Bank form causes mobile home sales to fall through across BC
Ed Kowsi sits on the covered porch of his mobile home in the Hideaway Trailer Park in Revelstoke. He rifles through papers gathered in a folder in front of him. Kowski and his wife have been trying since June to sell their trailer and move out of town, but they can’t because the owner of the trailer court won’t sign a form that allows the buyer to borrow money for the sale.
“Well it’s very stressful, my wife is quite upset about what’s going on, you know, it’s not a good situation to be in when you can’t sell,” he said.
The form in question is in his folder—it’s called the Model Assignment of Lease Consent Agreement for Manufactured Homes. Trailer park owners call it the 1097. The form Kowski’s landlord wouldn’t sign is from the Revelstoke Credit Union, and it has been in use since 2002.
Willy Kovacic, the president of the Manufactured Home Park Owners Association of B.C., says trailer park owners have been trying to get a better form from the banks for decades.
Their problem with the form is it adds “terms and conditions” that complicate the tenancy agreement, he said.
When someone borrows money to buy a trailer it’s called a chattel mortgage because they own the trailer, but the park owner owns the land. The bank requires the form because of this tenancy relationship.
The form as it is “complicates the relationship between the bank and the landlord,” Kovacic said.
All the form needs to say is that the bank will take over responsibility of the home and continue to pay rent if the owner defaults on payments, he said.
Kovacic says in the past he’s crossed out some of the conditions, and the bank accepted the amended form.
“If this form is absolute and I’m amending it, why do we have to even bother?” Kovacic said.
It’s not clear why park owners are now refusing to sign this form.
Kovacic says trailer park owners talk to each other. There is an owner on Vancouver Island who had a problematic tenant who stopped paying rent. She tried to evict them, but the bank said she couldn’t, according to Kovacic. He said it was the form that gave the bank the ability to do this.
In the end it cost the owner $15,000 to resolve the problem with the bank, he said.
“When other landlords hear how frustrating it can be with a bank, they say, ‘Well, why would I want to sign that form that could explode into a very expensive proposition?'” Kovacic said.
Stoke FM reached out to Andrew Young, the owner of Hideaway Trailer Park, and didn’t hear back. Michael Schadinger, a lawyer from Arrow Law, represents the owner. He refused to speak to Stoke FM about the form in general, citing client confidentiality.
“I’m sure you know how much lawyers cost,” he said. “I’m sure your employer won’t be able to compensate me $300 an hour to talk to you.”
Todd Arthurs is Kowski’s real estate agent in Revelstoke. He doesn’t know what’s going on, but he said after the owners of Hideaway didn’t sign the form, a few other sales in town fell through for the same reason. He’s also heard of it happening in Salmon Arm.
Kovacic wants the banks to come up with a simple, uniform form. Kowski wants the same thing, and he’s doing everything he can do make that happen so his sale goes through.
From the table on his porch, he reads a statement about the steps he’s taken.
Including contacting the Canadian Mortgage and Housing Corporation and the BC Residential Tenancy Branch, and writing a letter and delivering it to every lending institute in Revelstoke and to as many tenants of Hideaway as he could.
He met with Revelstoke’s mayor, Gary Sulz.
“It’s a massive problem,” Sulz said.
He can’t do anything but encourage banks and the lawyers representing owners to get together and come up with a form that works. He also said it’s out of his hands because it’s happening across B.C.
Revelstoke has 17 trailer parks, and 13 per cent of the population lives in them.
“It’s an important factor for housing people in our community,” Sulz said.
If people can’t buy or sell trailers, Sulz is worried it will continue to push out a demographic who can no longer afford to live in Revelstoke.