Buying a mobilehome community can provide you with a constant stream of income. It could also be an excellent investment, as you may eventually be able to sell it to the community or for a profit to someone else.
Buying multiple properties rented out to others as residential homes will inevitably lead to some complications for you as the new owner. For example, the existing leases might let the tenants get away with bad behavior in the units or even assess a rent that is far too low for you to recoup your costs.
Do you have to continue to uphold the leases signed by the previous owner?
Tenants have rights when their landlord sells the property
As the new owner of a residential property already rented out to someone, you have certain obligations to those existing tenants that you cannot ignore. For example, you will usually have to abide by the existing lease unless it has a clause that allows you to end the lease at the time of purchase.
However, you do not necessarily have to renew the lease. If someone has a month-to-month lease, you could potentially terminate that lease in the near future. If they have a 12-month lease or a longer term on their lease, you may have to wait until the existing lease term ends to make any major changes.
Reviewing the leases, keeping an accurate schedule of when each lease expires, and analyzing what terms would work best in new rental agreements can help you reduce the negative impact those old contracts have on your new investment.
Learning more about your responsibilities as a potential owner of a manufactured home community can help you maximize your profits while minimizing your risks.
Contact the attorneys at Hart King if you have any mobilehome related questions regarding leases, refinancing or the purchase & sale of a community. We have nearly 40 years of experience representing manufactured housing community owners and managers and we’d be happy to help guide you through any of these processes.