ASSEMBLY HOUSING COMMITTEE
STATEMENT TO
ASSEMBLY, No. 4973
STATE OF NEW JERSEY
DATED: DECEMBER 9, 2024
The Assembly Housing Committee reports favorably Assembly Bill No. 4973.
This bill gives homeowners in a mobile or manufactured home park (resident homeowners) the opportunity to preserve their communities by providing the resident homeowners the opportunity to purchase their mobile or manufactured home park, or private residential leasehold communities (PRLC), if the landowner anticipates selling or changing the use of the land.
Mobile homes, manufactured housing, and factory-built housing are important, unsubsidized, and effective ways to meet New Jersey’s affordable housing needs. As many people living in a PRLC own their home but not the land upon which it sits, landowners can wield significant power over housing security. If a landowner pursues redevelopment of the PRLC, resident homeowners are at risk of losing their investment. The scarcity of vacancies in other PRLCs and the high costs of relocating a mobile or manufactured home make relocation nearly impossible. When a PRLC closes, resident homeowners can find themselves pushed into poverty. Accordingly, this bill requires the landowner of a PRLC to provide certain notices, and the right of first refusal, to resident homeowners of the PRLC if PRLC land (community land) is offered for sale, or if the PRLC landowner (landowner) has received a bona fide offer to purchase the community land that the landowner intends to consider, or make a counter-offer on.
Specifically, the bill requires the Department of Community Affairs (department) to publish, on the department’s Internet website, a list of nonprofit organizations committed to preserving affordable housing, who have notified the department that the nonprofit organization wants to receive notifications that: community land is offered for sale; or that a landowner has received a bona fide offer to purchase that the landowner intends to consider, or make a counter-offer on. The bill requires a landowner to give notice of the offer, as specified in the bill, to the department, the New Jersey Housing and Mortgage Finance Agency, the municipal clerk and the mayor or other chief executive officer of the municipality in which the community land is located, the persons and entities on the list published on the department’s Internet website, and to each resident homeowner in the PRLC. The notice is required to state the price, terms, and conditions of the offer and a contact person for further information.
Current law enables affected homeowners in a PRLC—by and through an association of unit owners, with two-thirds consent of the unit owners, provided the unit owners have met the price, terms, and conditions of the landowner—to exercise the right to purchase the community land, if the contract is executed within 45 days of receiving the initial notice from the landowner. This bill enables the affected resident homeowners, by and through a resident homeowner group, as defined in the bill, to exercise the right to purchase the community land if 51 percent of the resident homeowners in the PRLC consent to the purchase, and the resident homeowner group meets the price, terms, and conditions of the landowner by executing a contract with the landowner within 120 days of receiving the initial notice. The bill sets forth procedures and a timeline for negotiating, extending, and financing the purchase; permits a landowner to set a refundable earnest money requirement of up to $50,000; provides that a resident homeowner may consent to the purchase by signing a petition or any other document indicating consent; and requires that negotiations be conducted in good faith.
The bill permits resident homeowners to select and designate up to seven representatives, who may be assisted by legal and other professional and technical counsel to receive, evaluate, and negotiate the purchase or prospective purchase of the PRLC by the resident homeowner group or a cooperative, nonprofit corporation, or similar entity formed by the homeowners. The representatives would consist of, and be controlled by, the resident homeowners and be open to all resident homeowners in the community.
The bill authorizes a resident homeowner group that has rights pursuant to the bill, at the resident homeowner group’s election, to assign their rights to the municipality in which the resident homeowner group is located, a housing authority located in the municipality, an agency of the State, or a nonprofit corporation or cooperative, for the purpose of continuing the use of the property as a manufactured home community. Following assignment, the assignee would be entitled to exercise the rights that the bill grants to the assignor-resident homeowner group.
Further, the bill permits the resident homeowner group, or the Attorney General, to file an action in the Superior Court, Law Division, for a violation of P.L.1991, c.483 (C.46:8C-10 et seq.), and provides that a violation would constitute an unlawful practice pursuant to the New Jersey consumer fraud act, (CFA) P.L.1960, c.39 (C.56:8-1 et seq.), and subject a landowner to all penalties available pursuant to the CFA. Additionally, the bill exempts from "The Planned Real Estate Development Full Disclosure Act," (PREDFDA) P.L.1977, c.419 (C.45:22A-21 et seq.) the disposition of a PRLC to a resident homeowner group or its assignee, whether or not the form of ownership of the PRLC would otherwise fall within the definition of planned real estate development pursuant to PREDFDA.
The bill repeals sections 6 through 9 of P.L.1991, c.483 (C.46:8C-15 through C.46:8C-18), which concern the formation of an association created pursuant to P.L.1991, c.483 (C.46:8C-10 et seq.), notice and recording of a purchase, and the association’s purpose and governing documents. The bill omits all references to the creation of an "association of unit owners" to receive, negotiate, consider, and purchase a PRLC, and replaces that language with "resident homeowners" or "resident homeowner group."