Resident-purchase proposals can sound simple. Communities deserve the full story before decisions are made.
Resident Checklist
Use these questions to slow the process down, get the documents on the table and understand the long-term obligations behind any resident-purchase proposal.
Do not commit on a slogan or a brochure
A fair process gives residents time, numbers, documents and plain-English answers. If a proposal cannot answer basic questions, residents should not be rushed.
Print the document at the bottom of this page and be sure to bring it to the meeting. Ask for clarity. Speak up!
NOTE: Each item below is designed to be copied into an email, used in a public meeting or shared with others.
Deal basics
- What is the total purchase price?
- Who negotiated the price?
- Has an independent appraisal been completed?
- What is the proposed closing date?
- Can residents review the purchase agreement before any vote?
Monthly costs
- What will each resident pay after closing?
- Will there be new fees, dues or assessments?
- How are rent, dues and assessments different?
- What happens if expenses exceed projections?
- Are low-income or fixed-income residents protected from sudden increases?
Debt, reserves and risk
- How much debt will be used?
- What is the interest rate and repayment schedule?
- Is there a balloon payment attached to the loan?
- What reserves exist at closing?
- How much is budgeted for roads, utilities, drainage, trees and common areas?
- Who pays if the community needs emergency repairs?
Management and maintenance
- Who will manage daily operations?
- What experience do they have managing manufactured home communities?
- Who handles collections, rules enforcement, vendors and emergency maintenance?
- What maintenance has been deferred?
- What service standards will residents receive?
Governance and control
- Who sits on the board?
- How are board members selected and removed?
- Do outside organizations retain approval rights?
- Who controls the budget?
- What voting rights does each household have?
- What decisions require resident approval?
Exit, resale and long-term value
- Can residents sell their homes freely?
- Are there transfer fees or resale restrictions?
- What happens if a resident disagrees with the purchase?
- What is the outcome for residents who elect not to participate or are not financially able to participate in a resident purchase of their community?
- Can residents opt out?
- What happens if the community cannot meet its obligations?
Red flags
Slow down if any of these signs appear in the process. They do not automatically mean the proposal is bad, but they do mean residents need better answers before moving forward.
- Residents are urge to support the deal before seeing any of the corresponding documents directly.
- Residents are prohibited from seeking independent legal and/or financial review of the agreement.
- The vote process, rules and thresholds are unclear.
- Monthly cost projections are vague or incomplete.
- The proposal minimizes debt, reserves or maintenance risk.
- The proposal calls for community ownership to be donated if resident ownership fails.
- Outside sponsors control the process more than residents do.
- Questions are framed as opposition instead of due diligence.
- There is no clear plan for roads, utilities, insurance and long-term capital needs.
Questions for local officials
Public officials should not treat resident purchase proposals as automatically risk-free. The same basic diligence should apply: financing, long-term sustainability, infrastructure, governance and impact on housing supply. These deals often rely on taxpayer money to subsidize a deal that otherwise wouldn’t pencil on its own.
Ask in public
- Has the full financing package been disclosed?
- What taxpayer money is going to support this deal and where, exactly, is it going?
- If taxpayers funds are being used, who are the beneficiaries of fees and other payments. Taxpayers deserve to know.
- Who bears the downside risk?
- Could this reduce future housing supply?
- Are residents being given a real choice?
- What safeguards exist against future assessments or service declines?