The Legal Action Committee (LAC) of the Floating Homes Association continues to meet with County officials to iron out possible proposed changes to the Floating Home Residency Law, specifically the provisions that which went into effect in January 2023 limiting increases on berth rents upon sale of a floating home. For more background on this legislation, click on the orange legislation link at the end of this post.
Contrary to what the LAC had been told earlier, preliminary wording for the bill must be drafted before the bill is submitted to the legislature on February 16. The wording can be changed later in the legislative session.
LAC Vice Chair Wilford Welch stressed the committee’s need to keep residents informed as this legislation progresses. He referred to a summary of comments from the January dock meetings, compiled by Jenny Silva of Kappas East, as a guide to amending the law. That summary follows this report.
In the meetings, homeowners overwhelmingly favored a cap on berth rent increases when a home is sold. One formula under discussion would be to charge a certain percentage of the home’s sale price for the monthly berth rent. After that, subsequent increases would be capped at CPI plus 3%, not to exceed 5%. Other options are also under development and discussion by the LAC.
The summary also pointed out concerns over fees that are currently being passed through to homeowners in some marinas. Wilford indicated that members of the LAC plan to seek a legal opinion to determine whether any of the new fees are in conflict with the Floating Home Residency Law (FHRL) or other statutes. County officials are aware of the community concern over these fees. County Administrative Analyst Talia Smith is researching other statutory framework, such as the Tenant Protection Act, for wording that might be incorporated in the amended law.
Wilford Welch is finalizing a set of Frequently Asked Questions to provide more information about the work of the LAC. It will be emailed to all residents in the next few days.
The committee will meet again Monday February 12 to further consider options for the bill provisions dealing with vacancy control and pass-through fees. A report on that meeting will be published here in the Floating Times and disseminated as broadly as possible to the entire community.
Summary of January Dock Meetings
The FHA met with each of the floating home docks in January to discuss the proposed amendment to the Floating Home Residency Law. The conversations raised consistent themes regarding the legislation, summarized below.
- Homeowners are overwhelmingly opposed to the amendment as written (repeal of vacancy control if owners have a 10 year lease).
- Due to the complexity of the issues and the recent breakdown in trust, many felt that it will not be possible to resolve this to all parties’ satisfaction by February 15. A number of home owners expressed interest in a process that was collaborative with the marina owners over the next year.
- Many floating home owners are willing to amend vacancy control, if the amendments provided for a limited and predictable increase in the berth rate, and that there is clarity that marina owners cannot introduce new fees or increase ancillary fees unilaterally.
- Floating home owners oppose a provision that allows marina owners to raise rental fees to “market rate”. There is not a market in lease rates for floating homes, and there is no transparency in berth rates now. With no limitations or constraints, marina owners could raise lease fees to a level where we would be unable to sell our floating homes. This concern is reinforced by some examples of high berth increases shortly before the passage of AB252. For example, here are 3 examples of berth fee increases in the 2 years before AB252:
- $900 to $1,300 – 44%
- $1,000 to $2,300 – 130%
- $1,400 to $2,430 – 74%
- There is concern about a current lack of transparency in how fees and rents are assessed. It feels arbitrary. Overall, floating home owners want a transparent system of setting lease rates and some limits as to how much lease rates can be raised.
- Lease rates should be based on some formula or algorithm that is known to all.
- Homeowners want transparency. Some floating home owners are skeptical that the elimination of the AB252 protections is necessary for marina owners to continue to invest in the docks.
- There should be protections against unexpected fees being added to leases, either at renewal or through “rules and regulations”. We believe that we are currently being assessed fees that are not permitted under the FHRL. These need to be fixed.
- Protections should pass on to heirs.
- 10 year+ leases are critical.
- Marina owners should be accountable to fulfill their duties under the lease, particularly as it pertains to maintenance of the docks.
- Floating home owners want marinas to remain financially viable.
- Back of the envelope calculations suggest that marina owners are doing very well financially. If they want to amend the legislation due to financial impacts, they should be willing to be transparent about the financial harm caused.
- Floating home owners want more clarity on capital expenditures. The docks will be impacted by sea level rise, and we need a way to address this that works for both marina owners and floating home owners.
- The docks will need to make investments to deal with sea level rise. Both homeowners and marina owners want this to happen.
- What capital expenditures can be passed on? There should be transparency in the amount and nature of the capital expenditures passed on to homeowners. It is not right that these capital expenses are passed on to homeowners without any input.
- Capital investments should either be on the marina owner, or, in some cases shared. It shouldn’t be on just the homeowners.
- Floating home owners need some protection against the amount of capital expenditure passed through.
- There should be an incentive for the marina owners to seek grants, rather than default to having homeowners pay.
- Homeowners shouldn’t be priced out of homes to finance capital investments. And homeowners shouldn’t be charged for any capital investment without a transparent process that confirms the investment is happening at the level projected (for example, currently, there is a “climate change fee” being assessed, even though there is no active or planned climate mitigation project happening).