Exploring the Concept of an RV Park Lease Agreement
Lease agreements or lot rental agreements are usually entered into between the park owner and the tenant on or before the tenant moves into the park. RV park lessee may also be subjected to the park rules and regulations.
In an RV park, a lease agreement is a contract (either oral, implied or written) which covenants and conditions (promises) between the parties are made and all provisions of the RV park rules and regulations are incorporated therein by reference. It is very important that the lease agreement does not conflict with the laws, and specifically the Arizona Mobile Home Park Residential Landlord and Tenant Act ("Land Lord Act"). If it does, the law controls.
The park owner leases a lot or space , located within the park with certain rights and obligations. The term of the lease is the time in which the tenant can enjoy the use and possession of the lot or space while complying with the covenants and conditions of the lease. The lease term is typically governed by either an annual rental rate or monthly rental rate. Please understand that there are other types of leases, including oral leases and leases that are terminated within one year, which might not be governed by the law, and specifically the Land Lord Act. Generally speaking, unless leased on a month-to-month basis, an RV park lease is for an indefinite duration (even though the term may be specified) and terminates in the event the tenant breaches their obligations or upon termination of the lease, which could be due to the park’s closure.
The type of lease that you may have will determine your rights, obligations and remedies afforded to you. Therefore, it is very important to know the type of lease you have.
Essential Elements of an RV Lease Agreement
Lease Term: This is the period of time that the lessee has the right to occupy the space. The term can be for a specified period, such as one year, or for as long as the lessee pays rent and otherwise abides by the lease terms. The lease may then automatically renew at the end of the term unless the owner or lessee opts not to renew.
Rental Fees: Most commonly, rental fees are based on an annual charge, paid in monthly or quarterly installments. Careful attention to the billing dates for rental payments is critical to the enforcement of the lease. In the event of a rental payment default, many RV Lease Agreements include an express provision that the owner may terminate the lease upon thirty (30) days written notice to the lessee or their assign. Upon the default and the giving of such notice by the owner to which the lessee fails to respond by vacating the space within the thirty (30) day notice period, the owner may terminate the lease and order the removal of the lessee.
Occupant Liability: Similar to commercial RE lean agreements, many RV Lease Agreements contain provisions requiring occupants to indemnify and hold harmless the owner from any suit brought against the owner arising from the occupant’s use of the space that may result in injury to a third party. For example, if the lessee enters into a lease with a third party for such person to occupy the leased space, the lease could provide that any claim made against the owner by the third party arising from such occupation would be subject to this indemnification. In most cases, the person occupying the lease space would be covered under the lessee’s liability insurance policy.
Comparing Short-Term and Long-Term RV Leases
Short-Term and Long-Term Leases – What’s the Difference for RV Park Owners and Tenants?
As with any lease agreement, there are many options to consider when it comes to RV park lease agreements for both short-term and long-term stay. While the advantages of short-term agreements are probably obvious, they are not necessarily the reason the majority of RV parks are moving toward the long-term variety; namely less liability and increased stability now that the population is not moving every few weeks.
There are two types of RV park leases to consider: For the most part, these two categories are self-explanatory, but they do offer some significant advantages and disadvantages to both the RV park owner and the tenant.
Short-Term Leases Short-term leases are designed for people that want a mobile lifestyle. They like to move every few weeks, want some amenities around them, but don’t require the long-term commitment of a mobile home lot or full-blown home.
While most of the price scheme is up to the individual RV park owner, this is the type of lease that is traditionally used at state parks and most campgrounds. The idea is for you to move your RV to the site of your choice and pay a set fee to stay there, just as you would at a traditional hotel.
That fee normally includes water and other utilities, but renting the space for a month or two is quite simply going to be more expensive than paying for the entire length of your stay up front.
Advantages for RV Park Owners People that have stayed at the same place for years are often willing to do most of the work themselves. They can be a bit more like a tenant you would find for a rental house. Tenant obligations usually cover: This means fewer worries for the park owner, and some people are even willing to pay more than their fair share when they rent an RV spot because they know they will be using it more than a couple of weeks a year.
Advantages for Tenants People that like short-term RV park leases enjoy the freedom of being able to get up and move their home just about anywhere and anytime they like. This means that they don’t like to make formal agreements.
The flexibility that makes RV park tourism so much fun is also one of the hardest things on which to plan. One month can easily turn into two and vice versa, so searching out an inexpensive long-term RV park lease is never easy.
Traditional RV and tent campers that—for the most part—keep to themselves are now being joined by people that actually live in their RVs around the clock. This is something that nixes the possibility of a month-to-month agreement since the spot is now taken. Even if the tenant leaves after a few months, the RV park owner is not guaranteed to find a regular tourist that wants to pay $100 or more per night for the space.
Long-Term Leases These leasing agreements are either month-to-month or year-to-year. They mean someone wants a longer commitment than a few nights or weeks. This generally means that those people want to actually call this place home—at least for a season—and are giving you the time to legally kick them out with a 30-day eviction notice or similar agreement.
