BILL REQ. #:  H-0759.3 

Read first time 01/24/2007.   Referred to Committee on Housing.

     AN ACT Relating to the preservation of manufactured/mobile home communities; amending RCW 59.22.050; adding a new section to chapter 82.45 RCW; adding a new chapter to Title 59 RCW; repealing RCW 59.23.005, 59.23.010, 59.23.015, 59.23.020, 59.23.025, 59.23.030, 59.23.035, and 59.23.040; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Manufactured/mobile home communities provide a significant source of homeownership opportunities for Washington residents. However, the increasing closure and conversion of manufactured/mobile home communities to other uses, combined with increasing manufactured/mobile home lot rents, low vacancy rates in existing manufactured/mobile home communities, and the extremely high cost of moving homes when manufactured/mobile home communities close, increasingly make manufactured/mobile home community living insecure for manufactured/mobile home tenants.
     (b) Many tenants who reside in manufactured/mobile home communities are low-income households and senior citizens and are, therefore, those residents most in need of reasonable security in the siting of their manufactured/mobile homes because of the adverse impacts on the health, safety, and welfare of tenants forced to move due to closure, change of use, or discontinuance of manufactured/mobile home communities.
     (c) The preservation of manufactured/mobile home communities:
     (i) Is a more economical alternative than providing new replacement housing units for tenants who are displaced from closing manufactured/mobile home communities;
     (ii) Is a strategy by which all local governments can meet the affordable housing needs of their residents;
     (iii) Is a strategy by which local governments planning under RCW 36.70A.040 may meet the housing element of their comprehensive plans as it relates to the provision of housing affordable to all economic sectors; and
     (iv) Should be a goal of all housing authorities and local governments.
     (d) The loss of manufactured/mobile home communities should not result in a net loss of affordable housing, thus compromising the ability of local governments to meet the affordable housing needs of its residents and the ability of these local governments planning under RCW 36.70A.040 to meet affordable housing goals under chapter 36.70A RCW.
     (e) The closure of manufactured/mobile home communities has serious environmental, safety, and financial impacts, including:
     (i) Homes that cannot be moved to other locations add to Washington's landfills;
     (ii) Homes that are abandoned might attract crime; and
     (iii) Vacant homes that will not be reoccupied need to be tested for asbestos and lead, and these toxic materials need to be removed prior to demolition.
     (f) The self-governance aspect of tenants owning manufactured/mobile home communities results in a lesser usage of police resources as tenants experience fewer societal conflicts when they own the real estate as well as their homes.
     (g) Housing authorities, by their creation and purpose, are the public body corporate and politic of the city or county responsible for addressing the availability of safe and sanitary dwelling accommodations available to persons of low income, senior citizens, and others.
     (2) It is the intent of the legislature to encourage and facilitate the preservation of existing manufactured/mobile home communities in the event of voluntary sales of manufactured/mobile home communities and, to the extent necessary and possible, to involve manufactured/mobile home community tenants or an eligible organization representing tenants, such as a nonprofit organization, housing authority, or local government, in the preservation of manufactured/mobile home communities.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Abandoned" as it relates to a manufactured/mobile home or park model owned by a tenant in a manufactured/mobile home park, manufactured/mobile home park cooperative, or manufacture/mobile home park subdivision or tenancy in a manufactured/mobile home lot, means the tenant has defaulted in rent and by absence and by words or actions reasonably indicates the intention not to continue tenancy.
     (2) "Delivery," with respect to notices discussed in this chapter, means the date on which a notice was mailed or personally delivered.
     (3) "Eligible organization" includes local governments, local housing authorities, nonprofit community or neighborhood-based organizations, federally recognized Indian tribes in the state of Washington, and regional or statewide nonprofit housing assistance organizations.
     (4) "Fair market value" is determined by calculating the mean of three professional appraisals: One by an appraiser contracted by the manufactured/mobile home community landlord; one by an appraiser contracted by the qualified tenant organization or an eligible organization representing the tenants; and one by an appraiser contracted by the office of manufactured housing.
     (5) "Housing authority" or "authority" means any of the public body corporate and politic created in RCW 35.82.030.
     (6) "Housing project" has the same meaning as in RCW 35.82.020.
     (7) "Landlord" means the owner of a manufactured/mobile home community and includes the agents of a landlord.
     (8) "Local government" means a town government, city government, code city government, or county government in the state of Washington.
     (9) "Manufactured home" means a single-family dwelling built according to the United States department of housing and urban development manufactured home construction and safety standards act, which is a national preemptive building code. A manufactured home also: (a) Includes plumbing, heating, air conditioning, and electrical systems; (b) is built on a permanent chassis; and (c) can be transported in one or more sections with each section at least eight feet wide and forty feet long when transported, or when installed on the site is three hundred twenty square feet or greater.
     (10) "Mobile home" means a factory-built dwelling built before June 15, 1976, to standards other than the United States department of housing and urban development code, and acceptable under applicable state codes in effect at the time of construction or introduction of the home into the state. Mobile homes have not been built since the introduction of the United States department of housing and urban development manufactured home construction and safety act.
     (11) "Manufactured/mobile home" means either a manufactured home or a mobile home.
     (12) "Manufactured/mobile home community" means any real property that is rented or held out for rent to others for the placement of two or more manufactured/mobile homes or park models for the primary purpose of production of income, except where the real property is rented or held out for rent for seasonal recreational purpose only and is not intended for year-round occupancy.
     (13) "Manufactured/mobile home lot" means a portion of a manufactured/mobile home community designated as the location of a manufactured/mobile home or park model and its accessory buildings, and intended for the exclusive use as a primary residence by the occupants of that manufactured/mobile home or park model.
     (14) "Manufactured/mobile home cooperative" means real property consisting of common areas and two or more lots held out for placement of manufactured/mobile homes or park models in which both the individual lots and the common areas are owned by an association of shareholders that leases or otherwise extends the right to occupy individual lots to its own members.
     (15) "Manufactured/mobile home community subdivision" means real property, whether it is called a subdivision, condominium, or planned unit development, consisting of common areas and two or more lots held for placement of manufactured/mobile homes or park models in which there is private ownership of the individual lots and common, undivided ownership of the common areas by owners of the individual lots.
     (16) "Notice of intent to pursue a qualified sale" means a notice voluntarily filed by a landlord obligating the landlord to pursue a qualified sale of a manufactured/mobile home community before offering the property for sale to other parties.
     (17) "Notice of sale" means a notice required under section 5 of this act to be filed by landlords (a) within fourteen days after the date on which any advertisement, listing, or public notice advertises that a manufactured/mobile home community is for sale, or that an unconditional offer of sale is being considered and (b) at least ninety days before the sale occurs.
     (18) "Park model" means a recreational vehicle intended for permanent or semipermanent installation and is used as a primary residence.
     (19) "Qualified tenant organization" means a formal organization of tenants within a manufactured/mobile home community, with the only requirement for membership consisting of being a tenant.     
     (20) "Qualified sale of a manufactured/mobile home community" means the sale of land and improvements comprising a manufactured/mobile home community that is transferred in a single purchase to a qualified tenant organization or to an eligible organization representing the tenants at a price not to exceed fair market value.
     (21) "Recreational vehicle" means a travel trailer, motor home, truck camper, or camping trailer that is primarily used as a permanent residence located in a manufactured/mobile home community.
     (22) "Sale" has the same meaning as in RCW 82.45.010.
     (23) "Tenant" means a person who rents a manufactured/mobile home lot for a term of one month or longer and owns the manufactured/mobile home on the lot.

