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  • Publisher of Consumer Reports

    Southwest Regional Office1300 Guadalupe, Suite 100

    Austin, Texas 78701512-477-4431 ! 512-477-8934

    Reggie James, Director

    Janee BriesemeisterProject Director and Contact

    brieja@consumer.org

    Kathy MitchellSeries Editor and Design

    Kevin Jewell, AuthorFebruary 2001

    And very special thanks to Legal Aid of Central Texas forresearch assistance and information about individual

    complainants.

    Manufactured Homeowners Who Rent LotsLack Security of Basic Tenants Rights

    In BriefUnlike apartment dwellers, manufac-

    tured home occupants who rent the spaceupon which their unit is placed currentlyhave no legal rights if a park ownerdecides to terminate their stay. Thesefamilies have no right to a written leaseunder law, and are typically on month tomonth tenancies. This situation leavesthem without basic landlord-tenantprotections.

    Although manufactured homes areoften referred to as mobile homes, theyare far from mobile. Few homes are evermoved from their original installation. Thecost and difficulty of moving these homesplace such tenants in a uniquely disadvan-taged position when dealing with land-lords who can give them 30 days notice atany time.

    This poor bargain-ing position leavesresidents at risk oflandlords demands ofmore money for rent,utilities, or otherservices. Unexpectedexpenses are especiallydifficult for those onfixed income, such asretirees. Nationalstudies have shownthat those of retirementage are overrepre-sented in manufacturedhousing. Underconstant threat of eviction, tenants willlose almost any conflict with landlords.

    Despite the unique problems facingthese manufactured homeowner-tenants,under current Texas law they have neitherthe rights nor the protections affordedapartment dwellers or conventionalhomeowners. Such protection is needed ifmanufactured housing is ever to become asafe, stable environment for Texasfamilies.! Manufactured home owners wholease a lot in a manufactured homecommunity in Texas have no lawsprotecting their rights, and are frequentlytrapped by skyrocketing rents, utility

    costs, and community fees.! The cost to move a manufacturedhome severely limits a renters choices,and renters sometimes suffer significantpersonal loss if they must sell the homeback to the community owner or adealership at fire-sale prices.! Renters should have strong protec-tions against rapid and high rent increases,rights to a renewable long term writtenlease, and protections if a community issold for redevelopment and homes mustbe sold or moved quickly.

    General FindingsTraditionally marketed to retirees and

    very young families, today in Texasmanufactured homes have captured abroad market among all kinds of people

    seeking affordablehousing. The December2000 Current PopulationSurvey reports 1.2million Texans live inmobile homes.

    Manufactured homeoccupants in Texas tendto be younger and haveincomes several thousanddollars higher thanmanufacturedhomeowners nationally,reflecting the wideracceptance of suchhousing here. Themedian age of Texas

    occupants is 29, and the median house-hold income is roughly $30,000. Thereare also noticeably more children inmanufacturedhousing inTexas: 37%of occupantsare under theage of 18, vs.29% nation-ally.2

    Mostmanufacturedhomeresidents livein and near

    August 2000: the San AntonioExpress-News reports on the plight

    of a 90 year old retired schoolteacher. After 38 years in thesame mobile home park, the

    landlord gave all the residents a30 day notice to move off. Three

    days before the deadline, fewerthan half of the residents had been

    able to arrange to move theirhomes.

    December 2000: ConsumersUnion staff visit Bergstrom Mobile

    Home Park, slated for redevelopmentafter decades of operation. Residentssay they cannot find spots to relocate

    their homes, nor can they afford topurchase homes from the new owner,

    Palm Harbor. Many parks are full,and those that have spaces will not

    accept older models and/or styles ofhomes.

    February 2001: Residents of an80-unit Grapevine mobile home

    park must move out because FourPeaks, a company that bought the

    property to redevelop it, plans tobuild single family homes priced up

    to $300,000. We have singlemothers with no place to go in thisarea, a resident told City Council.

