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Buying and selling in manufactured home parks— the good, bad and ugly. Part II

Manufactured home sales

In 2002, British Columbia's Manufactured Home Park Tenancy Act (MHPTA) was brought in for residents and park operators.

The act introduced many reforms and many of the new rules made a positive difference. However, I believe it can be improved.

It has had a few updates over the years, with the last in 2023 (as far as I know). There are actually four places to look for rules and regulations regarding mobile home park living— the MHPTA, Manufactured Home Park Regulations, policy guidelines, and the Residential Tenancy Branch's Rules of Procedure. One refers to areas in the others, so I will refer to all, collectively, as the MHPTA. These rules do not apply on First Nations' land.

Last week, I covered the RTB-10 form. This week, I’ll talk about more aspects of the act.

Security of tenure: A core focus

Under the new act, evictions are strictly regulated, ensuring residents can only be asked to leave under specific circumstances, such as non-payment of rent or breach of park rules that are deemed reasonable and significant.

Fair rent increases and dispute resolution

Rent increases are now governed by the province. Increases are limited to once a year with three months notice. Park operators must apply for increases that are higher than allowed, usually having to do with large increases in operating costs. I believe this is necessary. Sometimes prices increase more than can be planned for and park operators need to be able to protect their investment and make sure they have the resources required to safely and efficiently run their businesses.

Moreover, the MHPTA attempts to strengthen dispute resolution mechanisms. The goal is to resolve conflicts efficiently and fairly, reducing the need for prolonged and often costly legal battles. For the most part this works where a timely resolution is not always important, there are problems though. I made a call and there is currently an eight-week wait for a dispute resolution hearing.

Compensation for displacement

If a park operator seeks to repurpose the land for different uses (Section 42: Notice landlords use of property), meaning people have to move, the MHPTA mandates what seems to be fairer compensation. Here is a link to the form the park operator would use to notify a home owner in the park. The compensation is designed to assist residents in relocating their homes—about $20,000—or if relocation is not feasible, in covering the costs associated with the loss of their residence in the form of compensation that can be based on the assessed value. It might be a good idea to have the place reassessed if you think it is under assessed and things might change.

That would require an application for dispute resolution. According to my understanding of the act, every situation is unique so consult a lawyer if you are ever in that situation. I cannot give left advice, nor amI trying to to).

This provision is a significant step forward in recognizing the investment and attachment individuals have to their homes and communities.

Important information to remember

I mentioned this last week but it bears repeating, in Part 1 — Introductory Provisions Division 1 it says this act cannot be avoided.

Section 5 (1) Landlords and tenants may not avoid or contract out of this Act or the regulations. (2) Any attempt to avoid or contract out of this Act or the regulations is of no effect.”

You may run across park operators who ask you to sign something that may not be enforceable. As I mentioned before, speak to a lawyer as every situation can be different.

Implications

The introduction of the MHPTA was met with a mixed response. Changes made over the years have improved it. Residents and advocacy groups largely welcomed the legislation, viewing it as a necessary step towards ensuring fairness and stability in the manufactured home sector.

Conversely, some park operators expressed concerns about the potential financial implications of the act, particularly regarding the limits on rent increases and the requirements for compensation.

Looking forward

The MHPTA was a landmark piece of legislation that signalled a new era for manufactured home living in B.C. Trying to strike a balance between the needs and rights of homeowners and park operators, the act paved the way for more stable, secure and fairer housing options for thousands of residents.

Over the years, the act has been improved and hopefully in future, legislators will continue to listen to the stakeholders to further clarify and improve the rules and mitigate any unintended consequences that have arisen.

The MHPTA is not just about regulations, it's also about recognizing the value of community, stability and home for every British Columbian living in a manufactured home park.

The MHPTA is working towards providing a more predictable and stable living situation, allowing those contemplating a manufactured home purchase and current home owners peace of mind. It reflects a broader societal recognition of the importance of diverse housing options and the need to protect the rights of those who choose them.

I have had emails with questions about last week’s column and would encourage anyone who would like more information, or may have suggestions for future columns, to email me and tell me what you would like to read about.

I am always happy to hear from you.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.





