Mobile Home Park Mastery: Episode 283

The Limits On Grandfathering Protection

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Even though all cities hate mobile home parks, they tolerate them because of property laws governing legal non-conforming use – also known as “grandfathering”. But not all mobile home parks share that protection. In this Mobile Home Park Mastery podcast, we’re going to review the attributes that make a mobile home park at risk and without “grandfathering” rights.

Episode 283: The Limits On Grandfathering Protection Transcript

Legal non-conforming use has another word, it's called grandfathering. A grandfather in mobile home park is one in which you are allowed to continue that operation even though it no longer meets current zoning. However, not all mobile home parks have protection from grandfathering based on different circumstances. This is Frank Rolfe, the Mobile Home Park Mastery podcast. We're gonna talk about the limitations of grandfathering protections. Now, let's first start going over what grandfathering typically relates to when we talk about a mobile home park, because the word park in mobile home park is the key ingredient. A mobile home park is basically a parking lot for mobile homes, just like a parking lot for cars, so is the use that is grandfathered in most parts of real estate, the structure is what is grandfathered. Let's say you have a stick-built home sitting on a residential lot, no longer meets any of the zoning ordinances, but the home gets to remain because it was already there, and then one day a storm comes in and blows the home down. Can you put the home back? No. Why? You lost your grandfathering. Why? Because the structure was grandfathered, and the minute the structure came down, you can't put it back.

That's true for apartments, single-family, retail, office, but then came the mobile home park, because you see our use is grandfathered, because we're a parking lot. And you can't blow a parking lot down, tornado can't effect it, fire can't affect it, even flooding can affect it. So as a result, the mobile home park is typically there forever, the only way you can lose your grandfathering with that parking lot would be if you abandoned the use for over 180 days in most cities, which to define abandoned the use is even difficult, 'cause it means you have to have not any customers in that park at all and cease all marketing efforts. You could have a mobile home park with no trailers in it and still be protected to under grandfathering if you have a phone number out front, because even though there's nobody in it, you're still actively trying to put them in there. So even though you're having no luck, you haven't really abandoned the use. So mobile home parks are basically parking lots, then what grandfathering does is it protects your right, for those trailers to come in and out.

So that's really the power of the grandfathering related to mobile home parks is only with grandfathering are you allowed to bring in new customers, only then are you allowed to have those old and new customers sit parked in your parking lot. So it's very, very important property right, and many park owners think, "Okay. Well, if I buy the mobile home park, I guess I must already be protected by this." But the answer is no, that is not completely true. There are several variants of mobile home parks in which you would have no protections, the first one is, if your park is illegal. Now you would not think this could be possible, but I myself have personally walked on a over 100 space mobile home park north of Fort Worth, that was completely illegal. The person who built it never had a permit to build it, they'd received correspondence from the city many times saying, "Stop it, it's illegal. Shut it down." They've threw them in the trash, and they just kept going. I've also walked parks where portions of the park are legal, but then they just started illegally adding lots on. And I mean, a lot of lots, a permit for 50 lots and they build the thing out as a 100.

There's no grandfathering protection if your property is illegal. In fact, the three basic classifications from mobile home park are legal conforming, which means you could build it again today, it meets all current ordinances. Legal non-conforming, which is grandfathered and then illegal. And any park that falls into that third category, the illegal, has no right to be there, you can't take the position, "Well, it's already here, so therefore it's grandfathered," that is not true. No one will back you up, no real estate law will back you up, just because it was illegal and they haven't shut it down yet, does not mean they won't shut it down later. And on that parking in Fort Worth, which I was doing diligence on when I found it was illegal, the city official told me that what they were waiting to do is, the guy that owned it was a well-respected guy around town, kind of a member of the good old boy network, so they were waiting for the next buyer to buy it and then shut it down. But just 'cause it's there, and illegal does not mean you have any protections because you don't.

The next time that your supposedly grandfathered park isn't grandfathered is if you have a SUP, Special Use Permit or some other conditional permit that allows the use but has an expiration date. Now you'll say, "Who would be crazy enough to build a mobile home park based on those conditions?" Well, when you're out there building mobile home parks in 1950 or 1960, and someone said, "Well, you can put a mobile home park on your land Farmer Jones, but you have to stop it after 50 years." Back in those days, building parks was not very expensive, threw some gravel on the ground, put in some power, things were cheap. Farmer Jones thought, "Well, you know what? In 50 years, I'll have the mortgage on the farm paid off. So yeah, worry not, I'll do it for just 50 years." Then you fast forward to today and you went ahead and expire maybe 10 or 20 years ago. So in that case, the park would have been grandfathered during that run, but then when the time lapsed, then all of your rights expired. So whenever you're checking on a mobile home park, you wanna see if it was built under a special use permit, also known as an SUP or in some form or fashion something the time's out, because then you have a hybrid, you had grandfathering, but then you lost grandfathering, and there's no way you're gonna get it back.

