Among the myriad options to choose from when undergoing a mobile/manufactured home park conversion is to create a “cooperative style community.” Once approved by a Final Public Report from the California Bureau of Real Estate, the new owners/residents can start the process of establishing operations.
Residents purchase shares in a corporation that provides them a long-term lease, also known as an occupancy agreement. The document gives them not only sole use of the property but also voting stakes on park-related matters and the opportunity to run for a seat on the board of directors.
Essentially, the corporation owns the park and can be funded not only by membership shares but also:
- US Department of Housing and Urban Development (HUD)
- The MPROP program through California’s Department of Housing and Community Development
- Bond financing
Once formally established, the corporation becomes a defacto homeowners association that must adhere to California law. The board of directors, elected by the owners, will oversee corporate operations with the help of a professional management company. Two of their most important responsibilities are the monthly collection of dues and using that money to pay all financial obligations.
There are many advantages in moving forward with a cooperative style conversion. The bureaucracy that comes with securing government approvals is more straightforward than other processes. As with any real estate transaction, the biggest challenge involves obtaining financing.
Not all mobile home parks are the same. For many, cooperatives are the best option based on certain circumstances. Some communities may find that other choices are best suited for them. Regardless of what path is taken, legal help can help smooth the process and avoid possible errors and missteps.