    Tell me, what are we to do?.1

  • Manufactured Homes on Leased Lots, February 2001 Page 2 Consumers Union SWRO

    urban areas. 68% of Texas manufacturedhouses are found in urban areas, and11.5% of all mobile homes in Texas are inthe Houston PMSA (Primary MetropolitanStatistical Area). Another 9.9% are in theDallas PMSA. Rural counties generallyhave a higher percentage of the populationliving in manufactured housing, but manyof the rural counties with a very high ratioof manufactured homesare sparsely populated (seetables below).3

    Manufactured homesare an attractive alternativefor many Texas familiesbecause down-paymentsand monthly payments aregenerally lower than those for site builthomes. Often, part of the up-front costsavings comes from placing the home onrented lots.

    In Tarrant County, for example, 65percent of manufactured home owners donot own the land on which the unit isplaced. Percentages may be slightlylower, but still significant, in rural

    counties.4 National statistics aboutmanufactured home loans indicate thatless than 10% of loans include both homeand land as collateral.5

    In 1999, there were 256,323 manufac-tured homes placed on rented lots in thestate of Texas.6 The tenants, about threequarters of a million people, rely upontheir lots for space to live.

    Unlike regularrenters, however, thesetenants have no protec-tion under Texas law.And also unlike regularrenters, these tenantsstand to lose thousands ofdollars in moving costs if

    they have to leave their lot. The industryestimates moving costs for manufacturedhomes to be $1500-$3500.7 Moving ahome can cause structural damage as well.A manufactured home retail salespersontold Consumers Union staff that aftermoving, homes often look like they havebeen through an earthquake, and requiresignificant work to repair.

    Even if owners have the money, thesetenants may not be able to find a place fortheir homes because many parks are fullor wont take used homes. Once a parkfills, turnover of units is very low: usuallyowners sell the unit in place in a park.Sun Communities, a park developmentcompany active in Texas, estimates onlyabout 3% of its occupied lots open up ayear.8 Newer parks, which have openspaces yet to be filled, often dont acceptused homes.

    State LawsThere are over 1,300 manufactured

    housing communities in Texas.9 Some ofthe larger communities are owned orcontrolled by manufacturing companieslike Palm Harbor, Champion, or ClaytonHomes. The larger multi-state corpora-tions are used to working under regula-tion. As of 2000, 37 states had regulationscovering landlord-tenant relations relatingto mobile home owners.10 (See Inset Map)

    Clayton runs 75 manufactured homecommunities across the country, including26 in Texas.11 These communities leaseland to new manufactured home buyers.Other national or multinational companiesoperate parks here as well. Most largernew parks are run by large companies ordevelopment funds. The Austin Edition ofthe 2000 Manufactured Housing Commu-nity & Land Guide lists only seven parkscurrently leasing spaces in Austin (thereare dozens of parks in the city). Of thoseseven parks, all of them are owned bycompanies based out of state.12

    The 37 states with laws governing lotrentals have recognized the potential

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    Most people who live in manufacturedhomes today live in the states most

    populous urban counties.

    In rural counties, a greater share ofthe population lives in mobile

    homes.

    Top Ten Counties by Number of Manufactured Home Titles.Source: MH Current Titles dbase, Texas Department ofHousing and Community Affairs.

    Top Ten Counties by Number of Mobile Homes per 1000People: Source: MH Titles dbase, Texas Department ofHousing and Community Affairs.

    TerminologyManufactured homes are often called mobile

    homes or trailers. The industry encouragesthe use of the term manufactured homefor units built after 1976, but only 10% ofresidents have adopted this terminology.1

    In this report, we follow common practiceand use the terms interchangeably.

    Source: Foremost Insurance 1999 Market FactsInternet Source: http://www.foremost.com/market_facts/

  • Manufactured Homes on Leased Lots, February 2001 Page 3 Consumers Union SWRO

    problems faced by lease-less tenants.Illinois requires landlords to offer a 1 yearlease option with automatic renewalunless landlord has good cause to termi-nate. Arizona limits unreasonablecommunity rules. Florida requires oneyear notice before closure of a park.13

    Oregon prevents a landlord from forcing ahome from the park based on age,architectural style or original materials, ifthe home meets the codes of the date ofmanufacture.14 These states and manyothers provide a wide range of protectionsto their mobile home park residents.

    Texans purchased more manufacturedhomes than residents of any other state in1999,15 and our

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