(a)  In any instance in which a mobile home park owner has been sent a certified letter from an incorporated home owner households association indicating that the association has at least fifty-one percent (51%) of the home owner households residing within that park as members, and has articles of incorporation specifying all rights and powers, including the power to negotiate for, acquire, and operate the mobile home park on behalf of the member residents, then, before a mobile home park may be sold for any purpose and before it may be leased for any purpose that would result in a discontinuance, the owner shall notify the association by certified mail return receipt requested of any bona fide offer that the owner intends to accept, to buy the park or to lease it for a use that would result in a discontinuance. The park owner shall also give notice by certified mail return receipt requested to the incorporated homeowners’ association of any intention to sell or lease the park for a use which will result in a discontinuance within fourteen (14) days of any advertisement or other public notice by the owner or his or her agent that the park is for sale or the land upon which the park is located is for lease. Nothing in this section shall limit the association from acting as an agent of the residents in any other cause of action, objective or purpose in advancing a stated purpose in the articles of incorporation of the homeowners’ association.

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Terms Used In Rhode Island General Laws 31-44-3.1

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Amortization: Paying off a loan by regular installments.
  • Contract: A legal written agreement that becomes binding when signed.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Devise: To gift property by will.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Intestate: Dying without leaving a will.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Owner: means a licensee or permittee or any person who owns, operates, or maintains a mobile- and manufactured-home park. See Rhode Island General Laws 31-44-1
  • park: means a plot of ground upon which four (4) or more mobile and manufactured homes, occupied for residential purposes are located. See Rhode Island General Laws 31-44-1
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • town: may be construed to include city; the words "town council" include city council; the words "town clerk" include city clerk; the words "ward clerk" include clerk of election district; the words "town treasurer" include city treasurer; and the words "town sergeant" include city sergeant. See Rhode Island General Laws 43-3-9

(b)  The notice of pending bona fide sale from the owner must contain at a minimum the following if known and available and applicable to the sale:

(1)  An affidavit from the buyer or lessee stating the offered purchase price or offered lease payment;

(2)  The terms of seller financing, including the amount, the interest rate and its amortization rate;

(3)  The terms of assumable financing, if any, including the amount, the interest rate and its amortization rate;

(4)  The legal description and a statement of appraised or assessed value of property included in any land trade involved in the sale of the park;

(5)  Proposed improvements to the property to be made by the owner in connection with the sale, or other economic concessions by the owner in connection with the sale, if any;

(6)  A statement that the owner will allow reasonable access to the property by parties involved in the potential purchase including, but not limited to, the tenants’ association, consultants, and lenders;

(7)  A statement that the owner will make available to the residents copies of any easements either on or off the property to which the owner is a party and copies of all permits or licenses in force within seven (7) days of a signed purchase and sale agreement with the residents;

(8)  A statement that the owner will make available to the residents a survey and legal description of the park, plus an itemized list of monthly operating expenses, utility consumption rates, taxes, insurance and capital expenditures for each of the past three (3) years within seven (7) days of a signed purchase and sale agreement with the residents;

(9)  A statement that the owner will make available to the tenants’ association the most recent rent roll, a list of tenants, a list of vacant units and a statement of the vacancy rate at the park for the three (3) preceding calendar years within seven (7) days of a signed purchase and sale agreement with the residents;

(10)  A statement that the owner will make available to the tenants’ association any available data relating to the past and present existence of hazardous waste either on the property or in close proximity within seven (7) days of a signed purchase and sale agreement with the residents;

(11)  A statement that the owner will make available to the tenants’ association any available data relating to the water, sewer and electrical systems of the park within seven (7) days of a signed purchase and sale agreement with the residents;

(12)  A statement that the owner will make available to the tenants’ association all income and operating expenses relating to the property to be purchased for the three (3) preceding calendar years within seven (7) days of a signed purchase and sale agreement with the residents and any other information that may be required by the lender. Any additional information that is required by the lender shall be kept strictly confidential.

(c)  Any incorporated home owners’ association entitled to notice under this section shall have the right to purchase, in the case of a third party bona fide offer to purchase, or to lease in the case of a third party bona fide offer to lease, the park, provided it meets the same price and the same terms and conditions of any offer of which it is entitled to notice under this section by:

(1)  Executing a contract or purchase and sale or lease agreement with the owner within forty-five (45) days of notice of the offer; and

(2)  Obtaining any necessary financing or guarantees within an additional one hundred thirty-five (135) days.

