SENATE BILL NO. 937

A bill to amend 1987 PA 96, entitled

"The mobile home commission act,"

by amending sections 35, 41, 43, and 48 (MCL 125.2335, 125.2341, 125.2343, and 125.2348), sections 43 and 48 as amended by 2015 PA 40, and by adding section 30m.

the people of the state of michigan enact:

Sec. 30m. (1) Except as otherwise provided under subsection (7), an owner of a mobile home park or seasonal mobile home park shall not make a final unconditional acceptance of an offer for the sale or transfer of a mobile home park or seasonal mobile home park without first notifying the residents of the mobile home park or seasonal mobile home park and the department of the owner of the mobile home park or seasonal mobile home park's intent to sell or transfer the mobile home park or seasonal mobile home park and requesting that the residents notify the owner in writing within 60 days after receipt of the notice from the owner that they intend to purchase the mobile home park or seasonal mobile home park. The notice from the owner required under this subsection may be accompanied by a confidentiality or nondisclosure agreement to be signed by any person receiving the sale price, terms of sale, and books and records of the mobile home park or seasonal mobile home park. A confidentiality or nondisclosure agreement must not be structured in a way that creates an unreasonable barrier to raising money to purchase the mobile home park or seasonal mobile home park.

(2) If the residents of the mobile home park or seasonal mobile home park do not provide the written notice within the time period described under subsection (1), the owner of the mobile home park or seasonal mobile home park does not have any further obligations under this section.

(3) If the residents of the mobile home park or seasonal mobile home park want to purchase the mobile home park or seasonal mobile home park, they must, within the 60-day period described under subsection (1), send a written notice to the owner that they have incorporated a homeowners' association or cooperative and intend to purchase the mobile home park or seasonal mobile home park. If the owner requires a confidentiality or nondisclosure agreement, the residents must include the confidentiality or nondisclosure agreement signed by any person receiving the sale price, terms of sale, and books and records of the mobile home park or seasonal mobile home park. On receipt of the written notice described under this subsection, the owner shall provide the sale price, terms of sale, and books and records of the mobile home park or seasonal mobile home park to the homeowners' association or cooperative incorporated by the residents of the mobile home park or seasonal mobile home park. Within 45 days after the owner provides the sale price, terms of sale, and books and records of the mobile home park or seasonal mobile home park, the homeowners' association or cooperative may provide a written offer to purchase the mobile home park or seasonal mobile home park. The written offer must include a proposed due diligence, financing, and closing period and documentation that shows that the owners of more than 50% of the owner-occupied mobile homes in the mobile home park or seasonal mobile home park support the offer and that the homeowners' association or cooperative is working with a financing entity to secure financing for the purchase of the mobile home park or seasonal mobile home park and attests that the homeowners' association or cooperative has the financial ability to operate the mobile home park or seasonal mobile home park and would reasonably be expected to qualify for licensure under this act. The owner must consider the written offer and negotiate in good faith with the homeowners' association or cooperative regarding a potential purchase of the mobile home park or seasonal mobile home park. If the homeowners' association or cooperative does not provide a written offer to purchase the mobile home park or seasonal mobile home park after the owner provides the sale price, terms of sale, and books and records of the mobile home park or seasonal mobile home park, the owner has no further obligation under this section.

(4) If an owner requires a confidentiality or nondisclosure agreement and the residents of the mobile home park or seasonal mobile home park disclose information in violation of the confidentiality or nondisclosure agreement, the owner is no longer required to comply with this section.

(5) Notice required under this section must be made by certified mail, return receipt requested.

(6) A resident of a mobile home park or seasonal mobile home park who alleges that an owner of a mobile home park or seasonal mobile home park failed to comply with this section may bring an action in a court of competent jurisdiction to recover actual damages incurred as a result of a violation of this section. The court may award a civil fine of not less than $10,000.00 but not more than $250,000.00. The court shall consider the severity of the violation and the total sales price of the mobile home park or seasonal mobile home park in determining the civil fine imposed under this subsection. The civil fine imposed under this subsection is the sole and exclusive remedy for a violation of this section. The failure of an owner of a mobile home park or seasonal mobile home park to comply with this section does not affect the sale or transfer of the mobile home park or seasonal mobile home park, or constitute grounds to set aside the sale or transfer of the mobile home park or seasonal mobile home park.

