2014 – H 7866 SUBSTITUTE A
Enacted 07/01/14
A N A C T
RELATING TO PROPERTY - LEASED LAND DWELLINGS
Introduced By: Representatives McNamara, and Guthrie
Date Introduced: March 04, 2014
It is enacted by the General Assembly as follows:
SECTION 1. Section 34-18.2-3 of the General Laws in Chapter 34-18.2 entitled "Leased Land Dwellings" is hereby amended to read as follows:
34-18.2-3. Transfer of leased land -- Right of first refusal. --
(a) In any instance in which a land owner landowner has been sent
a certified letter from an incorporated home owners' homeowners’ association
indicating that the association has at least fifty-one percent (51%) of the home
owners homeowners owning residential dwellings on the landowners’
land as members and has articles of incorporation specifying all rights and
powers, including the power to negotiate for and acquire land on behalf of the
member homeowners, then, before leased land may be sold for any purpose and
before it may be leased for any purpose that would result in a discontinuance,
the owner shall notify the association by certified mail of any bona fide offer
that the owner intends to accept, to buy the leased land or to lease it for a
use that would result in a discontinuance. The owner shall also give notice by
certified mail to the incorporated home owners' homeowners’ association
of any intention to sell or lease the land for a use which will result in a
discontinuance within fourteen (14) days of any advertisement or other public
notice by the owner or his agent that the land is for sale or the land upon
which the residential dwelling is located is for lease.
(b) The notice to the home owners'
homeowners’ association shall include the price, calculated as a single
lump sum amount which reflects the present value of any installment payments
offered and of any promissory notes offered in lieu of cash payments or, in the
case of an offer to rent the capitalized value of the annual rent, and the
terms and conditions of the offer. Any incorporated home owners' homeowners’
association entitled to notice under this section shall have the right to
purchase, in the case of a third party bona fide offer to purchase, or to lease
in the case of a third party bona fide offer to lease, the land, provided it
meets the same price and the same terms and conditions of any offer of which it
is entitled to notice under this section by executing a contract or purchase
and sale or lease agreement with the owner within one hundred eighty (180) days
of notice of the offer. No owner shall attempt to terminate the tenancy of any
member of the incorporated home owners' homeowners’ association
except for nonpayment of rent for a period of one hundred and eighty (180) days
following a notice of sale or lease under this section. No owner shall
unreasonably refuse to enter into, or unreasonably delay the execution of a
purchase and sale or lease agreement with a home owners' homeowners’
association that has made a bona fide offer to meet the same price and the same
terms and conditions of an offer for which notice is required to be given
pursuant to this section. Failure of the incorporated home owners' homeowners’
association to execute such a purchase and sale agreement or lease within the
first one hundred eighty (180) day period shall serve to terminate the right of
the association to purchase or lease the land. The time periods may be extended
by agreement of the association and the owner. Nothing herein shall be
construed to require an owner to provide financing to any association or to
prohibit an owner from requiring an association which is offering to lease land
to have within its possession a sum equivalent to the capitalized value of the
proposed rent of the land and requiring that a portion of the sum, of an amount
necessary to pay the rent on the land for a period of no greater that two (2)
years, be kept in escrow for such purpose during the term of the lease. In the
event that an incorporated home owners' homeowners’ association
accepts an offer under this section, the tenancy of the members of the
association shall be extended on a month to month basis until the time set in
the offer for closing on the offer.
(c) (1) When an owner has been
properly notified under the terms of this section of the existence of an
incorporated home owners' homeowners’ association, the owner
shall include in any purchase and sale agreement or lease agreement which would
be subject to this section, a statement informing the purchaser or lessee of
the home owners homeowners association's right of first refusal
pursuant to this section.
(2) In addition, the home owners'
homeowners’ association shall record in the land evidence records of the
city or town where the leased land is located, a copy of its articles of
incorporation together with a statement setting forth its statutory right of
first refusal to purchase or lease the land of the owner pursuant to this
section.
(3) The right of first refusal created
herein shall not be deemed to allow a homeowners' association to vary the terms
of any offer made to an owner and to make a counteroffer to said owner. The
homeowners' association shall have the right of first refusal only on the exact
terms and conditions as set forth in the offer received by the owner; provided,
however, that the home owners' homeowners’ association shall not
be required to meet any terms or conditions that would result in the removal of
members of the association from the property which is the subject of the offer.
(4) The right of first refusal created
herein shall inure to a home owners' homeowners’ association for
the time periods provided in this section, beginning on the date of notice to
the home owners' homeowners’ association. The effective period of
the right of first refusal shall apply separately for each substantially
different bona fide offer to purchase the land or to lease it for a purpose
that would result in a discontinuance, and for each offer the same as an offer
made more than three (3) months prior to the later offer; provided, however,
that in the case of the same offer made by a prospective buyer who has
previously made an offer for which notice to a home owners' homeowners’
association was required by this section, the right of first refusal shall
apply only if the subsequent offer is made more than six (6) months after the
earlier offer. The right of first refusal shall not apply with respect to any
offer received by the owner for which notice to a home owners' homeowners’
association is not required pursuant to this section.