B.C.'s Manufactured Home Park Tenancy Act—The good, bad and ugly.  Part I

Selling manufactured homes

In 2002, the British Columbia's Manufactured Home Park Tenancy Act was brought in for residents and park operators in British Columbia’s manufactured home parks. The act introduced many reforms. I think it was a good first try but I believe it was flawed.

The act received a few modifications with its latest revisions in 2023.

The act has a lot in it for the protection for tenants and park operators, too much to discuss in one column. So, I will focus on one important part this time and others in future columns.

In this column, I will I will look at the transfer of ownership and, specifically, the RTB-10 form that is supplied by The Residential Tenancy Branch (RTB). (Note, the act does not apply on First Nation lands.)

Selling and transferring Homes—the paperwork

I believe the act was written poorly with unnecessary barriers and problems. I think the intent was the tenant was to be the manufactured home not the owner of the home. The RTB-10 Form assigns the current tenancy agreement to the new buyer, so pad rent and other provisions of the agreement cannot be changed for a new homeowner without consent. The act could simply state the existing tenancy agreement will be transferred to the new owner, end of discussion.

But like all good bureaucracies, it had to make a form that needed to be approved. If the park operator says no to the new buyer, then the seller of the home has to make an application for dispute resolution, which can take up to six or more weeks. That often collapses the deal.

Many sellers don’t want to use the form as delays can make it very difficult to sell. The standard contract of purchase realtors use for manufactured homes in a park states the seller will sign a request to the park owner and provide any information needed so the park owner may provide consent or approval for the new buyer.

When using the RTB-10 form, the existing tenancy agreement is transferred to the buyer. Problems arise if the park operator says no.

There is no prescribed penalty for denying a RTB-10 request, so many park operators might say no to frustrate the seller so they agree not to assign the existing agreement, allowing the park operator to change rules and raise the pad rent.

If the seller fights it and wins the park operator loses nothing. The agreement simply stays as it was. I believe an administrative penalty of, say $5000 levied against any park operator who rejects a new owner without proper cause (ie: the paperwork wasn’t served properly or the credit rating wasn’t high enough when it was), would go a long way to improving the RTB-10 form.

There are a few valid reasons a park operator may deny a buyer’s application.

According to the form the park owner may not withhold consent to the assignment “unreasonably” or arbitrarily, and may only withhold consent for a request made in the form for one or more of the following reasons:

• The park owner obtains negative credit, reference or other relevant information

• There is not at least one purchaser who meets the age requirement in a 55-plus park

• The purchaser does not intend to reside in the home

• The park owner doesn't have enough information to make a decision about the request because one or more of the purchaser's references could not be reached

• The home owner owes the landlord arrears of rent

View the form in its entirety for a more comprehensive list.

“If the home owner does not have the park owner's request by the end of the 10th day, the park owner's consent is conclusively deemed to have been given, and the home owner may assign the tenancy agreement,” says the form.

The park owner, as mentioned earlier, can deny it and again from the form, “If a park owner withholds consent unreasonably or arbitrarily or for a reason that is not listed above, a home owner may apply for an arbitrator's order that the tenancy agreement is assigned”

There is no penalty for the park owner but there can be a delay of up to six weeks or more for the seller. That can cost the seller the sale.

Buyers want to know they have a place to move into and introducing a two-month or longer delay in knowing if you have a new place to live is often unacceptable (10 days for the “yes” or “no” and then possibly six weeks for dispute resolution).

The RTB-10 form is a great first step in my opinion. I believe revisiting the act and cleaning up some of its obvious shortcomings would be a way to make things more predictable for both tenants and park operators.

Some manufactured homes in parks are worth upwards of $500,000, so owners should be able to sell them with confidence and not worry their investment could be held hostage. Likewise, buyers should be able to enter into agreements knowing they will have a definitive answer in a reasonable time, otherwise the difficulty in transferring home ownership may turn people off from investing in this affordable housing option.

If you are looking at buying or selling a manufactured home in a park, have a discussion with your real estate agent. It may pay off, big time.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



When buying a manufactured home in B.C. do your homework

Manufactured home tips

As the real estate landscape continues to evolve, more Canadians are exploring alternative housing options that combine affordability with a sense of community. Here in B.C., the allure of manufactured homes in designated parks is capturing the attention of prospective homeowners looking for a unique and cost-effective housing solution.