(7) An owner of a mobile home park or seasonal mobile home park is not required to give the notice as described under subsection (1) or comply with this section if any of the following apply:

(a) A bank, mortgage company, or any other mortgagee has foreclosed on the mobile home park or seasonal mobile home park and the bank, mortgage company, or any other mortgagee does either of the following:

(i) Sells the mobile home park or seasonal mobile home park at a foreclosure sale.

(ii) Sells the mobile home park or seasonal mobile home park after purchasing the mobile home park or seasonal mobile home park at a foreclosure sale.

(b) The sale or transfer of the mobile home park or seasonal mobile home park is to a family member of the owner of the mobile home park or seasonal mobile home park or a trust of which the beneficiaries are family members of the owner of the mobile home park or seasonal mobile home park.

(c) The sale or transfer of the mobile home park or seasonal mobile home park is by a partnership to 1 or more of its partners.

(d) The conveyance of an interest in the mobile home park or seasonal mobile home park is incidental to the financing of the mobile home park or seasonal mobile home park.

(e) The sale or transfer of the mobile home park or seasonal mobile home park was made in accordance with an eminent domain order.

(f) The sale or transfer of the mobile home park or seasonal mobile home park is among members of a limited liability company that have been members of the limited liability company for at least 1 year.

(g) The sale or transfer of the mobile home park or seasonal mobile home park is to a parent, subsidiary, or affiliate of the owner of the mobile home park or seasonal mobile home park, if the owner of the mobile home park or seasonal mobile home park is a company.

(8) An owner of a mobile home park or seasonal mobile home park shall not accept or conditionally accept an offer for the sale, lease, or transfer of the mobile home park or seasonal mobile home park that contains any provision preventing or penalizing the owner of the mobile home park or seasonal mobile home park for entering into a purchase agreement with a homeowners' association or cooperative incorporated by the residents.

(9) This section does not allow a resident of a mobile home park or seasonal mobile home park to attach the civil fine imposed under this section to the mobile home park or seasonal mobile home park sold or transferred in violation of this section.

Sec. 35. (1) A person who that applies for a license to own a mobile home park or seasonal mobile home park or a construction permit under this act, which is for other than a domestic corporation, shall file with the commission, department, in a form the commission department prescribes, an irrevocable consent to service of process appointing the commission department to be its the person's attorney to receive service of lawful process in any noncriminal action or proceeding against it or its that person or that person's successor, executor, or administrator , which that arises under this act or a rule promulgated or order issued under this act after the consent to service of process is filed. , Service of process under this subsection applies with the same force and validity as if served personally on the person filing the consent to service of process.

(2) When a person, including a nonresident of this state, engages in conduct prohibited or made actionable by this act or a rule promulgated or order issued under this act, whether or not consent to service of process was filed and personal jurisdiction over him or her that person cannot otherwise be obtained in this state, engagement in that conduct shall be prohibited or made actionable by this act or a rule promulgated or order issued under this act is considered equivalent to his or her the person's appointment of the commission to be his or her the person's attorney to receive service of lawful process in a noncriminal action or proceeding against him or her or his or her that person or the person's successor, executor, or administrator. which grows out of that conduct and which is brought under this act or a rule promulgated or order issued under this act, Service of process under this subsection applies with the same force and validity as if served on the person personally.

(3) Service of process under subsection (1) or (2) may be made by filing a copy of the process in the office of the commission together with a $25.00 fee. The service is not effective unless the plaintiff, which may be the commission in an action or proceeding instituted by it, immediately sends notice of the service and a copy of the process within 5 days of the receipt of the process, by registered or certified mail to the defendant or respondent at his or her last known Michigan address of the defendant or respondent or takes other steps which that are reasonably calculated to give actual notice , and the plaintiff's to the defendant or respondent. The commission shall file an affidavit or other proof of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

Sec. 41. (1) The department, a prosecuting attorney, or municipal attorney may bring an action in a court of competent jurisdiction against a person to enjoin that person from engaging or continuing in a violation of this act , or a rule promulgated under this act.

