Welcome to the Mobile Home Park Mastery Podcast where you will learn how to identify, evaluate, negotiate, perform due diligence on, finance, turn-around and operate mobile home parks! Your host is Frank Rolfe, the 5th largest mobile home park owner in the United State with his partner Dave Reynolds. Together, they also own and operate Mobile Home University, the leading educational website for both new and experienced mobile home park investors!
I live in Missouri. And in Missouri we have a plethora of laws intended to protect us. One of those is the stand your ground law. If I'm in my home and someone comes to my door and starts trying to break my door down, I have the right to defend myself. And pretty much whatever I do in that defense, I will be exonerated in a court of law because I have the right to stand my ground. And in the Mobile Home park arena, the stand your ground law is also known as legal nonconformance or grandfathering, the supreme right in real estate that allows you to avoid any issues with city hall on laws that have been changed since your park was built.
This is Frank Rolfe, the Mobile Home Park Mastery Podcast. We're gonna explore the strong set of laws known as legal non-conformance or grandfathering, and what that does for you. Why it's often misinterpreted, and what you need to do to stand your ground when it is called into question?
Now, let's first reflect on what is grandfathering. You have three styles of mobile home parks out there. You have legal conforming, and that means you could build a park again today just as it appears, you have legal nonconforming, which means it was built legally, whatever time it was built, typically back in the 1950s through '70s. But you could not build it again today. But besides it was built legally, you're protected from any law passed after the date of construction of that mobile home park.
And then finally, you have illegal. That means the mobile home park has no right to exist. Now, there's not a darn thing you can do if you have an illegal mobile home park because by law you have no rights. So if the city comes to you and says, hey, we know you got this 200 space mobile home park in the middle of town, but you have no right to be here, so we're shutting you down. And there's not a darn thing you can do about it. You could try and litigate it buy some time, but it probably will not have a very good ending. So that one, there's no hope for.
And then you have legal conforming and you never have a problem with that because why would anyone ever question your right to exist because you could build it again tomorrow. But legal non-conforming, also known as grandfathering, that is the style of existence of most mobile home parks in America. And it's also something that's horribly misinterpreted by many, many city bureaucrats. Now what's the problem?
Well, the biggest problem I would say in understanding grandfathering for most city officials is how grandfathering ends. Because they understand grandfathering. When you say the word grandfathering, they know you're talking about legal nonconformance and they know it protects you from any issues. But here's the issue. Let's imagine you have a regular house on a lot and it was build in 1950 and over the roughly next century, they changed the laws. And you can no longer put a house back on that lot. It's just not allowed, doesn't fit the right setback. Maybe the zoning has changed.
Well, you're fine with that house until one day the house burns down. And when the house burns down, you can't put it back on that lot because your grandfathering has ended by the fact that the structure on that lot is no longer there. Now, the problem is with a mobile home park, we're different because we don't end like that. It's our use that's grandfathered, 'cause we're basically a parking lot. So if you own a parking lot, the cars can freely come and go as much as they please. And you can transition from a vacant parking space to a full vacant parking space back to a vacant back to a full, it could happen three times a day and it doesn't matter. It doesn't in any way impact your legal nonconformance.
But a lot of city officials don't understand this. They think when the lot is suddenly empty that you lost your rights just like that house on that lot that burned down. But that's not the case at all. For mobile home park, that grandfathered right does not end until either there's no mobile home parks on the property. But even in addition to that, you could have no mobile homes in the property and still hold your grandfathering because you're still running ads, still answering the phone, but no one's taking you up on your product. So you're a bad business person, you made a bad investment, but it doesn't mean you're grandfathering ends.
So it's really the insightful definition of how grandfathering ends that trips up most people. Now, what happens when the city misinterprets this? What do you do when the city says, "No, I'm sorry. You can't use those vacant lots. You've lost your grandfathering." Well, you're gonna have to enlist some kind of legal aid typically because you as an individual talking to the city bureaucrat, they don't care what you say. You don't mean anything to them at all. They'll say, well, anyone would tell us that because they just want what they want. I can't listen to them.
