Cause 6: Manufactured home owners are unable to easily exit the park when conditions change

Residential parks and manufactured homes have evolved. Modern manufactured homes can no longer be practically or affordably relocated from one park to another (or to another place), and the cost of a home cannot be recovered by taking it out of the park and selling it as a significant portion of the home’s value is attributable to its position within a residential park and access to the services and facilities provided.

As a result, the only practical way for a home owner to leave the residential park and recover their investment is to find a buyer for the home on site. Until that sale is completed, a home owner must keep paying site rent or they will be in breach of their agreement and could be required to remove their home from the site.

While home owners carry all the risk of delayed sales, park owners are responsible for many of the things which influence the timely sale of homes, including the maintenance and amenity of the park, the amount of site rent, the terms and conditions presented in new site agreements, and the marketing of the home (where the park owner is appointed as the seller’s agent under a selling authority).

These barriers to exit limit the bargaining power of home owners during negotiations about site rent as they are unable to take their business elsewhere. These circumstances result in limited incentives for park owners to maintain the park’s amenity and services, and reduce competition that may otherwise place downward pressure on site rent once all homes in the park are sold.