(2) If an owner of a mobile home park or seasonal mobile home park owns the mobile home park or seasonal mobile home park without a license and does not have a complete application for a license pending with the department, any individual residing in the mobile home park or seasonal mobile home park may, subject to subsection (3), bring an action in a court of competent jurisdiction for injunctive relief, damages, or attorney fees and costs. If the court finds that the owner of a mobile home park or seasonal mobile home park owns the mobile home park or seasonal mobile home park without a license and that a complete application for a license is not pending with the department before the filing of the action, the court may do any of the following:

(a) Order an injunctive relief. Injunctive relief under this subdivision includes, but is not limited to, any of the following:

(i) Issuing a permanent or temporary injunction or restraining order to enforce the licensing provisions of this act.

(ii) Issuing a declaratory judgment that owning a mobile home park or seasonal mobile home park without a license violates this act.

(iii) Enjoining the owner of a mobile home park or seasonal mobile home park from owning a mobile home park or seasonal mobile home park without a license.

(b) Award statutory damages of not more than $10,000.00 or penalties as described under section 42, and attorney fees and costs.

(3) Before commencing an action under this section, the individual must provide the owner of the mobile home park or seasonal mobile home park with a written notice of action on the claim. The notice of action required under this subsection must include all of the following statements:

(a) That, based on the information obtained from the department's mobile home park database, the individual has a good-faith belief that the owner of the mobile home park or seasonal mobile home park owns the mobile home park or seasonal mobile park without a license and has not submitted a complete license application to the department in accordance with this act.

(b) That the owner of the mobile home park or seasonal mobile home park has 30 days from the date of receipt of the notice of action to provide the individual with evidence that the owner of the mobile home park or seasonal mobile home park owns the mobile home park or seasonal mobile home park with a valid license or has a complete license application pending with the department.

(c) That, if the owner of the mobile home park or seasonal mobile home park fails to provide the information described under subdivisions (a) and (b), the individual may file an action in a court of competent jurisdiction as provided under this section.

(4) The notice of action required under this section must be delivered by personal service or sent by registered or certified mail, return receipt requested.

(5) If, after the filing of an action in accordance with this section, an owner of a mobile home park or seasonal mobile home park submits a complete license application to the department, the court may issue injunctive relief or award damages or attorney fees and costs as described under this section.

(6) If a court awards damages under this section, the court shall order the plaintiff to disburse any money awarded in damages among all residents of the mobile home park or seasonal mobile home park on a pro rata basis, on receipt of the funds.

(7) If an individual files an action in accordance with this section against an owner of a mobile home park or seasonal mobile home park and obtains monetary compensation under this section that is distributed in accordance with subsection (6), that individual and a resident of the mobile home park or seasonal mobile home park that received money under this section shall not file any action under this section against an owner of the mobile home park or seasonal mobile home park for at least 12 months after the date of the judgment.

(8) If a person brings an action against an owner of a mobile home park or seasonal mobile home park alleging that the owner of the mobile home park or seasonal mobile home park owns the mobile home park or seasonal mobile home park without a license but it is determined that the person brought the action knowing that the owner of the mobile home park or seasonal mobile home park is licensed or has submitted a complete license application and did not follow the requirements of this section, the court may award costs or impose remedies in accordance with section 2591 of the revised judicature act of 1961, 1961 PA 236. MCL 600.2591 or MCR 1.109(E).

Sec. 43. (1) If, after notice and a hearing as provided in the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, a person is determined to have violated this act, the commission may impose do any of the following:

(a) Impose 1 or more of the following penalties:

(i) (a) Censure.

(ii) (b) Probation.

(iii) (c) License limitation.

(iv) (d) License suspension. The commission may request the appointment of a receiver when taking action under this subdivision.

(v) (e) License revocation. The commission may request the appointment of a receiver when taking action under this subdivision.

(vi) (f) License denial.

(vii) An administrative fine of not more than $5,000.00.

(viii) (g) A civil fine of not more than $50,000.00.

(ix) (h) Restitution.

(b) Require posting financial assurance in the form of a bond, cash deposit, or other financial arrangement and in an amount the commission considers necessary to maintain or repair any infrastructure or facilities of a mobile home park or seasonal mobile home park to ensure the health, safety, and welfare of the residents of the mobile home park or seasonal mobile home park.

(c) Request the appointment of a receiver. This subdivision applies if the violation is the operation of a mobile home park or seasonal mobile home park without a license issued by the department and the department complied with the requirements of subsection (2).