They are your best option if you want to run an RV park where people stay for long periods of time and treat it more like a traditional home rather than a mobile space.
Advantages for RV Park Owners In addition to stability, the prices and terms of RV park leases for long-term customers can be much higher than the short-term variety. This means the income generated from such a park is often significantly higher than the short-term option. The exact price range depends on whether the RV space/manufactured home park falls within the boundaries of a major city. They are generally:
Because the rent is higher, tenants are obviously responsible for either more of the utilities or those added amenities that come with a more permanent space.
Advantages for Tenants These agreements are still supposed to be month-to-month or year-to-year just like the short-term RV park lease option, but the landlord has to agree to the terms of this more expensive deal. They have the legal option of holding the tenant to their verbal or non-verbal agreement, but they can also evict the person for lack of rent like regular tenants of a mobile home or apartment.
Unlike the short-term RV park lease, this price is more in line with area hotels and traditional rentals because of the amenities and use restrictions. You still have an RV in most cases, but you have the option of treating it as home for a few years.
It’s also important to note the increased tax liability that comes with the long-term RV park lease agreement.
Legal Aspects and Tenant Responsibilities
In the realm of RV park lease agreements, it is imperative that both the park owner and the tenant abide by their respective legal obligations. As the owner, there are written disclosures that are required to be made at the time of tenancy involving legal compliance with such matters as zoning, service availability, and financial disclosures, among others. As discussed above, many states have adopted some version of a Uniform Vacant Site Act (VSA) or similar legislation with regard to property disclosures and other legal considerations. Compliance with these laws is essential, and most state statutes allow for significant tenant remedies in the event these disclosures are not made, or not made properly.
Zoning Regulations: The RV park owner must ensure that his park is zoned for the type of use allowed. A park that has been legally established pursuant to a valid zoning ordinance may be ‘legal non-conforming’, meaning that though the park does not conform to the controlling zoning provisions, the park may continue in existence if certain legal conditions are satisfied. The owner should ensure that the park’s established non-conforming status will not change, assuring that he is not operating an illegal non-conforming use.
Tenant Rights: While the tenant has rights with respect to the real estate involved, including but not limited to the right to maintain his occupancy until lawfully evicted, he also has other rights and responsibilities not shared by conventional long-term tenants. For example, some states, such as Florida, include an ‘implied warranty of habitability’ applicable to those living in recreational parks, although this issue remains an active point of contention in the state’s appeals courts. The nature of the relationship between the parties is commonly that of landlord-tenant, although in RV park leases, the distinction as to the right of possession must be made clear to avoid confusion. Failure to do so will allow the tenant the ability to claim a homestead. Even with confusion regarding the status of the tenancy, courts may still rule against the park owner in a case in which a statute or ordinance had been violated.
Common Provisions and Their Importance
Most RV park lease agreements will include various types of clauses that address many different issues and try to protect the parties’ interests. There are clauses that protect the landlord from certain actions of the leased RV, like usage restrictions as to certain items (chickens, illegal activity, fireworks) or hours of operation. Sometimes there are clauses that include specific prohibitions as to visiting guests by others or even the Tenant themselves, such as prohibiting anyone under the age of 16 or 18 from spending the night unless the Tenant is present.
Other clauses may specifically set out certain remedies to be attempted before any other action, such as imposing a late fee for each month payment is not made, require attempted eviction through the courts before locking the Tenant out, or giving the tenant the right to switch lots is an alternative lot is available .
Most state statutes will have laws that set out landlord/tenant procedures for what happens in the event of a complaint, but it is always better to spell those out in the lease so that both parties have notice and set expectations to what procedures should be followed, such as notice requirements, time frame and the potential opportunity of mediation.
Dispute resolution clauses are fairly common and can either try to avoid litigation if possible or provide for expedited procedures in the event one party brings a lawsuit against the other such as offering mediation or requiring binding arbitration. Another common clause is the entire agreement clause, which states that there are no oral agreements, side agreements, or understandings that have not been included in the lease and that the lease sets out the entire agreement between the parties.
Strategies for Negotiating an RV Lease Agreement
Effective negotiation of an RV park lease will go a long way toward helping the parties have a great experience over the life of the lease. Below is some practical tips for both tenant and RV park owner on how to approach the negotiation of an RV lease.
Approach the negotiation as if you are undertaking a long-term relationship and not as a transaction. Maintaining the right mindset can help guide you throughout the negotiation all the way to closing. While lease negotiations in any context can become tense, it is best to head into the process with the idea that you will be working with the other side on an ongoing basis. From this perspective, it makes sense to enter negotiations with the intention of spending time discussing each party’s concerns and carefully reviewing each term in the lease.
Keep a close eye out for ambiguous language and unusual terms. Careful attention during negotiations can help each party identify potentially problematic lease language or terms that may have been included in the lease inadvertently. Be on the lookout for definitions or explanations of terms and phrases that seem out of context or are otherwise unclear. Be particularly concerned about vague or undefined terms that may mean different things to each party. It is also important to ask questions if phrases or terms are unfamiliar.
