Colorado law meant to help mobile home owners buy their own parks isn’t working as intended

When Joyce Tanner first heard this spring that the Golden mobile home park she’d lived in for the past decade would be for sale, she wasted no time getting organized.

The resident of Golden Hills Mobile Home Park went door to door with flyers, informing her neighbors about a new Colorado law designed to give the owners of mobile homes the chance to buy the land on which their homes sit.

She organized a resident cooperative and worked with a local organization to get the financing necessary to put in a competitive offer.

Tanner and other homeowners dreamed of the possibilities for what a resident-owned community might look like: solar panels, a community garden, maybe even a jungle gym for the kids.

The residents put in an offer that they know matched or exceeded the terms in the owner’s notice, she said, since sellers are supposed to disclose all material terms for what they consider an acceptable offer.

But Golden Hills’ owners rejected the offer in June without explanation, Tanner and her attorney said. Same with a second offer in August. Residents say they were given no opportunity to match terms given by the other buyer, alleging the park’s owners broke the new law by negotiating in bad faith.

Instead, the owners of Golden Hills informed residents they would be selling to a national corporation that manages dozens of mobile home parks around the country — the types of owners that, industry watchers say, aggressively hike rents and remove amenities that might be costly to maintain.

“We’ve been taken about as seriously as a lemonade stand since Day 1,” said Heather Malone, a Golden Hills homeowner and co-op vice president.

When Gov. Jared Polis signed into law the Mobile Home Park Act in June 2020, those involved with the bill said the “opportunity to purchase” provision would help ensure that the owners of mobile homes in Colorado would be able to stay on the land that they’ve been renting for years.

But more than a year after the new legislation took effect, there are precious few examples in Colorado of residents buying their own parks. Of the 48 mobile home parks sold since the state began tracking sales last year, just two have been purchased by the parks’ own residents.

Residents and industry stakeholders say park owners are sometimes explicitly skirting the law or otherwise taking advantage of vague language to avoid giving adequate notices of sale to homeowners and state regulators — or are simply negotiating in bad faith.

Among the 25 mobile home parks sold statewide between June 30, 2020 — when the law took effect — and the end of 2020, 11 park owners did not provide a copy of the required sale notice to the Colorado Department of Local Affairs, according to state data. Four parks currently up for sale have not provided notice to the state, and it’s unclear how many landlords didn’t provide adequate notice to homeowners.

That dynamic, combined with limited financing options, short windows for residents to organize and delayed state enforcement, has made resident-owned mobile home parks more of a pipe dream than a reality. State regulators have taken notice and are considering new language to better clarify the intent of the law.

“It was a well-intended bill that’s had a lot of negative consequences for folks who really need it,” said Emily Francis, a Fort Collins City Council member who worked with a group of homeowners there in an unsuccessful attempt to purchase their park. “We’ve learned a lot about the process but it’s come at a real high cost for our community members.”

RJ Sangosti, The Denver Post

Golden Hills mobile home park on Sept. 28, 2021, in Golden.

Opportunity to purchase

The “opportunity to purchase” provision came as part of sweeping changes to Colorado’s Mobile Home Park Act — which hadn’t been updated in more than three decades.

Communities of mobile homes, also known as “manufactured homes,” are unique beasts in that residents normally own the physical homes they live in, but they don’t actually own the land on which their homes sit. That land is rented to them by a landlord.

The new legislation signed into law in 2019 and 2020 limits the number of times per year that park owners can raise rent; instituted a state oversight board to handle a dispute resolution system for residents and owners; and put in place a host of requirements for park owners if they decide to sell their parks.

Those requirements mandate that owners give notice to homeowners when they intend to sell the park, when the park is listed for sale and after the landlord intends to make a final acceptance of an offer. After each notice, homeowners are supposed to be given a 90-day window to make their own purchase offer.

In addition, landlords are required to “negotiate in good faith” with homeowners who submit offers to buy their parks.

That’s what the law says. But in reality, residents and housing advocates argue, many landlords are skipping notifying residents — or letting them know after they already have an offer in hand. The “good faith” clause, they also contend, is vague, giving park owners too much leeway in rejecting homeowner offers without reason.

“There are some pretty specific requirements in the law, but whether the owner follows those is an entirely different matter,” said Ann Norton, an attorney representing Golden Hills residents. “Based on what we’ve seen and heard, it seems the owner has not complied with requirements of the statute.”

The first notice the Golden Hills owners sent in the spring did not disclose everything under the law, said David Valleau, the mobile home initiative lead for the Colorado Poverty Law Project. So the owners sent another notice.

With 90 days to put together an offer, residents had to scramble. Tanner hosted community dinners and desserts in the yard for all 38 units in the park to discuss their options. After convincing skeptical residents, they eventually formed a co-op.

RJ Sangosti, The Denver Post

Golden Hills mobile home park resident Pat Martinek in her home on Sept. 28, 2021, in Golden. Some residents of the park including Martinek organized earlier this year and sought to buy their mobile home park from the current owners.

