As I always say, you never go broke taking a profit—and you’re going to want to keep that in mind before you consider emptying your mobile home park as a condition of sale in Washington State. Why? Because you’re going to run into Washington’s 1-Year notice rule.
If you’re a mobile home park owner in Washington, you know the importance of affordable housing—after all, housing costs continue to go up across the Pacific Northwest. Most rules that focus on the closing of mobile home parks are created for one reason—to preserve affordable housing. And Washington’s 1-year notice rule is no exception. Parks offer affordable living opportunities for people who can’t afford to buy homes, but don’t want to live in apartments. So, if you’re considering selling your mobile home park, there’re a few things you need to know about this 1-year notice requirement, and how it can affect your bottom line.
Washington’s 1-Year Notice Requirement—and Exceptions to the Rule
The 1-year notice rule is pretty self-explanatory. If you decide to close your park, you have to give your mobile park tenants one year of notice. This is covered under Washington’s Manufactured/Mobile Home Landlord-Tenant Act. It gives four requirements for owners closing down a mobile home park in Washington:
- Give each homeowner a minimum of 12 months notice in writing
- Deliver a copy of this notice to the Office of Mobile/Manufactured Housing
- Record the notice in the auditor’s office for the county where the park is located
- Post a copy of the notice at all park entrances
The 1-year notice might seem pretty unwieldy, but luckily there’s a big exception. All you have to do is sell the park without closing it. If you aren’t closing the park, and are just transferring ownership to a buyer, the rule doesn’t apply. You don’t have to give any notice at all. But, if you do decide to close your park and proceed with the 1-year notice rule, know that closing your mobile home park can be a nightmare.
Why It’s Best to Avoid Closing a Park in Washington State
If you thought opening your mobile park was hard, you have no idea how much harder it is to close one down. Once you give the 1-year notice to the tenants, it will create a chain of unpleasant events. First, your best tenants will pull up stakes and move somewhere else—they’re not going to wait around for a year to leave. So, with that notice, you’ve lost about a year of rent from good tenants that you can’t replace.
Next, your unreliable tenants will probably stick around during that notice period, usually because they can’t move somewhere else due to poor rental history. When they leave, they may leave without paying rent, cleaning up their space, or taking care of any property issues—they know that if you are closing your park, you probably don’t want to waste time with landlord-tenant disputes in small claims court. Also, if the park doesn’t exist, they know that future landlords aren’t going to call you for a reference. So what’s to stop them from just abandoning their home and sticking you with the bill? Virtually nothing.
Finally, you won’t be able to get any replacement tenants—the first thing prospective tenants will see when they drive into the park is the notice of park closure posted at every entrance as part of the 1-year notice rule.
This is a recipe for financial ruin, and I’ve seen it happen first hand. I ran into one situation with a park where the family who sold it had to declare bankruptcy because they chose to empty their park prior to selling it. They made a deal with a buyer, and as a condition of the sale, they had to empty the park out so the buyer could develop it. They gave the notice, and began to go through all the trouble of emptying the park. Then, the buyer’s financing fell through. The family was stuck with an empty park that was worth significantly less than when they started the process.
A full mobile home park is worth much more than an empty one, as buyers know they’re getting rent-paying tenants right off the bat. If a park is empty, or being emptied, any new owner would have to either redevelop the site, or attempt to fill all those homes up again. Instead of being a turn-key operation, you have a fixer-upper that would require a lot of money be invested to make it profitable again.
Making Washington’s 1-Year Notice Rule the Buyer’s Problem
The thing you need to take away from this story is that you, as a mobile home park seller, should never agree to take responsibility for the 1-year notice rule as a condition of a sale. If the person buying the park wants to shut it down, then they should be the one responsible for meeting those 1-year notice requirements, not you, after the sale is complete. Make sure it’s clear in the agreement that they’re responsible for closing it down and giving notice to the tenants. After all, that’s what the law is there for—it’s designed to preserve public housing, and as a mobile park operator, you’re an important part of that.
If someone comes to you asking you to empty a park as a condition of sale, run as fast as you can in the other direction. This is probably going to end poorly—for you and your tenants. If you want to avoid Washington’s 1-year notice rule entirely, and keep your tenants happy, then choose a buyer who isn’t buying your park just to flip it, but to manage it. Your tenants will keep their homes, you’ll get paid for the sale when your property is at its maximum value, and you won’t have to worry about giving anyone notice.
If you’re selling your park to the right person, you shouldn’t be dealing with Washington’s 1-year notice rule at all. Stick to selling to an owner-operator like me if you want to save yourself the headache of a park closure. I buy mobile parks to run them, not close them—and I’ll never ask that you empty your park out as a condition of the sale.