Manufactured homes, often referred to as mobiles or trailers, have come a long way from their humble beginnings. Today, they offer a blend of comfort, style, and affordability, sometimes rivaling conventional built homes, making them an attractive choice for those seeking a more budget-friendly homeownership option.

One of the main attractions of manufactured home living in B.C. is the affordability factor. Manufactured homes generally come with lower up-front price tag compared to traditional houses, providing an accessible entry point into homeownership.

Often, the sense of community within manufactured home parks (MHPs) is a distinguishing feature. Residents can form close-knit bonds, creating a supportive and neighborly environment. This community-centric lifestyle is a driving force behind the increasing popularity of manufactured homes.

Living in a MHP is different than a strata or fee simple land. When you purchase a manufactured home and move it to a mobile home park, or buy one already in a park, it is a little like owning and renting. You get to participate in improving your home and hopefully benefitting from an increase in value over time. If you decide to sell and the home has appreciated in value, you can capitalize on your increased equity.

However, while you own the manufactured home, you rent the spot (pad) it sits on which means the rent is like interest on your mortgage, you don’t get it back.

The park owner, manager or park committee may have rules in place that must be followed. It is worth mentioning the landlord (park owner) must agree to establish a park committee, according to the MHP Tenancy Act guide. These rules may include how many people are allowed to live in the home, whether rentals are allowed, possible age restrictions requiring one tenant to be 55 years of age or older, rules about pets or where to plant trees. Whether there are many rules or very few depends on the park. When looking at a manufactured home always look at the park rules.

When purchasing do your research

When looking to buy in a MHP, you will need to speak with your bank or mortgage broker if you are planning on financing. Not all financial institutions are willing to do a conventional mortgage on a manufactured home. They may offer a “chattel” mortgage (often with a higher rate) or simply say no. Often, the age of the manufactured home will preclude it from financing and may also make it difficult to insure.

When presenting an offer, I suggest always have it subject to obtaining approval for insurance and arranging financing. Ditto for a home inspection, make sure the inspector checks the home is level, the roof is good and the electrical has been approved and inspected. There should be a sticker, usually saying CSA.

Make sure the water lines are properly insulated and have heat tape if needed, as well as everything else. Speak with your home inspector as they are the experts.

The Manufactured Home Park Tenancy Act (MHPTA)

The act is where many of the rules regarding tenancy at a MHP are. The act lays out things such as what happens when you sell your home, allowable pad rental increases, giving notice, how to serve documents, dispute resolution, and more.

One of the big things in the act is Part 1—Introductory Provisions Division. It says: “This Act cannot be avoided… 5(1) Landlords and tenants may not avoid or contract out of this Act or the regulations. (2) Any attempt to avoid or contract out of this Act or the regulations is of no effect.”

Speak to a lawyer for a legal opinion, as every situation can be different. However, in my opinion, it seems to mean you can’t make a rule in the park that goes against the act. I believe forcing someone to sign a contract to rent that states the owner can raise the rent as much as they want, when they want, would probably not be enforceable. Again, check with a lawyer as I’m just a real-estate agent.

It is worth noting rules regarding the act, as well as the Residential Tenancy Act, do not apply on First Nations’ Land. Some First Nations have rules they have enacted to protect tenants and landlords but they can be very different than the provincial rules. Make sure you know what they are before purchasing.

Navigating the world of buying and selling manufactured homes in mobile home parks in B.C. involves understanding the nuances of the MHPTA. By familiarizing themselves with these regulations, both buyers and sellers can make informed decisions, ensuring a fair and transparent process.

I will dive into more of the MHPTA and other regulations and rules in a future column.

It is fair to say as the demand for affordable housing options continues to rise, the manufactured home market in B.C. will remain a viable solution. Just remember, check those rules because it’s buyer beware.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.





Selling your home in a 'buyers’ market'

Real estate sales tips

Last week, there were 374 new (property) listings in the Kelowna area. There were 130 sales, 85 were canceled and 42 expired. There were also 104 price reductions and three price increases.

The market could be shifting to be more balanced, but I still consider it a "buyers’ market" for now.

The real estate market can be a rough ride. Homeowners often find themselves grappling with the challenge of selling their properties during a stagnant or falling market. While it may seem like pushing a boulder up a hill, there are strategic approaches that can help you successfully rise like the Phoenix from the ashes. (Nothing like a couple of metaphors to start the day.)

