When it's going up, know what 'rent' means
By LEN BONIFIELD
Published September 16, 2006
This is the time of year when many homeowners in land-lease communities receive notice of rent increases for the coming year. Today's column is designed to help them understand those increases by defining some basic terms.
"Rent" has a slightly different meaning when used in connection with the rental of a manufactured home lot in a land-lease community than it typically has in connection with the rental of an apartment.
"Lot Rental Amount" is defined as "all financial obligations, except user fees, which are required as a condition of the tenancy." Lot rental amount includes base rent, pass-on charges, late fees, pet fees, etc. Section 723.0313 Florida Statutes states that the homeowner shall have no financial obligations to the community owners as a condition of occupancy, except the rental amount.
"Base Rent" means rent paid for use of the lot and related facilities. Base rent excludes special-use fees, governmental and utility charges, and pass-through or pass-on charges, which are often stated separately. Base rent generally excludes fees that may not apply to everyone equally, such as pet fees and late fees. Those are often identified as special use fees.
"Special use fees" are charged only under certain conditions. A returned-check fee, for example, is a special-use fee.
Other fees imposed by governments, such as taxes or special assessments and utility charges, are outside the control of the community owner and may be stated and collected separate from the "base rent" (as long as it is disclosed in the prospectus). These charges are, however, part of the total financial obligation of the resident to the park owner and are included in the "lot rental amount."
Section 723.012 sets forth the disclosures regarding increase in lot rental amount that must be included in a prospectus in more detail, including in pertinent part:
* Notification of the mobile home owner at least 90 days in advance of the increase.
* Disclosure of any factors that may affect the lot rental amount, including, but not limited to:
1. Water rates
2. Sewer rates
3. Waste disposal rates
4. Maintenance costs that include costs of deferred maintenance
5. Management costs
6. Property taxes
7. Major repairs, improvements
8. Any other fees, costs, entrance fees or charges to which the mobile home owner may be subjected
9. Disclosure of the manner in which the pass-through charges will be assessed.
Clearly, the lot rental amount includes a variety of items, some of which are specified in the statute while others may be specified in a prospectus.
In addition, Section 723.031(5)(c) provides that a community owner may pass on, at any time during the term of the lot rental agreement, utility charges or increases in utility charges, ad valorem property taxes or increases in these taxes, but only if certain conditions are met and proper disclosure is in the prospectus.
"User fees" are defined as "those amounts charged in addition to the lot rental amount for nonessential, optional services provided by or through the park owners to the mobile home owner under a separate written agreement between the mobile home owner and the person furnishing the optional services." Examples of user fees include golf greens fees, dock rentals and lawn service when not provided by the terms of the prospectus.
Information from FMHA News was used in this report.
Send comments or questions to Len Bonifield at firstname.lastname@example.org or write him at 2914 Dollar Bonnet Lane, Lakeland, FL 33810. Please include your e-mail and mailing address. Because of the volume of mail, he can't respond personally to every query. Bonifield is a manufactured-home resident and a past HOA president and former officer of the FMO District 1 board of directors.