Your Rights Bytes #17 - Mobilehome Sale Rights and Obligations Confronting Unlawful Interference

By Bruce Stanton, GSMOL Corporate Counsel and GSMOEF Secretary

Homeowners attempting to sell their mobile or manufactured home sometimes encounter park management who fails to timely provide resale upgrade requirements or to process buyer applications.  Days drag into weeks.  Purchasers are kept in the dark about whether they are or are not park approved, and sellers hear nothing about repairs or upgrades, and then receive last-minute repair or upgrade demands just before close of escrow.  This places sellers in a pressurized situation where they feel forced to make the repairs or else lose their sale, and possibly be sued by the buyer.  In many cases these "delays" are intentionally calculated to accomplish management's goal of forcing repairs or improvements, or perhaps stopping the sale all together.  Residents want to know, and need to know what rights they have if management is unfairly blocking or delaying a sale in this manner.

We begin with the fundamental underlying premise that the Mobilehome Residency Law is a consumer protection statute, benefiting mobilehome resident "consumers" who require unique protection under the law.  Its provisions are incorporated within and deemed a part of every mobilehome lease or rental agreement (798.15 (c)).  Its provisions cannot be waived by a homeowner in any contract (798.19).  It contains definitive time deadlines which must be followed and honored by management.  If they are not, then management may be deemed to have waived the right to require certain things, as stated below.  And in the event of a willful violation of its provisions by management, a penalty of up to $2,000.00 for each such violation may be awarded by a court, or punitive damages. (798.86). 

Civil Code 798.74 provides that management "may" (not "shall") require prior approval of a mobilehome purchaser.  Approval cannot be withheld if the purchaser has financial ability to pay the rent, estimated utilities and charges of the park.  798.74 (e) ties the ability to exercise that permissive "prior approval" review process to a mandatory obligation to timely complete review of the buyer's application within 15 business days.  Management SHALL (not "may") then notify the parties of acceptance or rejection.  Failure to do so within the required 15 business days presumes, by silence, that the purchaser is qualified for residency, and would legally allow the transaction to proceed forward.  Management has every reasonable ability to conduct its review within the 15 business days.  Failure to do so could kill the transaction, and management knows this.  If management chooses not to timely exercise their right of review, then the right could be deemed waived.  Failure to provide timely approval, or a rental agreement to the buyer, which results in the loss of a sale, enables a mobilehome seller to sue the park owner for damages in an amount equal to the lost sales price.

The same is true with respect to the issue of mobilehome upgrades upon resale.  Civil Code 798.73.5 provides that management "may" require repairs or improvements upon resale.  But that ability is once again specifically conditioned upon management's compliance with a fixed time deadline.  798.73.5 states that in the case of an "in place" sale or transfer, management SHALL ( again it is stated as a mandatory duty) provide a written list summary of repairs and upgrades no later than 10 business days following receipt of a request for that information.  Typically this would be included in the "Notice of Intent to Sell" given to management by the mobilehome seller.  If management fails to comply with this mandatory "shall" requirement, then, again, management by its silence can be deemed to have waived its right to require any repairs or upgrades as a condition of sale.

The California legislature recognized the importance of these reasonable time deadlines to a mobiehome sales transaction, which like any real estate deal heavily depends upon timing and multiple conditions being met.  Any failure to perform within either of these important deadlines could result in a lost sale.  In such a case, it is park management which could and should be held liable for damages. 

So how can these rights be enforced by a mobilehome seller?  First, a selling homeowner should only hire a broker, agent, dealer or salesperson who will vigorously require park management to abide by these MRL violations.  If deadlines are not meant, they should be willing to push for compliance, or argue that management has waived its ability to require upgrades or approve a buyer.  When management refuses to comply, the seller should hire legal counsel, or file a complaint with The Department of Housing and Community Development (HCD) pursuant to the newly created "Mobilehome Residency Law Protection Program".  Knowing your rights is the important first step.  But enforcing those rights is also critical to preserving your rights as a mobilehome seller. 

Don't forget that once park management chooses to engage either of the above sale-related processes which they "may" elect to pursue, they become obligated to perform the within the time deadlines that the legislature has decreed they "shall" follow.