(5) No right of first refusal shall
apply to a government taking by eminent domain or negotiated purchase, a forced
sale pursuant to a foreclosure, transfer by gift, devise or operation of law,
or a sale to a person who would be included within the table of descent and
distribution if there were to be a death intestate of a land owner landowner.
(d) In any instance in which the
incorporated home owners' homeowners’ association of leased land
is not the successful purchaser or lessee of the land, the seller or lessor of
the land shall prove compliance with this section by filing an affidavit of
compliance in the official land evidence records of the city or town where the
property is located within seven (7) days of the sale or lease of the land.
(e) No land owner landowner
shall attempt to increase any rental amount due regarding leased land from the
time of his or her receipt of any bona fide offer to purchase or to lease for a
purpose which would result in a discontinuance, until the expiration of the
time period during which a home owners' homeowners’ association
may exercise its right of first refusal or until the time set in the offer for
closing on the offer.
(f) In the event that an owner terminates the tenancies of all of the members of the incorporated association, the right of first refusal created by this section shall inure to the benefit of the former membership of the association for a period of one year after the termination of the tenancies, or until the houses which they occupied are removed or destroyed, whichever first occurs, with the former members having the same rights and obligations as existed prior to the terminations.
(g) The landowner shall tender a written lease incorporating the terms and conditions of the tenancy to all tenants and prospective tenants. The lease shall not be inconsistent with the provisions of this chapter.
(h) A covenant of good faith and fair dealing shall be deemed to be incorporated into the terms and conditions of all tenancies between a homeowner and landowner involving a residential dwelling which is located on leased land, as well as the negotiation process associated therewith.
SECTION 2. Chapter 34-18.2 of the General Laws entitled "Leased Land Dwellings" is hereby amended by adding thereto the following sections:
34-18.2-4. Termination of lease. -- (a) A landowner desiring to terminate a tenancy with a homeowner based on the discontinuation of the use of the leased land as leased land (and not for cause) shall provide the affected homeowner(s) with at least fifteen (15) months' notice thereof.
(b) In the event of a termination of a tenancy (or a failure to renew a tenancy) with a homeowner without cause as provided in subsection (a) of this section, or in the event of a termination (or a failure to renew a tenancy) for cause, the landowner shall take reasonable steps to take control of any residential dwelling remaining on the leased land following said termination, and shall, upon at least ninety (90) days of said advertising sell the dwelling pursuant to commercially reasonable terms. The proceeds of such sale shall be applied as follows:
(1) First, to satisfy any federal, state or local liens on the dwelling;
(2) Second, to cover the fair and reasonable costs incurred by the landowner to secure the dwelling and accomplish its sale;
(3) Third, to satisfy any arrearages for unpaid rent or other costs remaining due under the tenancy;
(4) Fourth, to satisfy any mortgage or other liens on the property; then
(5) The balance shall be remitted to the homeowner.
(c) During the aforesaid ninety (90) day notice period, the homeowner may avert the advertising and sale of the dwelling by the landowner as aforesaid, by satisfying any arrearages for unpaid rent or other costs remaining due under the tenancy, and causing the dwelling to be removed from the formerly leased land, by sale or otherwise.
34-18.2-5. Rent increases for leased land. – (a) A landowner, as defined in § 34-18.2-2, shall give the homeowner sixty (60) days' written notice prior to any lot rent increase. The written notice shall set forth the current rent, the proposed rent, and the date upon which the increase shall take effect.
(b) If a homeowner or a homeowners' association, having, the power and authority to negotiate rental terms on behalf of member homeowners, believes that the rent increase is "excessive" as defined in this section, the homeowner or authorized homeowners' association may submit the matter to binding arbitration pursuant to chapter 3 of title 10. In the event the parties are unable to agree upon an arbitrator, an arbitrator shall be appointed in the manner set forth in chapter 3, of title 10. The costs and expenses of the arbitrator shall be borne equally by the landowner and the homeowner or authorized homeowners' association.
(c) An "excessive" rent increase, for purposes of this section, is an increase which unreasonably exceeds the fair rental value of the property based on market conditions at the time.
(d) The arbitrator shall promptly hear the dispute and render a decision based on the "excessive" rent increase standard as set forth in this section.
(e) No lot rent increase shall go into effect until the earlier of:
(1) Completion of the binding arbitration process; or
(2) Ninety (90) days after the written notice given under subsection (a) of this section.
(f) This section shall not apply to chapter 31 of title 44 of the Rhode Island general laws.
34-18-2.634-18.2-6. Leased land exempt. – The provisions of §§ 34-18-2.4 and 34-18-2.5 of this chapter
shall not apply to any landowner who holds a recreation facility license under
chapter 21 of title 23, or a trailer park or campground license issued by the
municipality in which it is located on leased land which is leased to at least
ninety percent (90%) of the homeowners on a seasonal basis.
SECTION 3. This act shall take effect upon passage.
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LC004911/SUB A/2
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