Buying your community
Owners have all kinds of reasons for wanting to sell manufactured-housing (sometimes called mobile home) parks: Their ages, changes in tax or other policy, maintenance and management challenges, or a desire to realize capital gains (or losses).
Manufactured housing communities are considered attractive commercial real estate investments, so many owners routinely receive calls and letters from interested buyers. An owner who might not be trying to sell a community might be persuaded by an unsolicited offer.
No matter what the reason for selling, in New Hampshire, an owner who intends to sell a community must notify its residents.
Ideally, the owner will tell you before signing a contract to sell the park to someone else, giving you and other residents time to organize a cooperative and decide whether to submit your own offer to buy the park. We call this a “negotiated sale.”
New Hampshire law requires owners of manufactured housing parks to notify every homeowner, by certified mail, when they have signed a purchase-and-sales agreement. They must also provide a copy of the offer that includes its price, terms and conditions.
This “opportunity to purchase” law gives you 60 days from the date of the notice to negotiate in good faith with the owner, form a cooperative and match the offer.
Deciding whether to purchase
No matter how you learn of your park’s owner’s intent to sell, you should cwelch [at] communityloanfund [dot] org (contact us at ROC-NH™) and request a meeting with one of our conversion specialists in your community. At that meeting we will describe the conversion process, financing options, governance issues, community operations, and everything else you need to know when deciding whether to take this important step.
The goals of this first meeting are for everyone to understand the process, ask questions of us and of each other, and decide whether to file incorporation documents with the NH Secretary of State. The incorporation process is very simple: Residents choose a name, fill out a short form, and pay a $30 fee.
Incorporating does not commit you to purchase the community. It merely establishes a legal entity with which you and other homeowners will study the financial and physical characteristics of the community and decide whether to try to buy it. Our experienced and knowledgeable conversion specialists will help every step of the way.
After the decision to incorporate, all homeowners will have the opportunity to become members of the cooperative and you will establish a small membership fee for those who choose to join. These members will then elect an interim board of directors to study all of the financial, legal, governance, and operational issues involved in managing the community.
Making an offer
After collecting and considering all of this information, the interim board will recommend to the membership whether to make an offer to buy the park, and what the terms and conditions of that offer should be. If the membership votes to make an offer, the interim board will work with your lawyer to submit a formal offer and enter into a formal technical assistance contract with ROC-NH.
The Community Loan Fund can provide forgivable deposit and pre-development loans for a deposit and to hire the legal counsel and engineers you will need to study the opportunity.
If the park owner accepts your offer, you will enter into a “due diligence period” during which your engineer will complete property conditions and environmental reports. You will also establish rules and bylaws for the community, create operational and capital improvement budgets, and request bank financing.
As you approach closing, a ROC-NH Post-Conversion Specialist will work with you as you elect a new board of directors to replace your interim board, and establish membership and other committees to operate the cooperative.
If all goes well, you will soon celebrate the purchase of your community!