When the city does those things, it's all papered very, very well, there's no way you can say, "Oh, well, you made a mistake, you didn't cross that T, you didn't dot that I and therefore that SUP is no longer valid." No, no, it doesn't work that way, I've never seen anyone be able to salvage a mobile home park deal in which that SUP had run out. Another thing that can come up with mobile home parks that was fairly rare is that some cities in America have what's called a Sunset Provision. Under the Sunset Provision, it means that all grandfathered uses go away after a certain period of time, if a certain period of factors come into play, it was designed really to allow cities to reorganize themselves when they have very, very poor zoning rules, and they're trying to get the city back on a better keel. For example, it happened down in Dallas where you had a whole bunch of topless bars centered on one street called Harry Hines.

The city of Dallas as it grew, as it developed, those topless bars ended up in the middle of a residential area. They didn't want those topless bars there, so they passed a rule that allowed them to get the topless bars out using Sunsetting, they said to the topless bars, "Okay, you have to get out of here within so many years." But to do that, it's a violation of property rights, so the city had to go ahead and vote in the ability to do that with the topless bars. So it is possible that that could occur now, if a city does that bear in mind it pertains to a lot of different businesses, and we're tied up in litigation for a really long time, so it's very rare that a city would do that, but when you're doing your diligence, it wouldn't hurt to ask about Sunset provisions to see if there are any related to that mobile home park or just that the city has any in general, most cities do not have or allow Sunset provisions, but that would be another way in which you could lose your grandfathering.

Now, this fourth way, this is the most dangerous one, and this is when it's a violation of health and safety. Because grandfathering, those property rights do not extend in the cases of things that are deemed to be dangerous to people, the perfect example is all those clubs up in the North East, when there was that one pyrotechnic show at a rock show, and the club burned down and killed a lot of people, I can't remember even the era that it occurred, I think in the '80s. I think it killed 50 people or more, and what the city then said was, "Okay, you know what? These old clubs are too dangerous. They don't have sprinklers, they don't have sufficient exits, even though they're grandfathered we're shutting them down because of health and safety." Now, health and safety is obviously something that we all care dearly about, but the good news is for mobile home parks, there's not a lot of health and safety concerns if you do a good job of running your property.

So how can you lose your grandfather to Health and Safety, you might ask. Well, it would really revolve around simply private sewer or private water systems that are not working. So if you have a water system that does not provide safe drinkable water, the city could say, "Well, it's too dangerous having this park here even though it is grandfathered, we're gonna go ahead and have to shut it down because the water doesn't work." So it's very, very important as a park and to maintain your grandfather and to keep you safe from health and safety, you gotta make sure that everything is functioning safely. Now, another item would be density of a mobile home park, if the city views the density to be so high that if a fire broke out, it could potentially burn down a whole lot of different units, then the city once again might say, "Well, even though this park is grandfathered, we have to make adjustments to it for Health and Safety." They would typically not shut the park down, but they might make you pull out certain units that are deemed to be too near to the others, but that's the one road block you have to face with any mobile home park is that you do not ever with grandfathered have power over health and safety. And that's why if you have particularly private utilities, it's absolutely essential, you keep everything very, very well maintained.

Now, one big problem cities have today with mobile home parks, even if they were to press the issue of grandfathering is, nobody wants to be on television, no one wants to be in the newspaper as the one shutting down the mobile home park and displacing all of these families. So it's a narrative that you rarely, rarely see. If you look at most of the articles you'll find online on mobile home park closures, it's always because of redevelopment, where the park owner has elected to sell the land to build a Home Depot or Lowes or some other use. You rarely, rarely, ever see anything regarding Health and Safety, but those articles do pop up and you'll notice when they do pop up, it's always related to the same thing, someone who has a failing well or a failing private sewer system. So just be mindful of the fact that even though you're grandfathered don't get too high and mighty. You still have to answer to one other item, and that is health and safety.

The big part is, if you want to have a nice, happy, healthy grandfathered mobile home park with your property rights assured, you've gotta do good due diligence, you've gotta go to the city, get a certificate of zoning where they show how many lots you're allowed to have, and you need them to state that your park is either legal conforming, which means you could build it again today, or legal non-conforming which means grandfathered, once you have that right, all you have to do, is stay in compliance of all those state local standards and that should shield you from health and safety issues and that should mean you'd be able to run that park fairly much till the end of time. This is Frank Rolfe, the Mobile Home Park Mastery podcast. Hope you enjoyed this. Talk to you again soon.