NEW SECTION.  Sec. 3   (1) A qualified sale of a manufactured/mobile home community is exempt from the excise tax imposed under chapter 82.45 RCW, as provided for in section 9 of this act.
     (2) A landlord may initiate a future qualified sale of a manufactured/mobile home community at any point during ownership, by filing a notice of intent to pursue a qualified sale with the office of manufactured housing and the Washington state housing finance commission by certified mail or personal delivery. A landlord shall provide a copy of the notice of intent to pursue a qualified sale to each tenant of the manufactured/mobile home community by certified mail or personal delivery within ten days of filing the notice with the office of manufactured housing and the Washington state housing finance commission. Subsequently, a landlord shall also provide a copy of the notice to all new tenants by attaching it to the rental agreement.
     (3) If a notice of intent to pursue a qualified sale has been filed by a landlord according to the requirements of subsection (2) of this section, the following requirements and timelines apply after delivery of the notice of sale required in section 5 of this act:
     (a) A landlord must:
     (i) Offer the manufactured/mobile home community to a qualified tenant organization or to an eligible organization representing the tenants at fair market value for a period of at least ninety days; and
     (ii) Allow any qualified tenant organization or eligible organization representing the tenants, who deliver to the landlord written notice of their interest in purchasing the manufactured/mobile home community within that ninety-day period, twelve months to close the sale of the manufactured/mobile home community.
     (b) A qualified tenant organization or an eligible organization representing the tenants must notify the landlord, in writing by certified mail or personal delivery within ninety days after receipt of the notice of sale, of its intent to purchase the manufactured/mobile home community.
     (4) A notice of intent to pursue a qualified sale for a manufactured/mobile home community may be rescinded by a landlord at any time before delivery of a notice of sale for that manufactured/mobile home community by filing written notice by certified mail or personal delivery with the office of manufactured housing and the Washington state housing finance commission. A landlord must also provide copies of the notice to any qualified tenant organization and all other manufactured/mobile home community tenants by certified mail or personal delivery within ten days after filing the notice with the office of manufactured housing and the Washington state housing finance commission.