(d)  No owner shall unreasonably refuse to enter into, or unreasonably delay the execution of a purchase and sale or lease agreement with a home owners’ association that has made a bona fide offer to meet the same price and the same terms and conditions of an offer for which notice is required to be given pursuant to this section.

(e)  The deposit monies must be credited to the purchase price of the mobile home park.

(f)  The incorporated home owners’ association will use diligent efforts to obtain a commitment for financing from a lender by making immediate application for financing upon signing of the purchase and sale agreement. In the event that the incorporated home owners’ association, with the exercise of reasonable efforts, is unable to obtain necessary financing or comply with other contingencies of the purchase and sale agreement, the incorporated home owners’ association shall immediately notify the park owner and the deposit shall be returned to the incorporated home owners’ association.

(g)  If the incorporated home owners’ association shall default in the performance of its obligations as a purchaser under the terms of the purchase and sale agreement, the park owner shall have, as sole and exclusive remedy for the default, the right to retain the deposit as liquidated damages in full settlement and discharge of all obligations of the incorporated home owners’ association without further recourse in law or equity.

(h)  Failure of the incorporated home owners’ association to execute a purchase and sale agreement or lease within the forty-five (45) day period or to obtain a binding commitment for financing within the one hundred thirty-five (135) day period shall serve to terminate the right of the association to purchase or lease the mobile park home.

(i)  Residents shall have a total of one hundred eighty (180) days from the receipt of notice of a bona fide sale to complete a transaction under the right of first refusal legislation. Any delays by the seller in supplying requested information as stated in this legislation or any delay resulting from litigation involving the sale and/or litigation affecting the marketability of the title of the mobile home park shall result in the same number of days over the due date being added to the one hundred eighty (180) days available to the residents for a right of first refusal purchase unless the litigation is frivolous and prompted for the sole purpose of delay by the home owners association.

(j)  The time periods provided in this section may be extended by agreement of the association and the owner.

(k)  Nothing in this section shall be construed to require an owner to provide financing to any association or to prohibit an owner from requiring an association which is offering to lease a park to have within its possession a sum equivalent to the capitalized value of the proposed rent of the park and requiring that a portion of that sum, of an amount necessary to pay the rent on the park for a period of no greater than two (2) years, be kept in escrow for that purpose during the term of the lease.

(l)  The right of first refusal created in this section shall inure to a home owners’ association for the time periods provided in this section, beginning on the date of notice to the home owners’ association. The effective period of the right of first refusal shall apply separately for each substantially different bona fide offer to purchase the park or to lease it for a purpose that would result in a discontinuance, and for each offer the same as an offer made more than three (3) months prior to the later offer. However, in the case of the same offer made by a prospective buyer who has previously made an offer for which notice to a home owners’ association was required by this section, the right of first refusal shall apply only if the subsequent offer is made more than six (6) months after the earlier offer. The right of first refusal shall not apply with respect to any offer received by the owner for which notice to a home owners’ association is not required pursuant to this section.

(m)  No right of first refusal shall apply to a government taking by eminent domain or negotiated purchase, a forced sale pursuant to a foreclosure, transfer by gift, devise, or operation of law, or a sale to a person who would be included within the table of descent and distribution if there were to be a death intestate of a park owner.

(n)  In any instance in which the incorporated home owners’ association of a mobile home park is not the successful purchaser or lessee of the mobile home park, the seller or lessor of the park shall prove compliance with this section by filing an affidavit of compliance in the official land evidence records of the city or town where the property is located within seven (7) days of the sale or lease of the park.

(o)  In any instance in which the incorporated homeowners’ association of a mobile home park is the successful purchaser or lessee of the mobile home park, the association shall have the right to distinguish in terms of lease conditions and rent and fees as between members of said association and non-members of said association. For purposes of this chapter, members of a homeowners’ association and non-members of a homeowners’ association shall not be deemed residents of a similar class.

History of Section.
P.L. 1987, ch. 136, § 1; P.L. 1992, ch. 384, § 1; P.L. 1993, ch. 309, § 1; P.L. 1994, ch. 198, § 1; P.L. 1998, ch. 57, § 1; P.L. 2001, ch. 86, § 95.