The group enlisted Thistle, a Boulder-based nonprofit organization that helps transition parks from private ownership to resident-owned communities. With the help of Thistle and ROC USA, a national lending firm, Tanner and the co-op submitted an offer. After receiving a rejection, they submitted a second offer. Another rejection.

“Both offers the residents made have either met or bettered the terms stated in the notice,” Norton said. “Frankly, we don’t really know why these offers were not accepted by the owners.”

The park’s current owners, Doug and Laurie Kellogg, declined to comment when reached by The Denver Post. The list of parks for sale on the state website says Golden Hills’ owners “intend to accept sale offer,” and residents there say management recently passed out literature for Harmony Communities, which manages 33 properties with 5,000 residents across the U.S. Representatives from that company could not be reached.

What’s most frustrating, Norton and Tanner said, is that they never understood why the offers weren’t good enough since the owners never gave them a chance to negotiate.

“If there are other terms that are more favorable, or owners consider more favorable, residents should be given notice as to what those are and notice for them to match,” Norton said. “It’s not supposed to be a guessing game for residents — they’re not supposed to have to guess what a favorable offer is.”

RJ Sangosti, The Denver Post

A rent drop box at Golden Hills mobile home park on Sept. 28, 2021, in Golden.

“Time kills deals”

The experience of Golden Hills’ residents is far from unique.

Homeowners at the Hickory Village park in Fort Collins this year tried to buy their park with help from the city — only for the owner to ignore their offer and go with a corporate buyer, residents alleged in a complaint to the state.

Francis, the Fort Collins councilmember who worked with Hickory Village, said the owner feared triggering a penalty after coming to an agreement with the corporate buyer, and that the residents’ offer wouldn’t make up for that lost cash. That piece of the deal, Francis said, wasn’t disclosed to the state.

“It was pretty clear the owner was not negotiating in good faith,” she said.

Hickory Village’s owner, Keith Cowan, declined comment Thursday when reached by phone.

In light of the nondisclosure, the state reset the 90-day purchasing clock for residents. But this time, Hickory Village couldn’t get majority support from homeowners on a second offer. The deal died.

“We did so many ‘know-your-rights’ trainings and the state is saying that you’re important,” Francis said. “Then to have it go this way, I think it’s been really disheartening for folks. It’s just so hard to work with communities and watch them do this, and feel like the deck is stacked so much against them.”

Housing advocates say they’ve gotten complaints from residents across the state, including the San Luis Valley, Western Slope and Eastern Plains, detailing issues with lack of notice on sales or opaque negotiations with owners.

Valleau, the housing attorney, said park owners are “gaming the system” by only sending notices once they’ve already got a deal in the works.

“You don’t get an offer out of thin air,” he said. “I think there’s behind-the-scenes negotiations before that offer.”

One broker of manufactured home communities said he didn’t think many owners try to skirt the law. But he admitted he’s seen companies work on deals before notices went out.

“Frankly, my advice to clients would be, ‘Don’t sign a listing agreement,’” the broker said, referring to an agreement in which property owners authorize a real estate broker to find a buyer. The individual spoke on the condition of anonymity in order to talk candidly about sales tactics. “Get an offer in hand that you want to accept and then give a notice.”

One notice, one 90-day period.

“To have the clock resetting constantly is not conducive to closing real estate deals,” the broker said. “There’s a saying in this industry: Time kills deals. That’s 100% accurate.”

Michael Peirce on Tuesday, Oct. 5, ...

Chet Strange, Special to The Denver Post

Michael Peirce on Tuesday, Oct. 5, 2021, at the Sans Souci mobile home park in Boulder. The park has recently shifted to a resident-owned model, taking control from external ownership.

“It’s definitely not easy to do”

While most mobile home parks in the past year have gone the way of Hickory Village or Golden Hills, two success stories give hope to those fighting for resident-owned communities.

One of those is Sans Souci, an 11-acre mobile home park in Boulder. Residents bought the park in June with the help of Thistle for $3.3 million after three years of organizing efforts.

The key for Sans Souci was that homeowners began to organize in 2018 — well before the opportunity-to-purchase provision existed, said Michael Peirce, president of the homeowners’ cooperative.

“We were already organized and ready to take advantage,” he said. “We didn’t have to pound pavement to talk to residents and try and get them on board. We had already gone through that process.”

It’s possible to purchase under the 90-day timeline, “but it’s definitely not easy to do,” said Andy Kadlec, program director for Thistle.

In order for residents to put in successful bids for Sans Suici and the River View mobile home park in Durango — which homeowners in June bought for $14 million — the “stars had to align for us to meet every deadline,” he said.

“Any hiccup or delay can cause potential for failure,” Kadlec said. “A week for two is often the difference in committing to financing or not.”

Peirce, who also serves as project manager for the Colorado Coalition of Manufactured Home Owners, has made it his mission to help other residents throughout the state join Sans Souci in owning their own parks.

But he admits it’s been disheartening to see only one park so far follow suit.

“I’m a little shocked only two of us been able to do it,” he said. “I would have expected at least a handful by now.”

Michael Peirce on Tuesday, Oct. 5, ...

Chet Strange, Special to The Denver Post

The Sans Souci mobile home park in Boulder, on Tuesday, Oct. 5, 2021.