NEW SECTION.  Sec. 4   (1) The office of manufactured housing must prepare and distribute to all known landlords of manufactured/mobile home communities materials related to this chapter, including, at a minimum:
     (a) A template notice of intent to pursue a qualified sale, which must include:
     (i) An acknowledgment of the requirements and timelines described in section 3(3)(a) of this act; and
     (ii) The landlord's contact information or the contact information of the landlord's agent who would be responsible for communicating with the qualified tenant organization or eligible organization representing the tenants regarding a future sale of the manufactured/mobile home community;
     (b) A template notice rescinding a notice of intent to pursue a qualified sale;
     (c) A template notice of sale, which must include:
     (i) A statement that the landlord intends to sell the manufactured/mobile home community;
     (ii) The landlord's contact information or the contact information of the landlord's agent who is responsible for communicating with the qualified tenant organization or eligible organization representing the tenants regarding the sale of the property;
     (iii) The fair market value for the manufactured/mobile home community according to an assessor contracted by the landlord;
     (iv) The income and expenses related to the operation of the community, and the most recent reports and disclosures relating to the condition of the infrastructure, common areas, and landlord-owned buildings; and
     (v) The following additional information if a landlord indicates that he or she has not filed a notice of intent to pursue a qualified sale:
     (A) A description of an acceptable offer for which the landlord would agree to sell or lease the manufactured/mobile home community, including the specific price, terms, and conditions of the acceptable offer;
     (B) If applicable, a copy of a signed, written, acceptable offer that the landlord has already received for the purchase or lease of the manufactured/mobile home community, including a statement of the price, terms, and conditions of the acceptable offer and a statement regarding whether the party who made the acceptable offer will likely discontinue the property as a manufactured/mobile home community; and
     (C) A statement by the landlord acknowledging his or her duties under section 5 of this act;
     (d) Educational materials describing how to pursue a qualified sale of a manufactured/mobile home community to obtain an exemption from the excise tax on real estate imposed under chapter 82.45 RCW;
     (e) Educational materials describing the required notifications and time period restrictions and obligations imposed under this chapter; and
     (f) Educational materials describing the penalties imposed by section 8 of this act for violations of this act.
     (2) The office of manufactured housing must prepare and distribute to all known tenants of manufactured/mobile home communities materials related to this chapter, including, at a minimum:
     (a) Educational materials describing how to pursue a qualified sale of a manufactured/mobile home community;
     (b) Educational materials describing the required notifications and time period restrictions and obligations imposed under this chapter;
     (c) A list of eligible organizations that express interest in collaborating with qualified tenant organizations in the purchase of manufactured/mobile home communities; and
     (d) A list and description of possible funding resources and other financing mechanisms that may assist a qualified tenant organization or eligible organization representing tenants in the purchase of a manufactured/mobile home community.
     (3) The office of manufactured housing shall produce an annual report regarding activity related to sales of manufactured/mobile home communities and shall include, at a minimum, information about qualified sales of manufactured/mobile home communities as well as other sales of manufactured/mobile home communities to tenant organizations and other eligible organizations for the purpose of community preservation. The annual report must be provided to the appropriate committees of the legislature each year by December 31st, beginning in 2007.

NEW SECTION.  Sec. 5   (1) Within fourteen days after the date on which any advertisement, listing, or public notice advertises that a manufactured/mobile home community is for sale, or an unconditional offer of sale is being considered, and at least ninety days before the sale occurs, a landlord must provide a written notice of sale by certified mail or personal delivery to:
     (a) Each tenant of the manufactured/mobile home community;
     (b) The officers of any known qualified tenant organization;
     (c) The office of manufactured housing;
     (d) The local government within whose jurisdiction all or part of the manufactured/mobile home community exists;
     (e) The housing authority within whose jurisdiction all or part of the manufactured/mobile home community exists; and
     (f) The Washington state housing finance commission.
     (2) Within ninety days after delivery of the notice of sale, a landlord may only enter into a purchase and sale agreement with:
     (a) A qualified tenant organization or eligible organization representing the tenants under section 3 of this act;
     (b) A qualified tenant organization or eligible organization representing the tenants under section 6 of this act; or
     (c) A local government or housing authority under section 7 of this act.

NEW SECTION.  Sec. 6   Except as provided in section 3 of this act:
     (1) Within the ninety-day period described in section 5(2) of this act, a qualified tenant organization or an eligible organization representing the tenants may notify the landlord in writing by certified mail or personal delivery of its interest in purchasing the manufactured/mobile home community.
     (2) Upon delivery of the notice, all parties must negotiate in good faith, and the landlord must provide the qualified tenant organization or eligible organization representing the tenants the same opportunity to purchase the property as the landlord would provide to any bona fide third party potential purchaser.

