MN Legislature passes APAC-backed changes
to the Right of First Refusal and
Relocation Trust Fund

Right of First Refusal

On May 24, 2019, the Minnesota Legislature passed proposals backed by All Parks Alliance for Change (APAC), and endorsed by the Homes for All MN coalition, to close loopholes in the state Right of First Refusal law. Flaws in the existing law doomed a 2017 attempt by residents of the Lowry Grove manufactured (mobile) home park to buy their community and prevent it from being closed by a developer. A newly strengthened and streamlined process passed today as part of the Omnibus Agriculture Department, Rural Development, and Housing Finance Bill.

“Park communities are a critical source of affordable housing. They offer very low housing costs and the opportunity for low-income home ownership,” said Dave Anderson, APAC’s Executive Director. “However, when residents own their homes but only rent the land, they face the risk of losing their home and community if the land is sold for redevelopment.”

Minnesota law provides residents with a right to purchase their park communities under certain specific circumstances. If a park is being sold for redevelopment, residents or a nonprofit authorized by the residents are given 45 days to meet the same cash price and terms and conditions as the developer. However, in recent years, two high profile attempts by residents to purchase their communities – Lowry Grove in St. Anthony and Tri-County Mobile Home Park in Waite Park – revealed serious flaws in the law and barriers to its use.

“In the case of Lowry Grove, the park owner was able to simply ignore a matching offer submitted by the residents and sell the park to a developer,” said Anderson. “The park owner broke the law by moving forward with a sale to the developer, but it was the residents that were punished. State law at the time said that, if such an illegal sale does occur, the residents ‘do not have any continuing right to purchase the park.’” The bill protects the residents’ right to purchase their park, allows them to halt an unlawful sale, and makes a variety of other changes that clarify and streamline the process.

(The changes are described in the attached summary of the original standalone bill (PDF) .)

Relocation Trust Fund

The Minnesota Legislature also passed proposals backed by APAC to strengthen the state’s Manufactured Home Relocation Trust Fund, which nearly exhausted its funds in 2017 as the result of two expensive park closures. When parks close, home owners receive reasonable compensation to either move their homes or, if it cannot be moved, replace their home through a buy-out. The program is funded an annual $15 fee paid by the residents and a one-time per home payment made by the park owner when they close their community (ranging from $3,250 to $6,000). The changes adopted as part of the Omnibus Housing Finance Bill increase the fund balance cap from $1 million to $2 million, allow Minnesota Housing to advance funds when needed, improve the collection system for the $15 fee, and increase oversight and reporting.

(The changes are described in the attached summary of the original standalone bill (PDF).)