SENATE BILL REPORT
SB 6694
BYSenators Lee, Smitherman, Bluechel, Smith, Murray, Bender, Warnke, Vognild, Patrick and von Reichbauer
Regulating the sale of mobile homes and mobile home parks.
Senate Committee on Economic Development & Labor
Senate Hearing Date(s):January 30, 1990; February 2, 1990
Majority Report: That Substitute Senate Bill No. 6694 be substituted therefor, and the substitute bill do pass.
Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Murray, Smitherman, Williams.
Senate Staff:David Cheal (786-7576)
February 9, 1990
AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 2, 1990
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 90 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 60 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 of mobile homes by tenants 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.
EFFECT OF PROPOSED SUBSTITUTE:
The definition of a "qualified tenant organization" is changed to an organization formed for the purposes of purchasing the park.
The number of days for a tenant organization to tender an offer following notice is reduced from 30 to 15 days.
The percentage of the purchase price that must accompany a tenant offer is raised from 1 percent to 3 percent.
The required time for closing can be negotiated between the parties instead of a prescribed 90 days. However, tenant organizations must be given 90 days if they wish.
Appropriation: none
Revenue: none
Fiscal Note: none requested
Senate Committee - Testified: Fred Brume, Washington Mobile Home Park Owners Association (con)