NEW SECTION.  Sec. 7   (1) A local government or a housing authority has the right to purchase a manufactured/mobile home community for the purpose of preserving its use as a manufactured/mobile home community, if the local government or housing authority:
     (a) Submits to the landlord, within the ninety-day period after delivery of the notice of sale, a purchase and sale agreement on substantially equivalent terms and conditions as that of the acceptable offer detailed by the landlord as required in section 4(1)(c)(v) of this act; and
     (b) Closes on the purchase within one hundred eighty days of receipt of the notice of sale. This time period may be extended by written mutual agreement between the landlord and the local government or housing authority.
     (2) If a local government or housing authority submits a purchase and sales agreement meeting the requirements of subsection (1)(a) of this section, a landlord may not enter into any other agreement to sell the manufactured/mobile home community to an eligible organization other than that local government or housing authority within one hundred eighty days or another time period agreed upon under subsection (1)(b) of this section unless the other agreement is contingent on the failure of the housing authority or local government to exercise its right of first refusal authorized under this section.
     (3) A local government or housing authority's right of first refusal under this section does not apply to property transferred by:
     (a) A qualified sale of a manufactured/mobile home community;
     (b) A government taking by eminent domain;
     (c) A forced sale pursuant to foreclosure, except that the landlord must notify tenants of any impending or actual foreclosure action;
     (d) Gift, devise, or operation of law;
     (e) A corporation to an affiliate;
     (f) A partnership to one or more of its partners; and
     (g) A sale or transfer to an heir of the landlord if the landlord will die intestate.
     (4) This section does not affect the ability of a housing authority or local government to condemn property pursuant to its eminent domain authority.

NEW SECTION.  Sec. 8   (1) A landlord who sells or leases a manufactured/mobile home community without complying with the requirements of this chapter is liable to the tenants of the manufactured/mobile home community as a group for a penalty amount equal to ten percent of the gain realized by the landlord from the sale of the property.
     (2) The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying chapter 19.86 RCW. A violation of this chapter is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying chapter 19.86 RCW.

NEW SECTION.  Sec. 9   A new section is added to chapter 82.45 RCW to read as follows:
     A qualified sale of a manufactured/mobile home community as described in section 3 of this act is exempt from tax under this chapter.

Sec. 10   RCW 59.22.050 and 1991 c 327 s 3 are each amended to read as follows:
     (1) In order to provide general assistance to mobile home resident organizations, park owners, and landlords and tenants, the department shall establish an office of ((mobile home affairs)) manufactured housing, which will serve as the coordinating office within state government for matters relating to mobile homes or manufactured housing.
     This office will provide an ombudsman service to mobile home park owners and mobile home tenants with respect to problems and disputes between park owners and park residents and to provide technical assistance to resident organizations ((or)) as defined in RCW 59.22.020, to persons in the process of forming a resident organization pursuant to chapter 59.22 RCW, or to qualified tenant organizations as defined in section 2 of this act. The office will keep records of its activities in this area.
     (2) The office shall fulfill the requirements of section 4 of this act and maintain records of notices required of landlords in chapter 59.-- RCW (sections 1 through 8 of this act).
     (3) The office shall perform all the consumer complaint and related functions of the state administrative agency that are required for purposes of complying with the regulations established by the federal department of housing and urban development for manufactured housing, including the preparation and submission of the state administrative plan.
     (((3))) (4) The office shall administer the mobile home relocation assistance program established in chapter 59.21 RCW, including verifying the eligibility of tenants for relocation assistance.

NEW SECTION.  Sec. 11   The following acts or parts of acts are each repealed:
     (1) RCW 59.23.005 (Findings -- Intent) and 1993 c 66 s 1;
     (2) RCW 59.23.010 (Obligation of good faith) and 1993 c 66 s 2;
     (3) RCW 59.23.015 (Application of chapter -- Definition of "notice") and 1993 c 66 s 3;
     (4) RCW 59.23.020 (Definitions) and 1993 c 66 s 4;
     (5) RCW 59.23.025 (Notice to qualified tenant organization of sale of mobile home park -- Time frame for negotiations -- Terms -- Transfer or sale to relatives) and 1993 c 66 s 5;
     (6) RCW 59.23.030 (Improper notice by mobile home park owner -- Sale may be set aside -- Attorneys' fees) and 1993 c 66 s 6;
     (7) RCW 59.23.035 (Notice to mobile home park owner of sale of tenant's mobile home -- Time frame for negotiations -- Terms -- Transfer or sale to relatives) and 1993 c 66 s 7; and
     (8) RCW 59.23.040 (Improper notice by mobile home owner -- Sale may be set aside -- Attorneys' fees) and 1993 c 66 s 8.

NEW SECTION.  Sec. 12   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 13   Sections 1 through 8 of this act constitute a new chapter in Title 59 RCW.