(2) If the department determines that a mobile home park or seasonal mobile home park located in this state is owned by a person that does not have a license issued by the department to own that mobile home park or seasonal mobile home park, the department shall provide written notice to the unlicensed owner of the mobile home park or seasonal mobile home park. The department shall forward a copy of the written notice provided to an unlicensed owner of a mobile home park or seasonal mobile home park under this subsection to the clerk of the city, village, or township where the mobile home park or seasonal mobile home park is located. The written notice provided under this subsection must require the unlicensed owner of the mobile home park or seasonal mobile home park to apply to the department for licensure within 30 days of the date of the notice. If the unlicensed owner of the mobile home park or seasonal mobile home park does not apply for licensure within the 30-day period provided under this subsection, the department shall commence proceedings to impose a fine on the unlicensed owner of the mobile home park or seasonal mobile home park. If the department determines that a person owned or owns a mobile home park or seasonal mobile home park without a license as required under section 16, the department shall impose a fine of not more than $250,000.00 after notice and a hearing as provided under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The department shall advise the attorney general of the failure of any person to pay any fine imposed under this section. The attorney general shall bring a civil action in a court of competent jurisdiction to recover the fine. In addition to the written notice described under this subsection, the department shall send a written notice to all identified lienholders of the mobile home park or seasonal mobile home park notifying them that the mobile home park or seasonal mobile home park is operating without a license. The department may charge a fee of up to $250.00 for identifying the lienholders if the owner of the mobile home park or seasonal mobile home park has not informed the department of all lienholders as required under this act. Notwithstanding subsection (1)(c), the department, a local unit of government, or a resident may request the appointment of a receiver.

(3) (2) A fine imposed under subsection (1) may be collected by the imposition of a judgment lien by a court or by obtaining a writ of garnishment against the person who has been determined to have violated this act. A writ of garnishment under this section must be issued by a court of competent jurisdiction and directed to this state or the state treasurer to satisfy the fine. To obtain a writ of garnishment under this subsection, the department must comply with the requirements of chapter 40 of the revised judicature act of 1961, 1961 PA 236, MCL 600.4001 to 600.4065. A fine collected under this section shall must be deposited with the state treasurer and credited to the mobile home code fund created in section 9.

(4) The department may not issue a license until the fees and any administrative fines previously assessed against the applicant and any person that holds a beneficial interest in the applicant's mobile home park or seasonal mobile home park by the department or commission that remain unpaid at the time of the license application, if applicable, are paid as provided under section 16(2)(c). The department shall advise the attorney general of the failure of any person to pay the fees or fines imposed under section 16. The attorney general shall, within 90 days of receiving notice from the department, bring a civil action in a court of competent jurisdiction to recover the fees or fines.

(5) (3) If the department determines that the owner or operator of a mobile home park or seasonal mobile home park has violated this act or rules promulgated under this act by failing to maintain or repair any infrastructure or facilities of the mobile home park or seasonal mobile home park, the department shall give notice of the determination by personal service or first-class mail to the local governments where the mobile home park is located , and the owner , the operator, of the mobile home park or seasonal mobile home park and, if financial assurance in the form of a bond has been posted under rules promulgated under section 16(2), 16, the surety executing the bond. If the department determines that a mobile home park or seasonal mobile home park has violated this act or rules promulgated under this act in a manner that causes a material deficiency, the department shall give notice of that determination to all secured parties by personal service or first-class mail. If the owner , operator, of the mobile home park or seasonal mobile home park or surety does not perform or commence the specified maintenance or repair within 60 days after service of the notice, the department or its authorized representative may enter the mobile home park or seasonal mobile home park and perform the specified maintenance or repair. At the request of the owner , operator, of the mobile home park or seasonal mobile home park or surety, the department may grant an extension of up to an additional 90 days. The owner , operator, of the mobile home park or seasonal mobile home park and any surety are jointly and severally liable for all expenses incurred by the department or its authorized representative in performing the specified maintenance or repair. The department shall certify the claim to the owner , operator, of the mobile home park or seasonal mobile home park and any surety, listing in the claim the items of expense in performing the maintenance or repair, and shall draw on any financial assurance for the payment of the claim. The department shall notify the local government where the mobile home park or seasonal mobile home park is located when the specified maintenance or repair has been completed.

(6) (4) This section does not prohibit actions from being taken under other sections of this act.

(7) (5) The pursuit in court of the lawful rights of a licensee does not constitute a violation of this act, regardless of the outcome of the court action.

