Current legislation introduced in both the state House and Senate would prohibit a specific type of landowner from selling their real property for just over one year after the land is advertised for sale. This would only apply if you’re the landowner of a manufactured housing community.
Advocates for manufactured home owners, who rent the lots their homes are located on, are trying to buy time for the tenant-homeowners to form a group and make an offer on the advertised community they live in. Or in other words, they want to provide an “opportunity to purchase” for the tenant-homeowners.
In 1993, the state had a “right-of-first-refusal” law that stipulated the landowner must wait a period of time before selling to a third party, and then sell only to the tenant-homeowners’ group if they made an offer and ponied up a 2% earnest money deposit.
But the state Supreme Court ruled in 2000 that the state’s constitution prohibits the taking of private property from one person and giving it to other private parties for their private use. Therefore, the court invalidated the right of first refusal law.
Washington’s Constitution, Article 1, Section 16 is quite strict, and there was no public use identified in the old law.
This year, House Bill 1129 and Senate Bill 5198 seek to impose a no-sale waiting period of 45 days on the landowner, and then extend the no-sale period another 12-months if any tenant group or nonprofit expresses a faint interest in buying the property. No earnest money would be required by the legislation.
Even though the landowner wouldn’t be required to sell to a group of tenant-homeowners or a nonprofit in the legislation, the taking of the right to sell your land at any time constitutes a violation of Article 1, Section 16, because no public use would be established.
This year, and also in 2007, 2017, and 2020, legislation keeps being reintroduced to impose a no-sale period on a landowner of a manufactured housing community in order to give time for tenant-homeowners and nonprofits to circle the wagons and perhaps make an offer. What should be noted is that these interested groups are free to organize and make unsolicited offers at any time, just like the private market.
The 2007 legislation originally proposed a 90 day no-sale period if the property was advertised for sale, or a private offer was received. It had a complicated back-and-forth process of notices from the landowner and reply notices from a tenant organization or other eligible organization, forcing disclosures of any offer details and financials. It was very similar to the 1993 right of first refusal law but fell short of mandating a sale to the tenant-homeowners.
What was finally enacted into law in 2007-08 was a simple “notice-of-sale” requirement for the landowner to send out a notice that the manufactured housing community was publicly advertised for sale. Each tenant-homeowner and four government agencies were required to receive the notice of sale from the landowner. In the end, the law didn’t impose a no-sale waiting period.
Since 2017, more and more penalties have been added for landowners not following their notice requirements and proposed no-sale waiting periods. One year, some lawmakers proposed a 5% penalty on the sale price of the property if the landlord didn’t cooperate, and they wanted the excise tax on the sale to a third party to be 5.12% instead of the rate for sales of other types of property, which is 1.8%. This year, HB 1129 and SB 5198 seek to impose a $10,000 fine for not cooperating.
This year, legislation also would require a three-year closure notice period for a change in land use for a manufactured housing community. There is now a 12-month closure notice requirement. The punitive nature in these bills is really exhibited here as they give options to have a 24-month closure notice period or a shorter 12-month period if the landowner pays differing mountains of cash to the tenant-homeowners in advance. The tally of these “pay for your right to your land” fees to homeowners can climb to nearly $4 million to close a community with 60 manufactured homes.
These twin bills being considered are unconstitutional as they would set aside private land for others’ private use, whether it is a no-sale waiting period or a long closure notice period. HB 1129 and SB 5198 should be defeated for their negative bias toward community landowners, and the unconstitutional taking of private property for private use.
The ghosts and demons of the invalidated right-of-first-refusal law need to be put to rest. If they are allowed to make a land-taking law for manufactured housing, there’s precedent for going after other residential or business property in the name of a vague “public benefit.”
Focus should be on increasing the availability of all forms of affordable housing, including manufactured housing communities. We can promote new development, preserve existing communities, and we can do it constitutionally and equitably with society sharing the burden along the way.
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