Garages in M.H.C.

[Barbara Dresher]

Hi Chrissy,

How are you doing?

I want to know your opinion of whether or not a Garage can be "sold" as part of the home in a land lease community or if it is always considered part of the "real estate" of the Community owner? Sometimes the garage is taxed as "personal property" to the home owner and sometimes it is taxed as "real estate" to the Community Owner. It is confusing whether or not the Community Owner should rent the garage to the resident or sell it.

Thanks for your help!

Sincerely,
Barbara Dresher
Community Owner of 6 Communities

[Chrissy Jackson]

Barbara - good to hear from you!!! I have seen garages done both ways. In some communities, they are owned by the community, real taxes paid by the community, and leased to the resident. In some communities, the garages are clustered and not even on the homesite of the resident who leases them. In other communities a garage is either an option or a requirement, but it is owned by the resident and taxed as personal property. Normally, of course, these homesites are a tad bit bigger, so rents are a bit higher. In making a determination, I would look at other communities around there, decide what works best in your market, consider the size of your homesite, and find out what your residents want. It may be that a mixture of methods works best for your community.

[Barbara Dresher]

thanks Chrissy for your response!

BARBARA DRESHER

[Barbara Dresher]

thanks Chrissy for your response!

BARBARA DRESHER

[Edward "Ed" Hicks]

Barbara:

It has been my experience in most areas, that the property tax assessor treats a garage as real property, and sends the tax bill to the community owner.

If the community owner doesn't have a provision in the lease with the homeowner, it may be difficult to pass on these taxes. Taxation in this case has nothing to do with who paid for its erection; the community owner or the homeowner.

In most cases I have seen, to avoid confusion, the community owner pays the costs of erecting the garage, and then leases it to the homeowner for a monthly fee in addition to the site lease payment.

Since you have communities in MI, IA, and IL it would be a good idea to check the leases you have for each to see that there is such a provision. You also should check with each jurisdiction to see how they tax garages if at all.

Edward "Ed" Hicks
"Ask Eddie" in the Journal
Of Manufactured Housing
PO Box 2795
Brandon, FL 33509
(813) 661-5901 Office
(801) 846-8322 E-Fax
www.factorybuilthome.com/