HF4645

Purpose

• Establish and clarify residents’ rights when a manufactured home park is being sold or redeveloped, with a focus on preserving the park as a manufactured home community and giving residents a path to match certain offers.
• Remove the current unsolicited-sale notice requirements in the existing statute and replace the process with a residents’ right-of-first-refusal framework and related protections.

What the bill does (main provisions)

• Right of first refusal for residents when close or conversion is planned:
  • Before a park sale is finalized, the buyer must notify the park owner in writing if they intend to close or convert the park within one year.
  • The park owner must give every resident a 45-day written notice of the buyer’s intent, the proposed cash price, and the material terms and conditions.
  • During the 45-day period, a representative acting for residents can counteroffer to meet the buyer’s cash price and terms and may work toward an agreement to keep the park as a manufactured home park.
  • The park owner must negotiate in good faith to reach a purchase agreement on the same cash-price terms, though the seller is not required to offer owner financing.
• Details of the purchase process for residents’ representatives:
  • The purchase agreement must allow a commercially reasonable due diligence period with access to information needed to evaluate the purchase, possibly under a confidentiality agreement.
  • Residents’ representatives must provide 10% of the offer price as earnest money when they gain the required signatures; this money is refundable after six months, but can become nonrefundable if the representative cannot complete the purchase and the buyer withdraws.
  • If the park is sold to a different buyer for a lower price within six months, the park owner is paid the difference from the earnest money.
  • If a sale to a residents’ representative occurs, the representative must certify to the commissioner of commerce that the park will be preserved as a manufactured home park for ten years from the sale date.
• Exceptions to the ROFR process:
  • The ROFR process does not apply to certain transfers and transactions, including: transfers to nonprofits or governmental entities, transfers to affiliates or related entities, transfers within partnerships, transfers between joint tenants or tenants in common, exchanges of the park for other property, conveyances incidental to financing, foreclosures or cancellations of deeds, intestate distributions, or recent transfers where the owner had already given notice under a related statute.
  • An exception does not apply if the buyer intends to close the park or convert within one year.
• Repeal of the unsolicited-sale notice framework:
  • The bill repeals Minnesota Statutes that previously required notices about unsolicited park-sale offers (and the Minnesota Housing Finance Agency’s role in distributing those notices).
  • As a result, the formal “unsolicited offer” notice process and related public-disclosure requirements are removed and replaced by the new ROFR process described above.

How this changes existing law

• Moves from a notice-based unsolicited-sale regime to a resident-centered ROFR framework, giving residents a formal chance to match purchase offers and preserve park use.
• Adds explicit duties on a buyer and on a park owner during the 45-day ROFR window, including written notices, due-diligence access, and a structured earnest-money arrangement.
• Introduces a ten-year preservation covenant for parks sold to residents or their representatives.
• Establishes specific exceptions to the ROFR process for a broad set of corporate and financing-related transfers.
• Removes the prior requirement to notify the Minnesota Housing Finance Agency and residents of unsolicited offers.

Significant changes to the law

• Replaces the unsolicited-sale notice regime (327C.097) with a resident-focused right of first refusal (ROFR) mechanism.
• Requires 45-day resident notice and a formal negotiation window with a representative for residents.
• Requires a 10% earnest-money arrangement and a potential price-difference remedy if a lower-priced offer emerges.
• Adds a preservation requirement (ten-year) for parks sold to residents or their representatives.
• Broadly lists exemptions to the ROFR process, including nonprofit and governmental purchases, affiliate transfers, certain intra-ownership transfers, and other specified transactions.

Who is affected

• Manufactured home park owners and buyers: new duties to notify, negotiate, and consider resident-led offers; potential impacts on sale timelines and financing arrangements.
• Park residents: enhanced opportunity to retain the park as affordable housing, participate via a representative, and potentially secure a favorable purchase arrangement that preserves park use.

Practical implications to watch

• The introduction of a 45-day notice period and the possibility of a representative negotiating may extend the time before a park can be sold to someone other than the original buyer.
• Earnest-money provisions create financial stakes for residents’ representatives and may influence who acts as a representative.
• The ten-year preservation covenant creates a long-term commitment to maintaining the park as manufactured housing, which could affect post-sale use and financing.

Relevant Terms - manufactured home park - right of first refusal (ROFR) - intent to close or convert - 45-day notice - representative acting on behalf of residents - cash price - terms and conditions - due diligence period - commercially reasonable - confidentiality agreement - earnest money (10% of offer price) - refundable vs nonrefundable - price differential remedy - preservation for ten years - good faith negotiation - exemptions (nonprofit, governmental, affiliate transfers, partnerships, joint tenants/tenants in common, exchanges, financing-related transfers, foreclosures, intestate transfers) - unsolicited sale ( repealed framework) - Minnesota Housing Finance Agency (as it relates to the repealed framework)