WHEN AND HOW SHOULD I NOTIFY A SECURED PARTY IF A RESIDENT IS BEHIND IN RENT? WHAT IS THE SECURED PARTY’S OBLIGATION, AND DO THEY OWE FOR ANY BACK RENT?

RCW 59.20.074 governs the liability of a secured party. You should notify a secured party as soon as your tenant is delinquent in rent. In accordance with the statute, the notice must state the amount of rent and the amount and nature of any reasonable expenses that the secured party is liable for payment to the landlord. The notice must also state that the secured party will be provided a copy of the rental agreement previously signed by the tenant upon request. This notice must be mailed by certified mail, return receipt requested.

The secured party who has a right to possession (meaning a default has occurred by the tenant/borrower as defined by the applicable loan documents) is liable to the park owner for rent for occupancy of the mobile home space under the same terms the tenant was paying and any other reasonable expenses (as defined) incurred “after receipt of the notice”. In other words, the secured party is not responsible for retroactive rent owed by the tenant prior to receipt of the notice to secured party.

Be mindful that most loan documents provide that failure of the tenant/borrower to pay rent to the park owner, and/or otherwise jeopardize the loan collateral (i.e. the manufactured home), constitutes a default (abandonment of the home is also considered a default of the loan documents). If a secured part claims it does not yet have “a right to possession”, ask to see the generic loan document as you will probably be able to successfully argue that the act of not paying rent constitutes a default thereby creating “a right to possession”.