Update to MHC Tenant Protections
Manufactured Housing Communities (MHC) tenant protections are expanding. In an effort to protect even more MHC tenants, three of the protections will now apply to manufactured home renters – #2, #3 and #8. In addition, clarifying language has been added to several of the protections to reduce ambiguity. All changes are effective for MHC loans under lender application starting April 25, 2022.
The revised MHC Tenant Protections are as follows:
- Manufactured Housing (MH) Home Owner* is entitled to a one-year renewable lease term unless there is good cause for non-renewal. “Good cause” includes: (1) violations of law by MH Home Owner, (2) an existing default in the payment of rent by MH Home Owner at the time of lease renewal (subject to any applicable grace period and cure rights) and (3) serious or repeated violations of the material terms and conditions of its lease by MH Home Owner.
- Applicable MHC Resident** must receive at least 30-days’ prior written notice of any increase in rent.
- Applicable MHC Resident** is entitled to a five-day grace period for the failure to timely pay rent and has the right to cure any default in the payment of rent within the cure period set forth in its lease, if any. If no cure period for a default in the payment of rent exists in its lease, then applicable MHC Resident has the right to cure any default in the payment of rent within 10 days after the expiration of the five-day grace period described above.
- MH Home Owner* is entitled to sell its manufactured home to a buyer that qualifies as a new tenant in the MHC without having to first relocate such manufactured home outside of the MHC.
- MH Home Owner* has the right to sell the manufactured home in place within 30 days after eviction by the MHC owner, subject to the MHC owner’s right to prevent a dangerous condition, any threat or risk of bodily harm to tenants or visitors of the MHC – provided that nothing in this section prohibits MHC owner from exercising any other right or remedy available against MH Home Owner under law.
- MH Home Owner* has the right to (1) sublease and (2) assign the pad site lease for the unexpired term to the new buyer or sublessee of the manufactured home without any unreasonable restraint – as long as the new buyer or sublessee qualifies as a new tenant within the MHC (including satisfying MHC owner’s applicable credit and background checks and any requirements in the MHC’s rules and regulations).
- MH Home Owner* has the right to post “For Sale” signs that advertise the sale of its manufactured home, provided that such signs comply with the MHC rules and regulations.
- Applicable MHC Resident** has the right to receive at least 60-days’ notice of any planned sale or closure of the MHC. Any MHC Tenant Protection that violates applicable laws or is less favorable to a resident than applicable law will be void and will not affect the enforceability of any other provisions of the agreement.
*MH Home Owner means an owner of a manufactured home at the property (excluding borrower, any borrower affiliate and any third-party investor that rents homes at the property).
**Applicable MHC Resident(s) means MH Home Owners and renters of a manufactured home.
As of today, April 25, the MHC term sheet has been updated with the above changes.