Put emotion aside and focus on the commercial realities of the lease. While emotion can be an important part of real property transactions, it can be helpful to be pragmatic during the negotiation process in order to keep the transaction moving toward closing. While it may be frustrating if certain terms are difficult to agree upon, it is important to compartmentalize and try to keep emotions out of the negotiation process. Keeping the commercial goal of the lease in mind can help guide parties toward reaching agreement and avoiding frustration.
Examine all relevant supporting documentation. In addition to the written lease, the other documents may be relevant to the entire transaction. These documents can include the party’s proposal letter, offers and counteroffers, and the lease exhibits, drafts, and addendums. Examining supporting documentation can help parties understand the lease’s context and can provide helpful perspective during the negotiation process.
Consider whether the proposed lease is a fair deal for both parties. Are the terms clearly advantageous for one party or the other? Each party should be able to explain the benefits and disadvantages that they will encounter in accepting the lease terms. If the lease terms are heavily slanted toward the advantage of one party, they will likely sense the unfairness and become resentful about the agreement. In this scenario, it is only a matter of time before the RV park tenant or owner will seek out another property or tenant to lease to.
Don’t focus on making a perfect deal. Negotiations can stall when parties become overly concerned with securing a "perfect deal." It is important to carefully review the lease terms, but it is equally important to realize how the terms compare to industry standards. Otherwise, all of the parties’ time and effort may go to waste, resulting in a failed lease negotiation.
Common Mistakes and How to Prevent Them
An RV park lease agreement that seems straightforward in its language can create problems that can plague you for years if you do not fully understand its provisions. For example, trying to maintain the park at the level the park owner/lessor created or intended because there is no performance standard set forth in the lease agreement. Is it the park owner/lessor’s intent that the RV park be maintained the same as a 5-Star Campground or your suburban neighborhood? Probably not, but because the lease agreement does not set forth that standard, you are stuck doing what everyone and anyone thinks the standard should be.
Another potential pitfall is assuming that the rent will not be increased until the term of the lease expires. A large RV park owner recently sued a tenant RV park owner for millions of dollars arguing that under the language of the lease, the park owner could once again raise the rent every year. Our client looked at the language and it appeared to be clear, that the new rent to be paid was fixed for the term of the lease. We went further and had a conversation with the park owner’s representative. The representative told us they understood our position and the new rent would not be increased at least until the term expired. The suit dropped and the issue appeared to be resolved, but without the satisfaction of knowing it would not likely rear its ugly head once again. The lesson learned here is do not assume that the language of a lease agreement that appears clear and unambiguous cannot be modified during the term of the lease. You need to confirm with the other party that each party has the same understanding and that understanding is memorialized in writing as an amendment to the lease agreement.
Others have had situations where premiums to be charged for the RV lots in the park are modified, usually upward, each year. Some RV park owners simply raise the rent every year, even though the lease does not allow for any changes until the term of the lease expires. Others have experienced small increases every year but at some point, the increase becomes excessive. Discussing the issue with your landlord/lessor may provide an opportunity to have a "one-time" increase to reduce what you consider to be an excessive total increase. This may enable you to renegotiate the rent for the remainder of the term of the lease.
Some RV park owners have not provided the RV park owner with the information needed to adjust the lease payments. This will result in lawful rent increases that create an agreement that you may not be able to live with. It is important that you understand what information is needed for the RV park owner to apply to increase the RV park lot rents over the lease term and then to set the rate at the appropriate time.
Because their appearance suggests they are simplistic, some people tend to rush through lease agreements. Doing so, however, can create problems down the road from which it may be difficult to escape.
Finalizing the Agreement and Moving into your RV
Prior to moving in to the RV park it is important to do the following:
- Thoroughly inspect the RV prior to finalizing the lease agreement with the RV park – Just as you would check an apartment thoroughly or a mobile home prior to signing a lease, you want to make sure that it is in good condition. Ensure that all appliances work, that all the windows close, and that the space is in good overall shape.
- Review all documents related to the lease and the park thoroughly before signing – Many RV parks have a great deal of information concerning their practices, rules and regulations provided in writing. Make sure you are aware of all of these practices as well as the park rules so that you will know what is expected.
- Discuss when your payment will be due, what methods are acceptable for payment, and what penalties may arise if payment is not received on time – Again , understanding your obligations will allow you peace of mind ensuring that you can fully enjoy the benefits of RV living while making sure that you can go about your normal schedule and be able to pay your RV space rent on time. In addition, finding out what acceptable payment methods are is very important. Is check, money order, cash, or direct deposit acceptable? These are all questions that need to be asked before the lease is signed to ensure that you understand what to expect. It is also best to know if the lease includes any automatic payment submissions or late fees in case you fail to pay on time.
- Make sure you know how to register complaints and where to file them, if necessary – Understand what the process is if you have an issue or an emergency concerning your RV Park and know what steps to take to have the problem fixed. The best solutions are those that you know how to reach and can resolve issues with minimal hassle or down time for yourself, your family, and your RV.