Mobile Home Condo Pioneers Mark 1st Anniversary

The mobile home park where Hyman Weintraub lives appears unassuming enough. The 29 units--”tin cans,” Weintraub calls them--perch on a cliff overlooking the sea in Pacific Palisades near two similar parks.

The sign at the entrance says merely: Malibu Village Mobile Home Estates.

But these days, the park is legally known as the Malibu Village Mobile Home Condominium.

And that change establishes the residents as pioneers.

In a traditional mobile home park, each resident owns his mobile home but rents the property on which it sits. But Malibu Village is owned by the residents. A year ago, they bought their 6.25-acre park from their landlord, Standard Investment Co.

On Saturday, Weintraub planned to join his neighbors at a luncheon celebrating the anniversary of their assumption of ownership. The deeds to their property were recorded Dec. 17, 1984--after five years of negotiations and an expenditure of more than $2 million.

Residents paid between $60,000 and $90,000 for their condos. For Weintraub, that means his monthly payments rose from $365 for rent to $595 for the mortgage and his maintenance fees.

But now he has tax advantages he did not have before. And most of all, “now we have control,” he said. “I think the only way mobile home parks will survive is if all mobile home tenants become their own landlords. And it can be done.”

A tenant purchase of a mobile home park is a rare occurrence. Less than a half-dozen of the hundreds of parks in Los Angeles County are owned by the residents.

And Malibu Village can apparently claim another distinction: It is the first mobile home park in the county to be converted to a condominium, according to conversion experts and officials of the state Department of Real Estate.

They predict that condominium conversion, which can have financial advantages over co-operatives, will become an increasingly popular form of tenant ownership for local mobile home parks.

Over the last decade, inflation has put many of the state’s 1 million mobile home dwellers--most of them elderly and on fixed incomes--in precarious circumstances.

As property values escalated in the 1970s, some residents found themselves unable to keep up with soaring rents in the parks. Others were evicted when park owners decided to use the property for more profitable ventures, such as construction of offices or town houses.

The Los Angeles rent control law protected Malibu Village from dramatic increases. But the park owner was so angered by passage of the law in 1979 that he decided to get out of the mobile home park business.

He told the tenants to leave by March 1, 1980.

Instead, the neighbors banded together to fight the eviction notices, the skepticism of city and state bureaucrats and the idiosyncrasies of condo conversion law, which requires that all units be under one roof.

They were represented by Weintraub, a 68-year-old retired labor negotiator with a swept-back mane of gray hair who had moved to the park in 1976. He was the tenants’ association president. “This became my full-time job,” he said.

These days, the once-united residents sometimes argue. They find themselves embroiled in typical condo squabbles: How much should be spent on new carpet in the clubhouse, should the driveway be repaved?

“We are learning the perils of democracy,” Weintraub said. He doesn’t seem to mind.

He believes that a condo conversion was the only way the residents could have stayed in their oceanfront homes with the prospect of recouping their investments should they ever want to leave.

In other parts of the state, such as Riverside County, it is possible to subdivide a park so that each resident can buy his mobile home lot separately. Los Angeles zoning law, however, prohibits such small lots.

Co-Op Considered

Originally, Malibu Village residents considered forming a co-operative. The co-op would own the property, and each resident would be a shareholder.

“I had come up with the idea of buying it for cash,” Weintraub said. “I just thought in terms of tenants buying an apartment building, like a co-op in New York. There aren’t many here, but you hear about it from relatives, friends.”

Since then, at least one other park in the county, in Bell Gardens, has formed a co-op.

Co-op associations can qualify for loans more easily than individuals can for the initial purchase from the landlord. But because co-op residents own shares, not property, a shareholder might have a problem if he wants to move away because the transaction is “not as attractive to title companies and lenders,” said Robert Gilmore, a manager in the Southern California headquarters of the state Department of Real Estate.

A prospective buyer might have trouble getting a loan, Gilmore said.

Same Advice

Malibu Village residents received the same advice from their consultant, attorney Herbert Strickstein, who has worked with both types of conversions.

At first, Lawrence Kates, a partner in the company that owned the park, did not want to deal with his tenants. He told an interviewer in 1982 that his initial inclination had been to develop the mobile home park as private housing. “If we only put up four houses in this location, in the Pacific Palisades with a magnificent view of the ocean, we probably could have made more money,” he said.

The result in the park was panic. But the tenants staved off the evictions with a lawsuit in Los Angeles County Superior Court.

“He realized we could tie him up in court for years more,” Weintraub said.

So one day, when Weintraub asked once more for a purchase price, Kates had an answer. The figure--$2 million--was scary to a group on fixed incomes.

No Down Payment

“However, the terms were very interesting,” Weintraub said. Kates offered to provide the initial financing, with no down payment and interest payments of 7% the first year. The interest rate would increase by 1% until it reached 10%. After the eighth year, the balance would be due, and the residents could refinance the park.

Weintraub took the proposal to the tenants’ association. Unanimously, the residents approved the deal.

“From then on, the fight was not us against the landlord,” Weintraub said. The residents had to get permission for the conversion from the Planning Commission, from the state Real Estate Department, and, because of the park’s location, from the California Coastal Commission.

To get approval, they had to convince the various bureaucracies that the transaction was legal.

It took a metal file cabinet with 30 tiny drawers to convince the authorities that Malibu Village could indeed go condo.

Strickstein explained: “A condominium owner gets the title to a space within a building together with an interest in the common areas. The mobile homes by definition are mobile. You can’t have space within something that’s mobile.

“So I went to the title company. I said, ‘Do you care how big or small the space within a building is?’ And they said, ‘No.’ ”

Technically, then, Strickstein argued, a file cabinet in the Malibu Village lounge could become the condominium. Each owner would get the space inside a drawer. And with that space would come ownership of the air rights above a mobile home lot and an interest in the land and recreation facilities.

Last Step

One by one, the various government panels agreed. Though the park began operating as a condo with the title change last December, the last step was Real Estate Department approval in March.

For other parks, such contortions will not be necessary. A change in state law effective next month will eliminate the need for one roof over the dwelling units.

“In the future, that will make it easier to convert, and I expect we’ll see more of these,” said Gilmore of the Real Estate Department. “We’ve been getting a lot of inquiries.”

Already, Weintraub said, the Malibu Village experiment has been successful for several residents who sold their “condos” at a slight profit.

Even Kates, the former landlord, apparently believes the units are a good investment. He owns five of them.