(8) If it is determined that an owner of a mobile home park or seasonal mobile home park is unlicensed and there is no complete license application under review by the department, the department, lienholder, other affected person, or a resident of the mobile home park or seasonal mobile home park may petition the circuit court in the county in which the mobile home park or seasonal mobile home park is located to appoint a receiver to operate the mobile home park or seasonal mobile home park during the period in which the owner of the mobile home park or seasonal mobile home park is unlicensed. If the court finds that the owner of the mobile home park or seasonal mobile home park is unlicensed and there is no complete license application under review by the department, the court shall appoint a receiver to operate the mobile home park or seasonal mobile home park. The court shall determine the fair compensation for the receiver. A receiver appointed under this subsection must be a person currently licensed to own a mobile home park or seasonal mobile home park in accordance with this act or a person that meets the requirements for licensure under this act, as determined by the court. A receiver may not be the owner of the mobile home park or seasonal mobile home park, or a subsidiary, immediate family member, agent, attorney, representative, employee, or affiliate of the owner of the mobile home park or seasonal mobile home park, or any other person that is responsible for the day-to-day operation of the mobile home park or seasonal mobile home park or is under common control of the mobile home park or seasonal mobile home park with the owner of the mobile home park or seasonal mobile home park. Subject to court approval, a receiver appointed under this subsection shall do any of the following:

(a) Repair, renovate, or rehabilitate the mobile home park or seasonal mobile home park as needed to make the mobile home park or seasonal mobile home park comply with this act.

(b) Manage the mobile home park or seasonal mobile home park.

(c) Collect rent, utility service fees, and other fees from the residents of the mobile home park or seasonal mobile home park, as determined by the court, and pay the expenses of the mobile home park or seasonal mobile home park that are necessary to ensure continuing operation and services.

(d) Pursue necessary legal remedies against a resident of the mobile home park or seasonal mobile home park that fails to pay rent, utility service fees, or other fees or comply with this act. Legal remedies that may be pursued against a resident of the mobile home park or seasonal mobile home park under this subdivision include, but are not limited to, the institution of summary proceedings to recover possession of the premises from the resident of the mobile home park or seasonal mobile home park.

(e) Exercise other powers the court considers proper to the effective administration of the receivership.

Sec. 48. (1) If the department orders the owner or operator of a mobile home park or seasonal mobile home park to correct a violation of this act or rules promulgated under this act that imminently threatens the health or safety of the residents of the mobile home park or seasonal mobile home park or the public and the owner or operator fails to comply with the order, the department or the local government may bring an action to enforce the applicable regulations and to abate or enjoin the violation.

(2) If the violation is not corrected and imminently threatens the health or safety of the residents of the mobile home park or seasonal mobile home park or the public, the department or the local government may file a motion for a preliminary injunction or other temporary relief appropriate to remove the threat while the action is pending.

(3) The department or the local government shall serve a copy of the complaint and a summons on each owner, secured party, and lienholder of record , and any operator, of the mobile home park or seasonal mobile home park that can be identified by the department or the local government with the exercise of reasonable diligence. The local government shall also file a notice of the action with the register of deeds for the county where the mobile home park or seasonal mobile home park is located.

(4) The court shall make orders and determinations consistent with the objectives of this act. The court may enjoin the maintenance of an unsafe, unhealthy, or unsanitary condition, or a violation of the applicable regulations, and may order the defendant to perform maintenance and repairs or make other corrections including removal of a building or structure necessary to abate the condition. The court may authorize the department or the local government to perform maintenance or repairs or to remove a building or structure owned or operated by the owner or operator of the mobile home park or seasonal mobile home park. However, the court shall not authorize removal of a building or structure unless the cost of repair of the building or structure will be greater than the state equalized value of the building or structure.

(5) If the expense of maintenance, repair, or removal is not provided for by financial assurance under section 16(2)(b) or otherwise provided for, the court may enter an order approving the expense and place a lien on the real property for the payment of the expense. The order may establish the lien as a senior lien, except as to tax and assessment liens, and except as to a mortgage of first priority recorded prior to all other liens of record. The order may also specify the time and manner for foreclosure of the lien if the lien is not satisfied. To perfect the lien, a copy of the order shall must be filed with the register of deeds for the county where the mobile home park or seasonal mobile home park is located within 10 days after entry of the order.

Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 103rd Legislature are enacted into law:

(a) Senate Bill No. 934.

(b) Senate Bill No. 935.