Property legal page Mobile Home Park (2023)

Have you heard of the popular 1960s TV legal drama Ironsides? Well, in this case, "Ironsides" meets "metal sides" - the cool side of owning an RV park. This is the first in a five-part series where we discuss what every park owner needs to know about the law. We are not lawyers and do not provide legal advice. We're just going over the things we've learned over 20 years of owning a park and how that applies to issues that come up from time to time. If you're concerned about avoiding danger (and who isn't), you'll enjoy this discussion.

Episode 34: The Mobile Home Park property transcription legal page

Iron sides vs metal sides. This is Frank Rolfe from the Mobile Home Park Mastery podcast. We're starting a five-part series on the legal side of park ownership. Yes, a lot of people, when they think of the legal world and trailer parks, they immediately think of shows like Cops or Judge Judy or things that you see our residents involved in, but there's also the legal side of landlords themselves and the issues that they are dealing. with which they have to deal every day.

So we'll cover the top five things you need to know as a park owner, with lots of tricks, thoughts, and insider knowledge gained from 20 years in this business. But let me tell you first, I'm not a lawyer. I was never a lawyer. So what I'm about to say is not legal advice. I have no desire to provide legal advice or be responsible for providing legal advice. Instead, I will only give the observations that I have paid many lawyers for their advice. It's not really a counseling session. It's more of me just talking about things I've learned over 20 years of RV ownership sessions.

So the first thing we're going to talk about in this five-part series is parenting. No, we are not talking about baby boomers. We are not talking about intergenerational families. The grandfather concept means if you have something that has been zoned a certain way. If they changed the zoning or any other law in the city after that date, it doesn't matter to you. Let's start with the three basic classifications in the world of zones. You have legal zoning. You have illegal and you have non-compliant legal. Legal compliance means you can rebuild this trailer park today. Then you have the right zones. You have the right spacing. You have everything you need to rebuild this park from scratch today. This is called legal compliance.

There is another variety, called illegal. What does that mean? This means that the park was built without any permits. A guy came one day, built a park, maybe in the middle of the night. Maybe on the weekend. Of course you can't build one, we all know that. But you'd be shocked at how many cities look the other way when Mom and Dad built their trailer parks. We saw some giant illegal parks. Things that are raised for hundreds of lots, but the city never closes them. The problem is, as a buyer, if you buy this caravan, they can shut you down right away. Thus, it is simply impossible to buy illegal RV parks.

However, there is a third variety, called nonconformity. That is, it was legal when it was built, but today it does not comply with current guidelines. So illegal. Today, legal non-compliance is known, generally in the United States, by the slang term "grandparents". So let's take a look at what's great-grandfather and what's not, and what you, as a park owner, should know. Basically, a caravan park is like a car park. If you look at the first You Tube videos, what do you see? A typical trailer park literally started out as a paved or cleared field. And people would bring their trailers and park them there, and of course that's where the word "trailer park" comes from. Now a modern trailer park looks different, today we would look more like a housing project with grassy yards, driveways, garages and the like.

However, we are at the end of the day, back to those early roots, the parking lot. So we have everything in common with a typical park and fly airport car park. Or this downtown parking lot next to the office building. So when you are in the parking lot, you can have so many places to park your cars. And then even if they change the law and require or demand that parking spaces be three times as big, you can't park in that area anymore. Your existing parking lot is ready to use until the end of time. As long as you haven't already abandoned it and it hasn't been destroyed by some weather event.

And of course you can't really destroy a parking lot. Think about it for a moment. How would you destroy the parking lot? A hurricane cannot knock it down. It is impossible to get rid of it during a flood, the water will eventually subside. There really is no way to get rid of parking. Regarding opt-out, if you have at least one sign-up that says "Parking Spaces Available" and a working phone line, you are deemed to have never opted out. You may not have any cars in it, you may just be a bad businessman with very high fees. But the simple fact of having or not having customers doesn't mean you stopped using.

In fact, trailer parks really never die. You really cannot get rid of them by the normal procedure. As a result, almost every trailer park you're going to buy if you're a grandpa. It means that it still has the right to operate based on this beautiful license that it had at the time it was built. It doesn't matter what the city has done since then. Maybe they changed the law. They could ban trailer parks. They can have their front backed 300 feet from the street, it doesn't matter. Only the law and rules in force at the time of construction of the park matter.

Why do so many cities misunderstand RV parks? Why don't they understand grandparents in trailer parks? This is very easy. If you're a city inspector, you're classically trained to understand only crap about real estate. So what does that mean? That is, if you have a house that is real estate, in the city and that house was blown up by a tornado and it is no longer legal, but this house was illegal. Maybe it was too big. Maybe it was close to the street. Bottom line is you can't put it down because this house was grandpa's. Our industry is different because our usage, our parking, is what is inherited. But those houses in the parking lot are movable, personal property, not real estate. So they can come and go, it doesn't matter to us. Our only use of the property is parking.

Many inspectors are very confused. They see an empty lot in their trailer park and say, "You can't put a trailer in it." But they are dead wrong. Of course you can put a mobile home in it, why not? He's totally great-grandfather. Because what they're used to is that when that property is gone, you can't bring it back, but it's not real estate. This is personal property. It is basically defined in many areas as a car. The car is not real estate. The fact that you have a car parked in the driveway of a house that's blowing a tornado doesn't change things. This car has no real estate rights. The bottom line is that RV parks are basically parking lots. They are totally obsolete from the day they were built. And you really can't get rid of them.

