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| Foggy day in Big Sur |
Rumors are flying ... and like the fog in this image from Big Sur, rumors make it hard for us to see the truth.
This page is where we'll try to pop the bubbles that aren't true. If you hear a rumor that you would like for me to explore, send an email to jwycoff@me.com. So far, here are the false bubbles.
FALSE: Everyone will lose $100,000 or more
In the November, 2013, HOA newsletter, they state, "If this subdivision goes through everyone will likely lose an average of $100,000 or more of the investment in their home."
Wow! Considering that only 1 sale in the park as of 9/14/2013 and only 3 in all of 2012 were over $100,000, how could it be that everyone will lose $100,000 … or more? This data is available through public records … doesn't the HOA ever check their facts?
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FALSE: there is a park selling spree based on fear
On their interview with KCOY, Channel 12, on November 5, 2013, Jeff and Cathy McAllister are quoted as stating that the planned conversion is fueling a selling spree by neighbors in the park fearing inflated lot prices will devalue their mobile homes.
When I began this blog in July, I intended to track sales in the park. At the time there were 14 units for sale. Today there are 5 according to Joanne Mancarella. I've talked to some of the new owners who bought knowing about conversion. They look at it as an opportunity. The rapid rate that homes are selling now that conversion is an option refutes the statement made by the McAllisters.
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FALSE (Maybe): Lot prices will be $250,000 and a mobile home will not sell for $400,000.
On their interview with KCOY, Channel 12, on November 5, 2013, Jeff and Cathy McAllister use their home as an example stating the lot price could be $250,000 and with their $150,000 home, the total would be $400,000 and would not sell at that price.
First, no one knows what the lot prices will be and no one I've talked with thinks $250,000 is reasonable. Michael Fitzgibbons explained to us that Murphy Bank will do their own appraisals and if the prices aren't comparable to local real estate values, they won't lend us the money to buy our lots and the owner would be forced by the market to lower their prices.
Jeff also seems to forget about the owner's purchase incentives of 10% and space rent accumulation. Even if the lot price was $250,000 to start with, it would be $220,000 after incentives for a total value his home and lot of $370,000.
However, for just a moment, let's assume Jeff is right about his home being worth $400,000. Would it sell? It's pure conjecture, however, things are selling in Sunrise Terrace in the $350K range and they don't have that gorgeous view of the ocean. The McAllisters might actually get $400K for their home … and, if not today, in the near future considering appreciation, it would become much more likely that they would.
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False: Market Space Rent Will Be Determined by Apartments, Condos, etc.
This myth came to my attention at the HOA Board meeting on October 8, 2013. A resident reported having a conversation with Karin Staddon two years ago where she stated that apartments, condos and etc. would be the basis for determining market space rent.
This is WRONG. I assume that either the question was misunderstood or the answer was. The purpose of appraisals is NOT to determine what something is worth … it is to determine what the MARKET thinks something is worth.
The golden standard for appraisals is "comparables" and appraisers look for apples to compare with apples. They will be looking at lot rents in area parks … and, since the rents in the 118 units in THIS PARK average about $800, the expectation is that the market rent rate will be in that range also.
I called three area appraisers about this and received this note back from Julie Adams:
Hello Joyce,
The “market rental rate” should always be derived from like properties.
It is not appropriate, in any instance, to compare rental rates for mobile home park spaces to rental rates of dwellings within either a condominium or apartment complex.
‘Condominium’ is a description of a type of ownership and not a dwelling style description, as many people think it is, i.e., it includes equal percentages of ownership in the common elements that are legally owned by the park development (clubhouse, recreation areas, streets, greenbelts, etc). It also includes ‘airspace’ from the ground up. Having said that, the property types still must be taken into consideration. Appropriate appraisal practice would dictate that manufactured site usage can only be compared to manufactured site usage.
The market rate, if done correctly, will be obtained from other mobile home parks with similar ownership interests as condominium.
It sounds like the residents are researching this condominium proposal thoroughly. I hope all works well for the residents of your community. I know there has been much controversy over these conversions in recent years.
Best Regards,
Julie Adams, CREA
Certified Residential #AR007562
Since 1983 – FHA Approved
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False: Meetings Are Video-taped and Audio Recorded
A resident brought this to my attention and called it creepy.
I agreed that it sounded creepy, so I asked Joanne. She reminded me that security cameras are everywhere in our world today. There are security cameras in both clubhouses and pool areas.
Security cameras sweep a room and take intermittent shots. They do not record sound. Joanne also told me that when some HOA Board stuff was stolen, they reviewed the tapes for information.
When I relayed this information to the resident, I was told that they are indeed being audio recorded and she had been told this by several people.
