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FACTS ABOUT SUBDIVIDING MOBILEHOME PARKS TO RESIDENT OWNERSHIP WHAT IS A "CONVERSION A conversion of a manufactured housing community to resident ownership can entail subdividing the community and selling it to the individual residents on a lot -by -lot basis thereby creating a resident owned park. This form of conversion differs from a cooperative owned park. When the community begins to subdivide, it becomes a condominium complex and is governed under the Davis Sterling Common Interest Development Act (Civil Code Section 1350 et. seq.) Homeowners who decide not to purchase will continue to have the full protections of the Mobilehome Residency Law (MRL)(Civil Code 798 et. seq.) and a state imposed "rent control" (Government Code Section 66427.5 (f)). The residents that decide to purchase their lots will have the full protection of the Davis Sterling Act and MRL protection under Civil Code Sections 799 et. seq., that are specific to subdivisions, cooperatives and condominiums and resident owned parks. LOWER INCOME RESIDENTS ARE PROTECTED It is very important to understand that current lower income residents in a manufactured housing community who choose to remain renters are protected financially when a park owner chooses to sell the individual lots to the residents. Lower income limits are defined in Section 50079.5 of the Health and Safety Code and are updated annually by the Department of Housing and Community Development. If a current resident qualifies as lower income then the resident will fall under a "state rent control" whereby the rent cannot be increased by more than the monthly percentage increase in the Consumer Price Index for the most recently reported period. For instance in 2008, a family of four living in Alameda County is considered lower income if household annually earns less than $66,250. Another point to note is that the lower income limits in this instance only apply to monthly income and not assets. Therefore a retired person who has large amount of savings from selling a previous home can still be eligible as lower income as long as their annual income falls below the guidelines. (Government Code Section 66427.5 (0(2)) CONVERSION PROCESS When an owner (subdivider) of a mobilehome park desires to sell the subdivided land to the residents, they must file with the local agency a tentative or parcel map for a subdivision to be created. The subdivider shall avoid the economic displacement of all nonpurchasing residents in the following manner: [sf sf /1687981 .DOC/012009/4640.001]