to a 5% increase in rent yearly. If the purchaser is going to move into the park and sign the lease they need to be able to pay not only the current rent in the park but also any future rent increases (as outlined in their lease). If they barely make enough to cover the current rent, it is reasonable to say they will likely no longer be able to pay the rent if the increases outlined in their lease go into affect.
This step of the Park approving a buyer is a crucial step that protects not only the park owner but also the future tenant.