HF5075

Purpose

This bill aims to help manufactured home owners who must relocate because their park is closed, converted to another use, or they face economic displacement due to rising lot rents. It creates eligibility for financial assistance from the Minnesota manufactured home relocation trust fund, expands how park owners contribute to that fund, and sets up more details about how relocation payments are determined and paid.

Main provisions

• Economic displacement defined: A manufactured home owner relocates due to a lot rent increase that is
  • more than 10% in one year, or
  • more than 20% over three years, or
  • more than 30% of the owner's annual income (the definition also includes increases in utilities and service charges within those time frames).
• Funding mechanism for relocation: A park owner may be charged a $15 annual contribution to the relocation fund. This can be collected as a lump sum or added to monthly lot rent as a fee of up to $1.25 per month. The fee must be itemized and clearly labeled “Minnesota manufactured home relocation trust fund.”
• Payments when a park changes use: If a park is converted or otherwise closed, the park owner must pay to the Minnesota Housing Finance Agency (MHFA) the lesser of the actual relocation costs or an amount approved by a neutral third party, for each eligible home:
  • Maximums: up to $7,000 for a single-section home and $12,500 for a multi-section home, plus reasonable related costs (moving, setting up, utilities, permits, insurance, appurtenances, etc.).
  • Payment timing: within 60 days of invoicing from the neutral third party.
  • Exceptions: the park owner does not owe these payments in certain situations (e.g., relocating the owner’s resident to another space in the same park, owner not current on rent, eviction pending, or if the change is caused by eminent domain in some cases).
• Fund balance and park owner assessments: If the unencumbered fund balance falls below $2,000,000 as of June 30 each year, MHFA must assess park owners by mail for the total $15 per licensed lot, due by December 15. Notices must include information for residents, tax credits related to park sales, and a clear statement that the fee is not optional.
• Details and oversight for payments to claimants: The process for relocation payments requires a contract with a mover, supporting materials, and verification from park owners and county tax authorities. A neutral third party processes payments within 14 days of complete information, and if no decision is made within 45 days, payment is deemed approved. MHFA then issues two checks—half to the mover and half to the homeowner—when approved. The contractor must use funds only for relocation.
• In lieu of fund payments (alternative to MHFA payment): A homeowner may instead receive an amount from the fund after reasonable relocation efforts fail within a 25-mile radius, or may tender title to the park owner and receive an appraisal-based amount. The appraiser must be agreed upon by both parties; if no agreed value, the market value average from the prior five years can be used. Caps and minimums apply:
  • Maximum: $8,000 for a single-section home; $14,500 for a multi-section home.
  • Minimum or floor: $2,000 for single-section; $4,000 for multi-section; or a percentage of appraised value, whichever is greater.
  • Other conditions: Requirements about title, lien releases, current rent, and that the owner vacate within 60 days after payment (if not closing earlier).
  • If choosing this option, the park owner must transfer funds under the set terms and deduct costs for required demolition or debris removal up to $1,500, with other specified conditions.
• Other program mechanics: The bill preserves a formula for prioritizing payments if funds are limited, and imposes reporting and recordkeeping obligations for MHFA, including annual and, initially, mid-2010s-era reporting on fund status, closed parks, and claimants.

Notable changes to existing law

• Adds a new subdivision (economic displacement) to define what counts as displacement tied to park economics.
• Expands/adjusts the payment framework to the relocation fund, including the option for park owners to pay the fund via a per-lot assessment or lump sum, and sets a per-home relocation payment cap.
• Establishes mandatory ongoing contributions to the relocation fund by park owners when the fund balance is low, with corresponding notice and transparency requirements to residents.
• Reconfigures how relocation costs are paid to homeowners, including caps, eligible cost items, and the role of a neutral third party in approving payments.
• Requires detailed annual reporting by MHFA on the fund’s balance, inflows from park owners, payments to claimants, and other administrative data.
• Creates specific conditions and procedures for alternative payout options (tendering title and appraisal-based compensation) and the handling of limited funds.

Implementation and oversight

• The Minnesota Housing Finance Agency (MHFA) administers deposits to the relocation trust fund and maintains park-by-park records.
• A neutral third party reviews and approves relocation cost claims and oversees timely payment.
• The program includes enforcement provisions for timely payments and allows for attorney fees and costs in appropriate actions.
• The bill mandates public reporting to legislative committees and specifies disclosure requirements to park residents about fees, rights, and resources.

Relevant terms economic displacement lot rent utilities and service charges park owner Minnesota Housing Finance Agency (MHFA) Minnesota manufactured home relocation trust fund neutral third party closure statement change in use single-section manufactured home multisection manufactured home relocation costs moving/towing contractor appraisal tender title lien releases per-lot assessment annual fee ($15) and monthly fee cap ($1.25) cap amounts (7,000; 12,500; 8,000; 14,500) maximum/minimum relocation payment 50-mile relocation radius eminent domain fund balance threshold reporting requirements verification/documentation requirements THIS IS NOT AN OPTIONAL FEE (notice language)