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9. Manufactured Homes

(d) Manufactured Homes on Rented/Leased Pads

When licensees are involved in the sale of manufactured homes on leased or rented land belonging to a third party, a number of precautions must be taken at the time of taking the listing and when writing the Contract of Purchase and Sale. The British Columbia Real Estate Association has created the ‘‘Contract of Purchase and Sale of a Manufactured Home on a Rental Pad.’’

It is recommended that the seller’s representative do a title search on the land containing the rental pad to ascertain ownership and the presence of any head leases or options which could have an impact on future rents to be charged. The sale of the park may compromise rental agreements that are not properly in force. Provision for future escalation in rents or lease payments between the landowner and lessee may come as a surprise to inadequately informed tenants.

The Manufactured Home Park Tenancy Regulation sets out an orderly process for assigning and subletting manufactured home pad tenancy agreements.

Key features of the regulation are:

  • a process and form for homeowners to use when requesting the park owner’s consent to assign to a purchaser or sublet to a subtenant;
  • a process and form for park owners to respond to the request;
  • park owners will have up to 10 days to consider the request;
  • the park owner’s consent will be deemed if the home owner does not receive the response within 10 days; and
  • the park owner may only withhold consent for one of the permitted grounds set out in the regulation. The regulation also clarifies the meaning of assignment and sublet.

When a homeowner assigns to the buyer of the home, the tenancy agreement continues on the same terms, including the rent, as existed before the assignment. The buyer becomes the tenant of the park owner and takes on the rights and responsibilities arising under the Manufactured Home Park Tenancy Act and the tenancy agreement.

When a homeowner sublets, the homeowner becomes the landlord to the subtenant, but the homeowner also continues to be the tenant of the park owner and continues to be responsible for the rent and other terms of the tenancy agreement during the subtenancy.

In addition to the regulation, the Manufactured Home Park Tenancy Act allows arbitrators to order an assignment or sublet if the park owner withheld consent unreasonably or arbitrarily or for a reason not permitted by the regulation.

The request for consent to assign and request for consent to sublet forms are available in Residential Tenancy Offices and on the RTO website.

Sale of Leasehold Interests Clause

Seller will deliver leasehold interest free and clear of all financial encumbrances. Seller will assign the Buyer all rights, title and interest and the Buyer will assume all payments, obligations and covenants in the lease. Seller will provide reasonable assistance, at the expense of the Buyer, in obtaining consent to the assignment of the lease before the Completion Date. If the consent to the assignment cannot be obtained, this agreement will be null and void. It is understood that the lease has a term ending (date) .

Subject to the Buyer receiving and reviewing the head lease and any schedules of rules and regulations to the Buyer’s satisfaction and approval on or before (date) .

A copy of the head lease with each page initialed by the Buyer as having been read and approved will be required by the Seller.

This subject clause is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal’’

At the time of sale, the buyer may require a number of conditions which are peculiar to manufactured homes on rented pads. Many parks have rules and regulations for tenants dealing with usage, pets, age, children, etc., and the buyer/tenant must have an opportunity to review their contents. The licensee must not assume that all leases or rental agreements from a common landlord are identical. A copy for the specific pad must be obtained in every case.

Buyer’s Approval of Rules and Regulations of Manufactured Home Park Clause

Subject to the Buyer approving the rules and regulations of (name of manufactured home park) and being accepted as a tenant on or before (date) .

This condition is for the sole benefit of the Buyer.

OR

The Buyer has received copies of the rules and regulations of (name of manufactured home park) and acknowledges acceptance of them.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

If a buyer requires financing, the lender may require the buyer to obtain a priority agreement signed by the landlord, allowing the lender to register a security interest and to acknowledge that the park owner has no financial interest in the manufactured home.

Buyer’s Permission To Register a Security Interest in a Manufactured Home Clause

Subject to the Buyer obtaining a site lease or priority agreement in a form acceptable to (the lender) on or before (date) which will allow the lender to register a security interest in the manufactured home.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

Licensees should recognize that under section 28 of the Manufactured Home Park Tenancy Act, a seller and buyer of a manufactured home in a manufactured home park must obtain the consent of the landlord to sublease the pad from the former tenant (the seller). Some park managers require an interview with the prospective buyer/tenant. Although the Manufactured Home Park Tenancy Act states that consent may not be unreasonably withheld, a buyer must not be placed in the position of having an unconditional purchase of a manufactured home with no pad to rent. If the landlord withholds consent, the tenant should seek legal advice.

Seller’s Permission To Sublet a Pad for a Manufactured Home Clause

Subject to the Seller receiving consent to sublet to(name of proposed occupant) his or her interest in the tenancy agreement for pad number (number) as provided by section 28 of the Manufactured Home Park Tenancy Act on or before (date) .

This clause is for the benefit of the Seller and the Buyer.