Cause 2: Complexities and inefficiencies with the assignment process

Selling home owners can assign their site agreement to a buyer of their home. The terms of an existing site agreement are often more beneficial than the terms of new site agreements. However, the assignment process is often not well understood by buyers and sellers, and park owners often have a strong preference towards new site agreements.

New site agreements create an opportunity for park owners to increase site rent and change the basis on which it can increase. In parks with market rent review clauses in site agreements, the new higher site rent creates upward pressure to align all site rents with the new ‘market’ level. In the 2022 survey, home owners who entered into new site agreements were financially worse off than home owners who were assigned an agreement, resulting in less sustainable site rents for those home owners.

However, home owners who entered into new site agreements were more likely to think there was a clear and fair process for selling a manufactured home, compared to survey respondents who were assigned an existing site agreement. This suggests that new agreements may have non-financial benefits for home owners arising from a simpler process with clear, accurate and updated information.

The complexities involved in the sales process can result in disputes, slow down sales, and increase the barriers to exiting the park for home owners.