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Ms. Forbath replied that upon conversion, there are laws governing the homeowners association and voting rights with the David Sterling Act. She stated that the rules that apply include a five member board created from lot owners. If there are no lot owners on day one, there would have to be people appointed to the board. Initially, two residents representing the park and three people representing the park owner would be on the homeowners' board. She noted that once 51% of the lots are sold, the owners would then take over the majority control of the board. Ms. Forbath commented that the older houses are still of value after the conversion because the house has to be sold to get the lot. She explained that mobile home loans are very difficult to finance, but homes with lots are much easier to finance. She noted that the home would be worth more because people cannot buy the land without buying the house. A resident noted that if you are renting, not if you own it and they have to buy the home and the lot, if you are renting then all you own is a rust bucket, at this point you can still sell the rust bucket for whatever, but at that time, you will not be able to sell the rust bucket. Ms. Forbath explained that if you are still renting after the conversion and you decide to sell, the buyer would have to buy the house from you and the lot from the owner, so the buyer has to buy your house to get the lot and you set the price. A resident stated, with all do respect, now a buyer may pay $50,000 for the house and move in today, after the conversion takes place the buyer has to buy the lot for $100,000 plus the $50,000 for the house. Ms. Forbath explained that today they would not pay $50,000 for a tin can because no one would finance them. The resident stated that today I can come in with $50,000 cash and buy the mobile home, but after the conversion I would not be able to afford the additional $100,000 for the land. Ms. Forbath explained that the conversion opens up to more buyers. Donna Wilkinson, space 32, mentioned that this is an old park and there are things the owner has fixed, but there are problems with some of the sewage lines. She asked why he would paint the street if he plans on fixing the sewage lines. She stated that questions have been asked about this, but there have been no answers. She noted that she did not want these problems to exist after the conversion. She stated the cost to fix them after the conversion would come out of the homeowner dues. Ms. Forbath explained where the money would come from in the future upon conversion. The Department of Real Estate would require a final report be done at the time the owner submits the application for approval. She further explained that it is a requirement to have a full survey done of the park by a licensed inspector, who will then write a report. She stated a reserve study specialist would look at the report and determine the useful life left of the park and what replacement costs would be. She noted that the owner must put that money into the reserve account. She mentioned that the Department of Real Estate has preset dollar amounts of what replacement costs would be and that a budget preparer must follow those guidelines to determine the final amounts to go into the reserves. She noted that the owner would also have to put up a Minutes: PMCC -2 Page 8 January 9, 2009