So often you will have to bring in a lawyer, preferably a municipal lawyer, someone who sues cities to get what you want, which is them to back down and say, "oh, okay, yeah, I guess you can use those lots". But the good news is you have this very strong stand your ground defense behind you, which is basic real estate property law. And that is a national issue. This is varied state by state, but it's under the overarching umbrella of American property rights. So most of the time, if not all of the time, when you push back against the bureaucrat who's interpreting it wrong, you're gonna win.
There's been multiple Supreme Court decisions, state Supreme Court, not federal Supreme Court, where the court has said, "look, you can't make this park owner do blank because they have legal nonconformance. They're grandfathered. You have no rights, Mr. City to do anything." And I'm not sure of a case, I've not heard of a case in which the city prevailed in the end. Some cases the city wins at the lower level, it gets appealed and they lose at the higher level. But I've not seen any in which the state Supreme Court has said, "oh, I'm sorry. We don't observe grandfathering in this state, so you got to do something different."
Now, there are some situations that park owners who have contacted me with where they're the ones who have lost side of what they're supposed to be doing. For example, someone will call up and say, "Hey, the city will not let me use this lot." And I'll say, "Well, why not?" Well, they can't use that lot, they say, because it doesn't meet the visibility triangle of the intersection. Well, that's probably true. It doesn't. Because see, there's a whole set of laws that has precedents over grandfathering, which are health and safety.
Now, that's done by necessity in society because we believe that human life is superior to basic property law. You probably remember back, well, 20, 30 years ago, there was a huge nightclub fire somewhere in the northeast, and a lot of people were killed in the fire. I think there was like 30 people killed. What had happened is they had a rock band with a pyrotechnic display that went bad. They had had sparks shooting up in the air and the ceilings were too low, they ignited the ceiling on fire and no one could get out because there was insufficient exits for a crowd of that size. Coupled with the fact that the building was old, it didn't have any kind of sprinkler system.
So after that occurred, the city went around to all those similar clubs and shut them down. They said, "oh, you can't operate anymore." And the club said, "wait a minute. I've been operating in this building just like this since 1925." And they said, "well, I'm sorry, but we have now determined this is not safe anymore." So under health and safety rules, they were able to shut those nightclubs down. Now, mobile home parks are no different. We also have to abide by health and safety.
But the good news is in most cases, the only health and safety requirement you'll find in many mobile home parks is simply regarding spacing and the fire marshal. So if you have a park that's very high density where the home's almost abut each other, where you could jump from one roof to the next, then you may have a problem with health and safety, and that is going to be something that has a higher level than your grandfathering does. And if the city takes that position and they're correct about it, well then you may lose lots because those lots are in fact too dangerous to have.
But remember, even in health and safety, cities must do it all uniformly. They can't make you comply to one set of rules and not that park down the street. They can't make you do something that the single family home in the subdivision does not. So normally they don't push it too far. I've never seen a case where they pushed health and safety to such a limit that it impacted your right to operate. But again, we're in strange times today.
Now, there is one defense which they didn't use or have years ago, but as America has grown and blossomed in all kinds of weird directions, a new popular attack you can take on a city if in fact you believe that they're being unfair regarding your grandfathered rights, and that is to file a discrimination complaint with HUD. Now, why would that work?
Well, because technically most of the time when cities don't want you to refill vacant lots, what they're really saying is, we don't want your kind of customer in our town. And you're not allowed to do that under fair housing. You can't discriminate against people. And often just the terror or the fear of you going to HUD and filing such a complaint may make even the most obstinate city suddenly want to comply. Because they don't want to have the hassle of HUD come into their office and doing some form of investigation.
Now, there was a park owner that did this, and they won, and I'm sure the city is miserably unhappy about it. Because part of their punishment was not only a financial penalty, but additionally, HUD is now auditing that city, I believe, for three years to make sure they did not do any more discriminatory behavior. You can imagine the grief of a city bureaucrat who has to fill out all these forms and be under the scrutiny of something larger. I mean, bureaucrats typically hate scrutiny, and they sure don't want it from the federal government.
The bottom line to it all is that grandfathered rights are very, very strong. They're true in all states in America. You need to learn about them, that's for sure. But it's just a good thing as a property owner that your rights are out there and are so much in your favor. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.