Sometimes, the residents of a mobile home park decide or are faced with the decision of converting their mobile home park from a model where home owners rent their lot and pay for shared services to a common interest development. In a common interest development, the homeowners assume ownership and management control of the mobile home park.
Mobile home park conversions can have many benefits for residents, but the process can also have drawbacks. First, we’ll look at the general process, and then we’ll explore these potential pluses and minuses of park conversion.
The Conversion Process
If residents are considering a park conversion, they usually elect several residents to serve as a committee to investigate the possibility of park conversion. If the possibility becomes a reality that homeowners choose to partake in, the committee usually forms a nonprofit corporation. Homeowners within the park purchase a share or membership in the corporation. The corporation then negotiates and completes the purchase process and then, usually, the elected committee becomes the governing body of the now resident-owned park.
Drawbacks
If this process seems a little complicated, it is. The biggest drawback to park conversion is that it takes a lot of organization and consensus among potential members. Some park residents may not want to participate in the conversion process, and their resistance must be dealt with to proceed forward.
There must be enough park residents who are interested in conversion to be able to financially back the conversion process. Some of the residents, though, interested, may have difficulty obtaining loans to back their portion of the membership. The initial cost of ownership is likely going to be higher than the usual cost of renting. While this increased cost usually levels out, the initial cost can be a hurdle.
Mitigating Drawbacks
While there are drawbacks to conversion, most of them have to do with the drawbacks of the process of becoming converted. The way to deal with process drawbacks is to make the process easier by hiring a professional who has experience with successful mobile home park conversion– usually an attorney.
An attorney who regularly works with mobile home park conversions will know how the legal process works in your state, have experience working with resistant park members, and be able to come up with effective solutions to the many potential problems that could arise during the conversion process. Legal counsel is highly recommended if your park is considering conversion.
Benefits
There are many benefits of park conversion, but the biggest one can be summarized as stabilized living. When you are renting or leasing a space in a mobile home park, you are subject to the whims of the owner and the volatility of the real estate market. Your rent could increase, your park owner could decide to sell and evict all residents– you just don’t know. Park conversion ensures stability through ownership of your lot and shared spaces. While residents have more of a responsibility to govern the park, they also now have autonomy to govern themselves.
These big benefits make mobile home park conversion worth the work, but the potential drawbacks that might be encountered during the conversion process require a mobile home law attorney who is competent in successful park conversions.
