Mobile-home owners may get chance to purchase lots they rent in parks Ever-increasing rents hurt equity

October 20, 1993|By James M. Coram | James M. Coram,Staff Writer

Howard County Councilman C. Vernon Gray thinks he may have found a way to help mobile-home owners become lot owners.

Tenants in 12 of the county's 13 mobile home parks own their homes, but rent the land. And as renters, they are vulnerable to rate increases and eviction.

In 1991, scores of tenants -- many of them elderly and on fixed incomes -- faced eviction from two Jessup mobile home parks where they had lived for years.

The owners were shutting the parks down and building a new one on the property. Owners told tenants that they could move to the new park but only if they bought new homes there.

Mr. Gray, D-3rd, has been working with mobile-home owners to help them find a way to purchase parcels they now rent. After a year of study, a 12-member task force headed by Mr. Gray has come up with a plan called the "right of first purchase." The plan, which would have to be enacted by the General Assembly, would give mobile-home owners the opportunity to buy their lots if the mobile home park is being sold.

Lot ownership is essential if young couples are to develop equity in their mobile homes, said task force member Carolyn Wilson, president of the Howard County Mobile Homeowners' Association.

Mobile-home owners have difficulty building equity now, she said, because people do not want to buy a home only to have lot rents increase dramatically. Ms. Wilson's, for example, has gone up 23 percent in three years, she said.

"Three to five years [in a mobile home park] is enough time for a young couple to establish equity," Ms. Wilson said, "but they'll never get out if the rents keep going up."

The purchase plan worked out by the task force would require park owners to offer the land to the county executive, a county housing commission or a residents association made up of at least 25 percent of the mobile-home owners within the park before selling to anyone else.

The terms and conditions of the sale would be the same in every instance. The owner could sell to someone else at a price higher than a residents association, the executive or a housing commission were willing to pay, but could not sell at a lower price or with different terms and conditions until the owner offered the lower price, terms and conditions to the parties with right of first refusal.

The task force looked at various ways homeowners could become lot owners, Mr. Gray said, including an owner-cooperative, a county-owned subdivision, a private subdivision run by the county and a condominium association.

All those options take time, Mr. Gray said, and homeowners want action now. The right of first-purchase idea was "the most viable, feasible, doable short-term option we could arrive at," he said. The right of purchase would go first to the homeowners, then to the executive, and last to a housing commission or authority, Mr. Gray said.

If homeowners couldn't buy the park, it might be possible for either county government or a county housing commission to buy it and allow homeowners to gain ownership of the property by paying off the loan, he said.

Mobile-home owners, many of whom fear eviction if they say anything detrimental about park operations, say they doubt owners would risk banning together in an association.

Presumably, a county purchase would be accomplished through the sale of government bonds. Government bonds would carry a much lower interest rate than a residents' association could achieve through a traditional mortgage. Homeowners would establish ownership through a condominium agreement, Mr. Gray said. They could pay what they are paying now in rent without fear of having the amount increased since loan payments are a fixed amount.

Mr. Gray said mobile park owners object that the right of first purchase plan allows the parties given first refusal too much time -- 120 days -- to commit to a deal, even though the parties would be putting up a nonrefundable deposit of at least $10,000.

The task force had designed the plan solely for Howard County, but it is now being studied as a potential statewide measure, Mr. Gray said. Mr. Gray has asked members of the county's General Assembly delegation to sponsor the measure.

Local initiatives are often passed by the legislature as a courtesy to local jurisdictions and, therefore, are usually easier to enact than state-wide initiatives.

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