Tag Archives: Contracts

Mobilehome Park Owners Forbidden from Renting Their Own Mobiles?

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Das Williams, a member of the California State Assembly, asked Attorney General Kamala D. Harris for an opinion on the following question: “If the management of a mobilehome park has enacted rules and regulations generally prohibiting mobilehome owners from renting their mobilehomes, is park management bound by these same rules and regulations?”  Opinion No. 11-703, available here.

The attorney general’s answer, somewhat surprisingly, is YES.

Why does this matter?  Because mobilehome park owners often have difficulty filling their parks with mobilehome owners.  On occasion, they have resorted to buying mobiles themselves and placing them in vacant park spaces, and then selling or renting them to potential residents.

In recent years, selling mobiles to residents has gotten much more complicated, as the state legislature is deliberating whether to adopt laws prohibiting park owners from financing the sale of park-owned mobiles to residents unless the mobile home park owner/manager is a licensed mortgage loan originator.   (See SB 376 from the 2011-12 legislative session.  It is still showing as “active,” although no hearings are scheduled as of the time of this writing.  The current status of the bill can be seen here.)  Federal laws may already require this, so the state of the law is a bit unclear.

Many mobilehome park owners have gone the easier route of purchasing mobiles to fill the vacant spaces and renting out those spaces to residents.  But now, based on the Attorney General’s opinion, park owners are prohibited from doing that if they have a park rule that prohibits tenants from renting their homes to third parties.

Many mobilehome parks have rules in place that prohibit mobilehome owners within the park from renting out or subletting their mobiles to others.  The policy behind the rule is that it is generally very difficult for mobilehome park management to enforce the park rules against those subtenants/sublessees, because there is no privity of contract between the park management and the resident.

However, Civil Code Section 798.23(a) states that the owners of the park and all employees of the park are subject to all of the same rules and regulations.  If the rules state that a mobile home owner cannot lease his or her mobilehome to a third party, then the rules also require that the mobilehome park owners are bound by the same restriction, even though the policy behind the no-subletting rule doesn’t apply when the mobilehome park owner is renting out a park-owned mobilehome.

So far, we have been unable to find any litigation that supports the attorney general’s new opinion, and that opinion is not binding law.  However, mobilehome park owners may want to play it safe by amending their park rules (giving the appropriate notice to the tenants, of course) to allow subleases only if the sublessee signs a contract with park management agreeing to abide by the community rules.

Author: Amy Howse

Where Do I Have to File My Lawsuit? Venue Selection Clauses May Now Be Enforceable

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One issue that frequently arises in contract disputes is where to litigate the dispute.  This particularly becomes an issue when the parties to the contract are located in different states or countries, but can also arise when the parties are situated in different counties within the same state.

Forum selection clauses generally determine which state or country is the permissible location for litigating disputes.  Because the laws of states and countries vary, forum selection clauses are typically more about which choice of law will apply than about the physical location where the lawsuit will be brought.  The courts have long held that forum selection clauses are generally enforceable.  See The Bremen v. Zapata Off-Shore Company, 407 U.S. 1 (1972); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).

Venue selection clauses are a slightly different animal.  Venue selection clauses attempt to prescribe which location within a state will hear the dispute.  Thus, venue selection clauses aren’t about choice of law, they are about the convenience to one or more of the parties of litigating in a certain county.  If you have parties located in neighboring counties, the burden of litigating in one county versus the other is relatively small.  However, if one party is located in Shasta County, for example, and the other is in Orange County, the travel costs for one of the party’s attorneys, clients, and witnesses can add significant expense to the cost of litigating.

Back in 1929, the California Supreme Court decided that venue selection clauses were unenforceable.  General Acceptance Corp v. Robinson, 207 Cal. 285 (1929).  The court reasoned that the legislature was tasked with determining the appropriate venue for lawsuits, and the parties to a contract couldn’t change that.

However, in Battaglia Enterprises v. Superior Court, 215 Cal. App. 4th 309 (2013), the Court of Appeal determined that if multiple venues would be appropriate under the Code of Civil Procedure, and one of those venues is the one designated by the contract’s venue selection clause as the exclusive venue for disputes, that Court would enforce the clause and require the parties to litigate in that venue.

In light of this recent development, companies and individuals should take a fresh look at their contracts and determine whether a venue selection clause would be helpful.  The cost of having to litigate a dispute in a distant county could vastly outweigh the price of having an attorney review your key contracts in advance.  Give us a call if you’d like some assistance in reviewing your key contracts.

Battaglia Enterprises v. Superior Court, 215 Cal. App. 4th 309 (2013).

Author: Amy Howse