Set realistic expectations

Realize the process may take longer than in a seller's market and your property may not fetch the same high price. Research conditions in your area, consult real estate experts and adjust your expectations. We are fortunate in the Okanagan, and in B.C. in general, when it comes to real-estate demand. Having a fairly steady influx of buyers from other areas of the country gives us a bit of a cushion. People like to live here and that keeps demand up but it doesn’t fix all the problems and when there are three properties listed for every one sold, well, you do the math.

Pricing strategy

Remember there are only a few variables we can control when selling a home. The old adage that the three most important things in real-estate are location, location, location is very true but unfortunately once you buy your house on a piece of property, the property can’t be moved. So we are stuck selling it where it is. Buying in the right place to start with is a subject for another time.

The condition of your property is something we can control but it may incur extra costs. Maybe we can control the ease of purchasing giving some financing options, however, that’s not always possible.

One thing we can easily control is our pricing strategy. You might be tempted to set a high asking price with room to negotiate but I believe it's essential to be competitive right from the start. Consider getting an appraisal to determine the fair market value. Pricing it right first increases the likelihood of minimizing time on the market.

Consider that, in a falling market, there might be three homes listed for every one sold. Highly motivated sellers, such as those getting divorced, moving for work or those who simply can’t afford to pay a higher mortgage, will lower their price to get to the front of the line. After a few of those sales, buyers will see similar properties they are interested in selling at that price level and will be more aggressive for a better deal.

They may have lots of places to pick from so if you want your home to sell, pricing becomes key. Don’t fall into the trap of chasing the market if you want to sell. Being every buyer’s fifth choice won’t make it easy.

Enhance curb appeal and home staging

You only get one chance to make a first impression, especially in a challenging market. Keeping things in good repair and clean are inexpensive ways of helping attract a potential buyer. Enhance your property's curb appeal by maintaining the exterior, landscaping and making necessary repairs. Something people don’t speak about is smell, make sure things are clean and fresh. Remember the “nose blind” television commercials? Maybe ask a good friend over and see if it passes their “smell test.”

Inside, home-staging can make it more appealing. Talk to a contractor about doing renovations. Kitchens and baths that were recently renovated can have a big impact. Renovations can be time-consuming and expensive and are not always a possibility for all homeowners.

Highlight unique selling points

In a slow market, it's crucial to identify and highlight the unique selling points of your property. We may not be able to alter your location but we can show what makes your home. unique. A renovated kitchen, a spacious backyard or proximity to amenities, emphasize these features in your marketing. Showcase stand out features to capture the attention of potential buyers.

Flexible financing options

This is not for everyone. Offering financing can make it difficult to purchase your next home, so speak to your accountant as everyone has a unique financial situation. If possible, consider offering flexible financing options to attract a broader range of buyers. This could include seller financing, lease-to-own arrangements (before doing that talk to lawyers and accountants to protect yourself) or other creative financing solutions. Being open to different options can make your property more accessible to buyers who may be facing financing challenges.

Pricing it right from the start

In my opinion there is nothing wrong with putting the price at exactly what you want to get the most buyers looking, then holding firm. It’s your agent’s job to explain why your home is worth the asking price, so make sure they are doing it.

Many sold listings I see sell for the list price. However, remember it’s your home and you get to decide how it is listed, and for how much, as well as whether there is a little room to move or its bare minimum and hold tight.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



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About the Author

Anthony Shephard is a real-estate agent with 2 Percent Realty Interior.

He was born in Vernon and has lived in and around the Okanagan his whole life, with the exception of a couple years in Washington State, a few ears in Vancouver and the Lower Mainland, Calgary for a bit and a year in South America.

He has lived in  Kelowna more than 12 years with his wife and two youngest children.

“I have a deep connection with the Okanagan and no matter where I go, I am always pulled back here, it’s understandable seeing as how it’s one of the best places on Earth to live,” he says.

Shephard has owned several businesses in the Okanagan and Shuswap over the years. He has also worked as a computer network engineer, a proprietary stock trader, and a heavy equipment operator in the oilfields.

“As a teenager I spent a lot of time in my father’s real-estate company in the Lower Mainland and have been in and around the business my whole life”

He understands that different people have different needs and strives to fulfill those needs for every client, every time.

anthony.shephard@2percent realty.ca

realestateshephard.com



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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