3 days ago
Maine lawmakers give mobile homeowners a leg up in park purchases
Jun. 12—Lawmakers on Wednesday passed a bill to give mobile home residents the "right of first refusal" when their parks go up for sale, but it won't go into effect quickly enough to benefit Friendly Village, a large park in Gorham awaiting a decision on its multi-million offer.
The bill, LD 1145, was enacted in both the state Senate and House of Representatives this week and now awaits a signature from Gov. Janet Mills. It did not receive the two-thirds majority needed to pass it as an emergency, which means it would have gone into effect immediately after receiving the governor's stamp of approval. Instead, it will take effect 90 days after the Legislature adjourns.
Mobile home parks in Maine and across the country are increasingly being purchased by out-of-state investors who raise the monthly lot rents, in some cases doubling or tripling prices, according to national data. Park residents own their homes but not the land they sit on and are essentially helpless against rent increases. They could sell their homes but would need somewhere else to go. Plus, it's harder to sell an older mobile home in a park with high lot rents. An estimated one-fifth of Maine's 468 licensed parks are now owned by out-of-state investors.
Following the passage of a 2023 "opportunity to purchase law," several communities, including ones in Brunswick, Bangor and Monmouth, have formed cooperatives to purchase their parks. But more than twice as many have failed, even with offers above those of the competition. That law only requires the seller to negotiate "in good faith," not accept the offer. Many park owners aren't willing to gamble against a sure thing by accepting an offer from a cooperative that might struggle to get the financing together.
The bill, proposed by Sen. Tim Nangle, D-Cumberland and supported by the governor's top housing advisor, requires that the seller choose the residents as long as their offer is at least at the same price and has "substantially equivalent terms and conditions."
Massachusetts, Rhode Island and Connecticut all have right-of-first-refusal laws.
The bill is intended to give park residents the "opportunity to have some self-determination," Nangle said previously.
Nora Gosselin, director of resident acquisitions at the Cooperative Development Institute, said right of first refusal is the "gold standard" and that Maine's legislation draws on 40 years of similar laws, ironing out issues that other states have run into.
The Cooperative Development Institute helps manufactured housing communities looking to purchase their parks and provides ongoing support after the sale.
"I think there's a lot of heartache when you have a group of residents that has done all of this work organizing ... (to) get to that point, put their offer in and get rejected for the same or equivalent" amount of money, she said. "In right of first refusal states, we just don't see that."
At Friendly Village, one of the latest parks in Maine to go up for sale, residents received notice in April that a Wyoming investment firm had put in an $87.5 million offer for their 300-lot park and seven others in different states. The firm, Crown Communities LLC, offered $22 million for Friendly Village, specifically. Under state law, the residents had 60 days to decide to attempt to purchase their park.
The Friendly Village Cooperative said it submitted an offer above $22 million two weeks ago and is waiting to hear back. The sale, whether to the cooperative or to Crown, will likely be complete by the time the new legislation takes effect.
But the residents aren't entirely without hope.
A different bill, sponsored by Sen. Chip Curry, D-Belfast, could stop the sale of mobile home parks with more than 25 lots for three months after the Legislature adjourns.
The moratorium has exceptions for sales between family members and for communities whose residents do not wish to purchase the park.
The bill is proposed as an emergency and if it gets enough support, could halt the pending sale of Friendly Village for long enough for LD 1145 to take effect. The bill received initial approval by the Senate Thursday but by a narrower margin than the two-thirds required.
Sen. Joe Baldacci, D-Bangor, called the bill "drastic."
"Passing a statewide moratorium on the sale of all mobile home parks in order to satisfy one particular situation is, in my view, not appropriate public policy," he said.
But Curry said the moratorium would delay, not prevent, sales, and that while it might help Friendly Village, there are other parks receiving similar notices.
"We have legislation to better support residents to buy their own communities, we're just looking for this pause so that we can get those laws into effect," he said.
The Legislature also passed a bill that could dis-incentivize future investor purchases. The bill will go to the governor for approval.
Proposed by Sen. Cameron Reny, D-Bristol, LD 1016 will impose a $10,000 per-lot fee when an investor with a net worth over $50 million moves to purchase a park. That per-lot fee (which would amount to an additional $3 million for a park like Friendly Village) will go into a preservation fund to help resident groups compete. Resident cooperative and small businesses would be exempt from the fee.
Gosselin, at the Cooperative Development Institute, said the legislation is, to her knowledge, "the first of its kind" and sends a message to large equity firms that if they intend to buy a park in Maine, they better be prepared to make a real investment in the state.
"It's a pretty elegant way to bolster resident ownership," she said.
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