Bulletin: CO2022003

Dear Associates:

House Bill 22-1287 became effective as of October 1, 2022, and makes significant changes to the law surrounding the sale of Mobile Home Parks in Colorado.

Previously, the owner of a Mobile Home Park was required to give at least 90 days’ prior notice to the residents of a Mobile Home Park when the owner intended to sell or change the use of the Mobile Home Park. However, under the prior law, there were no consequences for failing to comply with the notice requirements and a failure to comply did not affect our ability to insure the sale of a Mobile Home Park.

House Bill 22-1287 dramatically changes the notice requirements and institutes harsh penalties for a seller’s failure to comply. Sellers are now required to give 120 days’ prior notice to residents of a Mobile Home Park and that notice period is triggered by several different events which can occur prior to the execution of a contract for sale. Notice must be provided by certified mail and by posting in a conspicuous location within the Mobile Home Park. Sellers are also required to provide notice via email to all residents of the park who are not owners of the individual units but have an email address on file with the seller.

A seller who fails to comply with the new notice provisions is subject to multiple consequences including liability for money damages payable to residents and potential fines and penalties levied by the Colorado Division of Housing. In addition, any sale conducted in violation of the new rules may be considered defective and thus render any title transferred void.

Considering the significant potential consequences for failing to comply with the new rules, the sale of a Mobile Home Park in Colorado is now considered an Extra-Hazardous Risk which always requires Underwriter approval.

In addition to Underwriter approval, in order to insure the sale of a Mobile Home Park in Colorado, Stewart Title Guaranty Company requires the following:

1. Sellers must provide a copy of the Affidavit of Compliance that the seller has or will file with the Colorado Division of Housing. A copy of the Affidavit of Compliance is attached to this Bulletin.
2. Stewart will also require all sellers of a Mobile Home Park to execute an Affidavit and Indemnity regarding their compliance with the provisions of C.R.S. § 38-12-217. If the seller is an entity, the individual member, principals or shareholders must execute the Indemnity in their individual capacity as well as on behalf of the entity. A form of the preferred Affidavit and Indemnity is also attached to this Bulletin.
3. The initial Title Commitment that is produced for the sale of a Mobile Home Park must include an Exception for “Any loss, damage, claim, or expense arising from or in connection with the failure of [seller] to comply with the provisions of C.R.S. § 38-12-217”. This Exception may be accompanied by a Note which indicates that the Exception may be deleted upon the satisfaction of the Requirements for the Affidavit of Compliance and the Seller Affidavit and Indemnity.

If your transaction will not comply with these guidelines or if you have any questions, please call a Stewart Title Guaranty Company Underwriter.

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