‘Right of first refusal’ law may hinder investment in manufactured home parks

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Homeowners within manufactured home parks now have the right of first refusal should the property owner enter an agreement to sell.

The homeowners and/or the affiliated homeowners association must be provided with details of a proposed sale and then would have 60 days to indicate their intent to match the offer. That match would then need to be completed within 140 days.

The legislation was signed into law on Wednesday by Gov. Kathy Hochul and is meant to give residents “a fair shot at protecting their communities from owners who don’t share their vision for the mobile home park,” bill sponsor James Skoufis (D-Cornwall) said in a news release.

“I thank Gov. Hochul for signing this legislation to establish an equitable balance between the interests of manufactured home park owners and residents who seek affordable, secure housing,” he said.

But the new requirement may adversely impact investment, said Jeff Cook, CEO of Rochester-based Cook Properties, the state’s largest owner of manufactured housing communities.

“This onerous extra step represents another hurdle for owners and potential owners of these communities, who will now think twice about making investments in New York,” Cook said. “This legislation will add a significant amount of time to a sale process, which will expose owners to significant market fluctuations and rate adjustments, potentially leading to large losses when compared to a faster close.”

Hochul vetoed a similar version of the bill in January, largely because homeowners and HOAs would have had 140 days to say whether they intended to match a purchase offer. The New York Housing Association, Inc., lobbied hard against the bill.

Under prior law, homeowners in parks were given a right of first refusal only if the buyer intended to use the land for another purpose.

Supporters say the new law will help homeowners safeguard their affordable communities, without unduly hindering unopposed investments in manufactured home parks.

But Cook said investors now will hesitate not just when it comes to the purchase of existing parks, but also in the creation of new communities because of the uncertainties involving a future sale.

“Ultimately this may impair the value of parks in New York and will discourage investors from considering making investments in existing and new communities,” Cook said. “This comes at a time when we should be encouraging such investments as manufactured housing communities can be an integral part of the solution to the affordable housing crisis.”

Once the property owner reaches an agreement to sell, the homeowners and/or the HOA must be given details of the proposed sale, including price, material terms and conditions, and that financing may be available through New York State Homes and Community Renewal.

Hochul also signed two other bills related to manufactured home parks. One authorizes the State of New York Mortgage Agency to purchase mortgages for and offer mortgage pool insurance for modular and manufactured housing and the other aligns state law with federal law when it relates to civil penalties and manufactured housing.

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