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‘We’re talking about affordable housing’

Bills propose reforms for mobile home parks

Minot mobile home park residents reported a number of complaints in the year after their communities were purchased by Homes of America, LLC, joining a growing outcry against the mysterious company’s business practices.

Many of these complaints allege violations of provisions put in place by 2021’s Senate Bill 2159, including requirements designating an official local office and relating to lapses in communication and responses to maintenance requests. In response to the outcry coming from communities all over the state, SB 2243 was introduced in this year’s session. The bill attempts to address some of the problems mobile home park residents are reporting.

According to multiple residents of HOA parks, general maintenance of the communities largely went unmet for much of the last year, all while lot rent increased by more than 50%. These shortfalls have been attributed to a revolving door of local managers, some of whom quit in part, they claimed, because the owners limited their ability to do their jobs.

Despite assurances that new leases were on the way, and that the increased rents would be used to improve the communities and add amenities, residents are still waiting for many of these promises to materialize. One current Minot resident who purchased a home in one of HOA’s communities last August said they’re still waiting for an updated lease.

HOA’s tenants soon found themselves with few options, resulting in a large number of them moving or selling their homes. Kent French, the Government Affairs director for the North Dakota Manufactured Housing Association, was a cheerleader for the 2021 law, but after receiving a deluge of complaints from Minot residents over the last year, even he conceded there were some gaps.

“I have worked to come up with a legislative fix to help the residents that live in manufactured housing. These out-of-state LLCs could care less about the people that live in their communities,” French said.

North Dakota’s current Century Code allows for nested shell companies and registered agents that leave tenants in the dark regarding who actually owns the ground beneath their homes. Tenants found themselves with few places to turn other than civil court claims to address violations, but any damages they would recover are capped at $1,000, which demotivated many from pursing action.

Sen. Dick Dever, R-Bismarck, who also has been fielding calls from residents of Bismarck mobile home parks said, “It seems like when mobile home parks change hands, the new company needs a kick. We introduced 2159 and it lacked the teeth. Some of the owners thumbed their nose at it. Part of the problem is residents don’t know who the owners even are.”

SB 2243 was introduced by Dever, Sens. Diane Larson and Bob Paulson, along with Reps. Karen Karls, Scott Louser and Keith Kempenich from the House. This bill would introduce provisions requiring additional disclosures for owners and corporations buying them and includes additional penalties for any violations. Anyone seeking a license to operate a mobile home park would be required to provide the name, address and telephone number for the managers, officers, directors, partners and shareholders to the state once a year and would raise the cap on civil penalties to $5,000.

The most significant change would see any owner found to be in violation of any of the provisions of the law facing the suspension or revocation of their operating license, which would pause the collection of all rent from tenants until the license is reinstated. Other changes include language requiring owners to furnish all current copies of lease terms, including all modifications and amendments, upon the written request of a tenant, and an increase in the notification window for rent increases to 90 days in month-to-month lease arrangements.

Dave Anderson, director of the North American Manufactured Home Owners Association, of which North Dakota has a chapter, said the bill provides some “basic improvements to state law,” but said some larger issues are being ignored.

Some of these concerns were brought before the Legislature in the 2021 session, according to Anderson, including the opportunity to pay and stay and longer window requirements for notices related to lease non-renewal and liens. Another critical omission, Anderson said, is the lack of protections for tenants from landlord retaliation, an accusation that has been levied against HOA by home owners around the country.

Valeria Steele, an HOA resident from West Virginia, said multiple individuals who attended a town hall to discuss lot rent increases returned home to find eviction notices pinned to their front doors. Several residents of the Minot Parks who spoke with The Minot Daily News over the past several months declined to speak on the record, citing concerns that management would retaliate against them. North Dakota is one of nine states that do not have laws prohibiting landlord retaliation against tenants.

Dever acknowledged that many residents of the affected communities are passionate and even angry, but he hoped their testimony in support of the legislation will shine a light on what he thinks is the heart of the issue.

“We’re talking about affordable housing. The actions of these wealthy out-of-state investors are creating problems for constituents,” Dever said.

Another bill that has been introduced is House Bill 1328, which seeks to change how mobile home parks are taxed for special assessments. Mobile home parks are currently assessed as commercial properties in the North Dakota Century Code, but HB 1328 proposes that property within a mobile home park may not be assessed more than the rate applied to single family residential property within the district.

Dustin Gawrylow, a Bismarck based political consultant and lobbyist in support of the bill, said the hope is that this tweak to tax law will ultimately ease the struggles of mobile home owners, who have been facing steadily increasing lot rents over the years. Gawrylow stressed the bill was not intended to simply be a tax break for companies like HOA, but rather would encourage owners based in North Dakota to stay in the business.

“When cities tax mobile home parks as commercial, it’s 200% more than equivalent property in a residential zone. The higher taxes get passed down,” Gawrylow said. “Do we punish local ownership because bad actors are coming into the market? I don’t think we should. We can’t guarantee lower rent, but current tax law encourages owners to take it out on the residents.”

SB 2243 has yet to be reviewed by the Industry and Business Committee. HB 1328 is currently being considered by the Finance and Taxation committee and has largely received support in submitted testimony, with opposition filed on behalf of the cities of Bismarck and Fargo and the North Dakota League of Cities, citing concerns over equity and satisfaction with their current tax laws.

No representatives for HOA, including CEO Bryon Fields Jr., have responded to any requests for comment. The Minot Daily News also reached out Abraham Anderson, a mobile home park developer from Tennesse who is a member of a group that currently owns and operates the community Wheatland Village in Minot, but did not receive a response before publication.

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