SENATE BILL REPORT

ESB 5558

BYSenators Smith, Murray, Lee, Bender, Madsen, Warnke, Smitherman, Rasmussen, von Reichbauer, Sutherland and Gaspard

Regulating sale of mobile homes and parks.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 1, 1989; February 13, 1989

Majority Report:  Do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Murray, Smitherman, Williams.

Senate Staff:David Cheal (786-7576)

                  March 17, 1989

AS OF MARCH 7, 1989

BACKGROUND:

Mobile home parks are often sold without notice to tenants.  Whether or not the sale of a park will result in park closure, tenants or tenants' associations often have an interest in purchasing a park.  Many tenant groups would prefer to own the park cooperatively rather than continuing to lease spaces.

Park owners may wish to purchase mobile homes being sold by tenants, but often have no notice that the mobile homes are for sale.

SUMMARY:

If a qualified tenants' association gives notice to a park owner of a continuing desire to purchase the park, the park owner must give notice of any proposed sale, including the terms of any offer received, to the tenant organization.  If the organization tenders an offer within 30 days following notice, together with 1 percent of the purchase price, the park owner must sell the park to the tenants.  The tenant group must stand ready to close the transaction within 60 days following the offer. 

A "qualified tenants' organization" means one formally organized for the purposes of protecting and promoting the interests of mobile home park tenants.  It must have been organized at least 30 days prior to the time the offer is made.

Notice of continuing desire to purchase the park must indicate that at least 60 percent of the residents are contractually bound to each other to participate in purchasing the park.  Several types of transactions are exempt from the notice requirement such as transfers of park ownership pursuant to a divorce decree, mortgage foreclosure sale or mortgage financing by the owner.

In the case of seller financing of a park sale, the owner may decline to sell to the tenant organization if, based on reasonable objective evidence, to do so would present a greater risk than a contemporaneous offer from another source.

If a park owner fails to give notice as required by the act, a sale within 30 days of the time notice should have been given is voidable upon application to superior court. 

The same right to have meaningful notice prior to sale is given to park owners.  They may notify tenants of their desire to receive notice of the sale of mobile homes within the park.  If such notice is given, mobile home owners in the park must give notice of a proposed sale of their mobile home to the park owner.  Following notice, a park owner has 72 hours to present an offer to purchase on the same terms as the original offer, and tender 5 percent of the purchase price.  If that is done, the mobile home owner must sell the mobile home to the park owner.

Mobile home sales in violation of the notice requirement are voidable upon application to superior court. 

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Senate Committee - Testified: John Woodring (con); John Jensen (for)