Do You Know About MOU’s, Accords, and Model Leases in MH Communities?

MHET has not been a promoter or supporter of Memorandums of Understanding (MOU’s), Accords or Model Leases because of our strong position opposing rent control or anything that looks like it when it comes to regulating rents. There is very little difference between an MOU, an Accord or a Model Lease. Long-term leases offered by individual park owners are supported by MHET. They became a good option when the park owner was able to establish the terms and have the leases exempt from rent control should it be adopted at some point. Long-term lease protections against rent control worked, but now the protection is no longer available. Long-term leases are still being offered and are in place until rent control is adopted.

 

For the purposes of this discussion the term MOU will be used. MOU’s are similar in a way to long term leases because they are specific about annual rent increases, rent increases on turn over, the pass through of capital improvements, property tax increases, etc. However, the difference is the MOU is an agreement between the jurisdiction and the park owners in the jurisdiction. The terms of the MOU are agreed to by the jurisdiction and the park owners. Each park owner is bound to comply with the terms of the MOU during the term of the agreement. An MOU may not be changed during its term unless all signers agree. Ten jurisdictions in California have adopted MOU’s.  The first was in 1995 and the most recent was in 2023. The terms range from 5 years to 20 years. In almost all of the cases, the terms have continued to be extended from their original length.

 

MHET is studying and evaluating the various MOU’s because there is currently a discussion in the city of Corona to adopt an MOU or a rent control ordinance, or both.  One of the questions when considering participation in an MOU is whether it might be exempt from statewide rent control should it be passed? Were long-term leases offered by park owners when they were exempt from rent control still exempt from statewide rent control if it had been enacted? These are important distinctions that need to be clarified.  However, when considering a MOU or rent control there are big differences between the two. The most important is the limited city involvement in the administration of an MOU verses the constant involvement and fees charged to administer a rent control ordinance by a city or their contractor.