This misinformation may have come from me. I like to make sure I get my facts straight so I often record meetings and interviews for my own use. My recorder makes really poor quality recordings that I refer back to if I don't remember details. After I've written whatever I'm going to write, I erase the recording. All recordings have been erased , including the latest board meeting.
After the HOA Board meeting on October 8, 2013, I was talking with Jeff McAllister and he said, "You're not recording this, are you?" I said, "No. I do have a recorder, but it's off."
Big Brother is not watching … at least not in our meetings.
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False: Leases Cannot Be Taken from Joanne's Office for Review
This was the subject of a lot of discussion and anxiety at the HOA Board meeting on October 8, 2013. Many people said they were forced to review their leases in Joanne's office.
When I asked Joanne about this, she said:
"Of course, they can take their leases home. We actually deliver them to resident's homes and they bring them back when they're ready to sign. One resident has had her lease for three weeks."
Legally, you have 30 days to review your lease.
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False: Joyce Wycoff is being paid by the owners.
Some people are saying they have "proof" that I'm being paid. If they will show me their proof, I'll happily pay them 10 times what I've been paid by the owners … or lawyers … or anyone else for doing the blog and the work I'm doing to understand the conversion in detail.
What has NOT happened: I am not being paid for this work. I am not getting a special deal on my lot. I have never talked to the owners and have never asked for nor received any compensation for my work on understanding the conversion.
What HAS happened: The owners and lawyers saw that I was trying to present the conversion in a "fair and balanced" way so Joanne asked me if I would put out a postcard so that everyone would know about the blog. I agreed to make a card and paid for it myself. The office paid the postage and mailed the cards. Nothing went into my pocket ... only out.
When I decided to do a series of Town Hall Forums, I asked Joanne if I could use the tubes and provided her with a copy of the invitation. She approved it and I scheduled it for Friday, October 4th since no one else was scheduled for that day. Several of us residents distributed the blue flyer on that day … including Lara Castaneda who delivered some after finishing her work that day. SHE WAS NOT PAID TO DELIVER THE FLYERS … she was on her own time.
WHY AM I DOING THIS?
I also purchased the chocolate for the Town Hall Forum, a fair amount of supplies, and a portable PA system. You might ask why … some times I do, too … especially after the last HOA Board meeting.
It's not like I'm rich. Like many other residents, I live on a fixed income. But, this is important and it feels like a way that I can serve my community while also learning more about something that I knew nothing about until a few months ago.
I love learning and this has been the most challenging "workshop" I've ever experienced.
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This myth was thrown out at the HOA Board meeting on October 8, 2013. One resident insisted that it was not open and that she had tried to get on it. In the beginning some people had difficulty with the computer process; I realized this and quickly changed it to make it completely open.
I have intended this blog as an open forum from the very beginning and notified the HOA Board when I put the blog online. They were invited to make comments or post information. They have refused this offer repeatedly although Sharon McMahon did email me a history of the park which I appreciated and posted linking her comments with comments from Joanne Mancarella … see page Park History: HOA & Management. She also emailed me a comment about a post which I posted for her … see post: Why THIS Attorney? An Opinion and a Call for Moving On
In the beginning, there was a requirement to “log on” to make a comment because I do not like anonymous comments. A few people reported having problems getting on so I removed the requirement for logging on. Anyone can now make a comment. I still think the only honest thing to do is to identify yourself if you make a comment. And, I reserve the right to remove comments that are profane or disrespectful.
My feelings about the need for an open forum were stated in the very first page I wrote for this blog … copied below, see the full statement at: About.
Please note statement in red:
Park conversion is a complicated process that affects each of us on a very personal level ... our homes. There is a lot of fear and uncertainty in the process ... we fear making a wrong decision ... we fear that someone will take advantage of us ... we fear that we will lose our homes or the value that has accrued in them. Fear is natural and only shared information and time will make us feel more confident about this process and the decision that is right for each of us.
I live in Mesa Dunes and love the park and my home. Like most of you, I want to know the answers to two main questions:
- What are the facts?
- What are my options?
I am going to try my best to present all the issues as fairly and accurately as possible. If you find an error, please point it out in a comment. If you have a different opinion, please share it in a comment, or if it's too long for a comment, please send me an email to jwycoff@me.com. I expect all comments and opinions to be respectful and courteous and reserve the right to remove any that are not.
May this conversion process bring each of us greater financial security and more closely knit as a community. For more about the philosophy of this blog, see the first blog post Options, Opinions & Opportunities.
Joyce Wycoff, #210
Author Affiliation: This blog does not represent legal opinion, park management, park ownership, the Homeowners' Association or any other person or entity other than the author. However, information, ideas, or opinions from all of the above are welcome.
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