So it's a bit of the world of grandparents. Why do we have so many problems in the grandparent industry? First, many inspectors don't understand how this works. But you think this can be easily remedied. But the biggest problem is that most cities hate RV parks. They hate them with a passion. Now that I joined the company I thought they hated them because they didn't like the locals. They thought, "Oh, I don't want these people in my town. Let's kick them out of town." But that's not really the reason. Later, as I serve in various city jobs here in my small town and get to know the ins and outs of city administration better, what is really happening is cities view trailer parks negatively because they lose a lot of money to the city. .

Let's look at that for a moment. Let's just take an example if you have an RV park and say the lot is valued at $30,000 in real estate. And the house at the top is valued at $10,000 as personal property. That gives you $40,000 in taxable value, which in a state like Missouri would give you $4,000 a year... Sorry, $400 a year in property taxes. Basically $40,000 at 1%. Let's say you have two kids in this mobile home who go to school. Each of these children costs the school district about $7,000 a year in tuition. Therefore, the city has $14,000 in costs and only $400 in revenue at the outset. So he immediately loses $13,600. Also, many trailer park residents are uninsured, health insurance. Or they don't have adequate health insurance. So every time they go to the hospital because someone broke their arm or for some other reason. The city takes it on the chin once again. There are another thousand, another thousand dollars. When you consider that amount of loss and its multiples of 50, 70, or 100 lots, you can immediately see why cities don't like RV parks.

Think of all the competing land uses and the division of losses into gains that the city has on them. Take, for example, an office building. The office building has plenty of property tax revenue but has no exit costs, unless one day someone has to call the fire department once a decade. Therefore, it is a very profitable land use. However, there are even more profitable land uses. Suppose you have a mall. Not only do you receive property taxes, but also sales taxes as a result of the mall. So if you look at the different land uses and evaluate them in terms of profitability for the city. You will see that RV parks are the last. This causes hostility to the city and therefore they would love to tear down the parks. But they can't because at the end of the day they still have to fight this law called great grandfather.

Thank God for great-grandfather. If it weren't for the garbage, I can guarantee you that every city in America would close every mobile park within 10 minutes. But because of the grandparents, they just can't. It has now been tested. Cities will tell sometimes. "Hell, I hate this trailer park so much, I don't care what the law says, I'm getting rid of this thing." So, even though they can't do that, they're going to file a lawsuit against the park to try to close it. It's been tried, it never works. Just a few years ago, the city in Mississippi tried to do something like this with a park. The park owner took the case to the Mississippi Supreme Court and they won. In fact, the case went to the highest court in the state no fewer than four times, and each time the park owner won and the city lost.

So the park owner now has a perfect score. Why? Just because it's cool. Not because the park owner was so eloquent, or because they hired Effley Bailey or an expensive law firm. The reason is that the city is always wrong about this. Great-grandparents' law is essentially a national law and is something that cities, despite their wishes, simply cannot overcome the de facto rule of law. In fact, if you had a problem with your great-grandfather today, probably the best thing you can do is take the Mississippi Supreme Court decision and just give them a copy of that decision. Because if you had to go to court, I suppose you would probably bring it up as case law. And it details exactly all the arguments and all the legal value of each argument.

So it's safe to say that parks aren't disappearing and grandparents won't do anything to make them disappear. So we hope that over time the cities will calm down about all this. Additionally, the game recently received an additional skin when the park's owner introduced the concept of discrimination in a similar city-against-park lawsuit. And they appealed to the HUD saying that not only was the city to blame for trying to take their park out of town, but they were doing it because of discrimination because they didn't... Basically they didn't like poor people. Well, the park owner won again. And it's very scary for the city according to the HUD decree on this case that is now case law. The city is now being researched by the HUD, I believe for the next four years. So everything they do has to go through the HUD for non-discrimination.

As a city worker, you can imagine how daunting and redundant it is to take everything you do to the HUD for double or triple discrimination checks. So I think there is a big discussion going on that will reduce the garbage even more. In Texas, we have the Texas Mobile Home Association, which has managed to step in and actually change Texas laws. Texas now has a state mandate that cities cannot stop you from using any of your vacant lots. You already know that you have to worry about even grandparents fighting, simply because they can't do anything about it. They went from an optional municipal matter to essentially state law.

Either way, trash is a very, very powerful force. This is the law. This is a fact. That's case law, there's really no way around it. You can't get over it. It's there for everyone to see. So while this is one of the biggest issues for a park owner, you will have to deal with it from time to time. Fortunately, you have a nearly perfect track record of success. Now, if you don't have vacant lots, it's quite possible that you will never have to solve this problem. This problem usually only occurs when you have a park with vacant lots that you want to use. And the dodgy inspector says no you can't. So you might get really lucky and never have to deal with this problem, ever in your mobile park career. However, more than likely, if you have at least one vacant land, it can appear from time to time. But the good news is that in over 20 years of doing this and owning RV parks, we have never lost a case. Again we have a perfect result in the world of grandparents. It's very comforting for us.

I hope everyone has learned something from this discussion about grandparents, the legal side of park ownership. We'll be back soon with another one in our five-part series.