Ethics of Park Owners Requiring First Right of Refusal?

[Marc Faulkner]

We buy a lot of manufactured homes and have more demand for them then we can hope to fill this year. That is a good problem to have!!!

Unfortunately I have run into several occasions where the parks are claiming they have a first right of refusal to buy these homes. I have seen this come up in Michigan and Illinois specifically. Would this not be an attempt by the community owner to restrict competition in the sale of ones manufactured home? This would lower the resale value by limiting the market to only those wanting to buy the home and, keep it in the community/park. This has come up, on several occasions, after we have had homes under contract. I appreciate your thoughts in advance. This feels like dirty pool to me.

[Jim Johnson]

Marc, As a park owner I use these on a limited basis. Lets say someone wants to sell the home, they are moving and can not pay space rent- or worse- lets say they are behind on space rent and they are needing to sell as a way to get out from under the debt. I will sometimes exchange a first right for not prosecuting back space rent. The back rent is still owed, but the home is tied to it getting paid. So if the home was going to sell to someone that was going to pull it out, they would need to pay the back space rent or, I might choose to give the homeowner the same money, less the back space rent, and keep the home in my park. A first right does not set a price, an option would. So this would really only affect the home purchaser- but not the sellers ability to get top dollar for the home. The home owner would not know if the first right was going to be tripped until the park owner had an offer to meet. I can see how it would feel a bit like a rug being pulled out from under your feet. So I am guessing your purchasing homes and moving them- working off that premise... you can make sure everything is paid and up to date- then move the home, then buy it from the owner. So now the owner is moving the home and the park would have a very hard time stopping someone from moving their home. If challenged the park would loose unless they had a restrictive lien on the home. So you pay for the move, then as soon as the home is in the new park, change the title over to your name.