The Most Efficient Upgrade Money Can’t Buy
When you look at your community’s streets and lots, what do you see? Have you REALLY looked…because the burgeoning MHC investment community sure has! Across America, investors are seeking out MHCs with depressed valuation for short/long term gain. Owners neglecting to focus on the least expensive (and easiest!) way to increase their MHC’s curb appeal do so at the cost of their property value, net operating income AND their Residents’ living environment.
Management 101: The safety and constancy of our income and real estate asset value is correlated with the pride homeowners take in their homes and leased space. If we are more familiar with Main Street than Wall Street, it’s time to get onto YOUR “street” before your banker, insurance inspector or a buyer (ie. Wall Street) pay you a visit. So, step out of your car and walk the entire community. Memorialize what you first see and use these summer months to take action!
First things first. Do the property’s common areas demonstrate the pride-of-ownership you want residents to emulate? A few examples: You shouldn’t expect weeding of resident’s lawns/garden beds, when you have weedy and unkempt areas that have not been addressed; are there unpainted/unstained wood surfaces on your clubhouse, entry and street signs?
One of the best tools you have in administering Residents’ adherence to your MHC Rules and Regulations is by planning periodic feet-on-the-ground review of conditions at each home and lot. It’s the inspection that most all management companies and institutional owners conduct.
We have a specific procedure with this undertaking. To be consistent with RCW 59.20.130 (7), in order to “enter onto a Resident’s lot in ensure compliance with applicable governmental codes/statutes /ordinances/administrative rules and your MHC’s R&Rs (aka GFL) but not to interfere with the Resident’s quiet enjoyment,” it is important that a written notification with a date and time range for entry is sent to each homeowner. The correspondence can be a pre-inspection letter, or perhaps an article in your monthly newsletter, examples of which is available from RHAWA upon request. The letter should not contain any direction as to what is deficient at their home or lot BEFORE the inspection. Tell homeowners that they will be provided a written form with corrective actions necessary to be in compliance with the R&Rs. RHAWA will forward the Home and Lot Inspection Form to you upon request. This pre-inspection letter should also state that residents will have a specific period of time to follow the directive on the form, after which a re-inspection will occur to confirm compliance. In filling out the form, do not just check the applicable boxes; point out the exact deficiency (i.e., “replace damaged skirting on south side of your home.”)
If it has been a while or you have never done an inspection of each home/lot, you will want to link this clean-up event with having your garbage vendor deliver a LOCKABLE dumpster to a common area. In your letter, there should be a provision for the date/times that the dumpster is available with SPECIFICS about prohibited items from being placed into it (e.g., No items larger than 4’ long, tires, paints, appliances, household trash etc.) Your letter should point out that the management is providing for the disposal of resident’s items, free of cost but after the dumpster is gone, they will be responsible for removal of their items. If your community has security cameras, you will want to place the dumpster under the watchful camera’s eye.
When conducting the home and lot review, you might politely request to any residents that this is a task best done solo. You will have many other homesites to do, and the time required to talk about what you see is better spent communicated in writing. We have found that people follow through when communications are in writing, that way no one can say they forgot or misunderstood the corrective instruction.
If the demographic of your community is elderly, you may consider soliciting local volunteer groups to assist homeowners on a case-by-case basis. When this is done, it is wildly successful and coordinating with local nonprofits can often be greatly appreciated by the homeowners and their out-of-town families. You can always reach out to RHA for more information about local organizations that will assist you in your community. The reputation garnered by assisting your Residents as word gets out in the community-at-large is the finest advertisement money can’t buy!
Undoubtedly, you will have many conscientious Residents whose homes and lots are in exemplary condition. Consider providing a written “Thank You” note, as should go to them…the time-cost in reinforcing this pride of ownership is well worth the good will.
A large part of the contractual “deal” homeowners and landlords make is to abide by the R&Rs, aka GFL which are typically an exhibit to the Lease or Rental Agreement. Strict compliance by all assures a desirable living environment which typically translates to lower expenses and higher leasehold rates for the landlord, and higher home values for Residents.
In summary, the annual re-examination of each home and lot for R&R compliance is a great way to create value for homeowners and housing providers…a win-win. Although this management tool is most frequently done in the Spring, in the “dry of July” you STILL time for tuning up the curb appeal of everyone’s home and space…perhaps even your own!
NEXT ISSUE: Rules and Regulations – The Real Deal
Joel Erlitz has owned and operated MHCs in the four Northwestern States over the last 40+ years. He was appointed twice by Governors to represent MHCs of Washington on State funded task forces. He has been active in State politics as they related to MHCs and has provided expert testimony on issues relating to management, ownership, appraisal, and lending practices for land-lease communities. If you have any questions about this article, please contact Mr. Erlitz Jserlitz@comcast.net.