FMO Conversion Services plans to consult with mobile home park residents who want to own their communities.
By SHANNON TAN
Published December 5, 2005
With more than 600 resident-owned parks, Florida has the highest number of manufactured housing co-ops in the country.
But only a handful of companies in the state cater to residents in mobile home parks seeking to buy their parks.
Now the Federation of Manufactured Home Owners of Florida in Largo has decided to get into the business by resurrecting its for-profit subsidiary, FMO Conversion Services Inc. The company plans to provide consulting services to mobile home park residents who wish to purchase their communities.
Consultants help the homeowners associations at mobile home parks with the details of conversion, including filing legal paperwork, determining the market value of the property and the amount of money needed for a resident purchase, finding lenders and acting as a go-between for the residents and the property owner.
Bill Watson, president of FMO Conversion Services, said the new subsidiary's fee will probably be less than half of such commissions, which he considers unfairly high.
"The competitors are making so much money off seniors on a fixed income," he said. "It's amazing people are taking so much money from people who can't afford it."
The move is an about-face from FMO's stance in 1999.
During its four years of operation, the subsidiary had converted just four parks. The FMO lost nearly $200,000 on its conversion service in 1998, according to a Times story at that time.
FMO Conversion Services helped Harbor Cove in unincorporated Sarasota County become a resident-owned community in 1997. John Dziuba, vice president of the homeowners association at the time, gives the company a "passing grade."
"I can't say a terrific job because we've got nothing to compare it to," Dziuba said. "It was something new at the time."
In 1999, the board of directors dissolved the subsidiary and transferred 50 pending contracts with mobile home parks to Marty Pozgay, then the president of FMO Conversion Services.
Pozgay then formed a company, now known as Florida Community Services Group. His girlfriend, Charity Cicardo, FMO's former executive director, became the company's vice president in 2000. Cicardo left FMO amid dwindling membership and complaints about her lobbying for state funding of a program that benefited Pozgay's tie-down business, the Times reported in 1999.
Since then, the housing market has heated up. Developers are increasingly interested in purchasing mobile home parks for redevelopment.
Pozgay's Florida Community Services Group is now one of the most prominent conversion firms in the state, working with such Pinellas mobile home parks as Island in the Sun, Stella del Mar and Ranchero Village.
Ranchero Village in Largo is poised to become one of the largest parks in Florida to be bought by its residents. When the closing takes place in January, Florida Community Services Group will be paid $600,000 - 1 percent of the $60-million selling price.
Watson thinks that sort of profit is high.
The FMO decided to revisit conversion services "after hearing stories from around the state of conversions that were occurring, and finding out how much residents were paying for these services and how much money was being made," said Watson.
Most homeowners associations don't shop around for consultants because they don't have time to compare fees. They typically have 45 days to determine if they can purchase their park.
Keith Dooley, past president of the Ranchero Village homeowners association, said he has never heard negative comments about Pozgay's company.
"It's a hefty fee," he said. "The only way you can justify that is if everything goes smoothly and you're happy with the outcome."
When Chesapeake Point in Tarpon Springs went up for sale, Neal McLaughlin, now president of the co-op, remembered seeing an ad for Florida Community Services Group in FMO's member magazine. A member of his golf league also recommended the group.
Residents bought the park for $4-million. Florida Community Services received $50,000, McLaughlin said.
"There was no way in the world we could have done it without (Pozgay)," he said.
The FMO board of directors will decide this month how much FMO Conversion Services will charge mobile home owners.
The company charged $495 per lot before it was dissolved in 1999, Pozgay said. Watson, an attorney, said the legal costs will be lower than other companies because services such as document preparation will be done in-house.
Unlike its competitors, FMO Conversion Services will aim for 90 percent of residents to buy shares in the park, which lowers the price of each share. Other conversion firms ask for 40 to 50 percent participation.
Don Hazelton, FMO president, says it was a mistake for the organization to stop offering conversion services years ago, but not everyone agrees.
Zephyrhills resident Bill Hannaford served on the FMO board of directors when they voted to turn the contracts over to Pozgay's group. He opposes the group offering the services again.
Potential conflicts could arise after FMO Conversion Services converts parks into resident-owned communities, he said. Would the FMO then continue to represent residents who bought shares in the park or only those who continue to rent?
"You trade in an absentee landlord for landlords that live in the park," said Paul Bradley, vice president of the New Hampshire Community Loan Fund, a nonprofit that has converted 72 parks into resident-owned communities. "They all want to potentially raise your rent if you're a nonmember."
Frank Williams, executive director of the Florida Manufactured Housing Association, which represents park owners, agrees disputes can arise between shareholders and renters.
But, he said, "given the alternative, they probably are better off for it."
Currently, shareholder owners can become associate members of the FMO, but cannot vote. The FMO hopes to change that by forming a sister organization for resident-owned communities, said Watson.
By offering conversion services, the FMO is "creating people who cannot be members," Watson said.
"If we are perfectly successful," he said, "we will put ourselves out of business."