What Is Site Rent in a Manufactured Home Community?

Housing costs represent a substantial portion of many household budgets. For some, a specific type of housing expense known as site rent comes into play, particularly when the dwelling and the land it occupies are owned by different parties. This article explains site rent, its components, how it is determined, and where it typically applies.

Understanding Site Rent

Site rent, also referred to as lot rent or ground rent, is a monthly payment for the use of a specific plot of land within a community. This arrangement is common where an individual owns their manufactured home but leases the land it occupies. The payment provides the resident with the right to place their home on the property, distinguishing it from a mortgage or loan payment for the dwelling itself. Site rent covers the use of the land and often contributes to community upkeep and services.

This separation of land ownership from home ownership can offer a more affordable path to homeownership, as the upfront cost of purchasing both the home and the land is avoided. Residents secure a mortgage for the manufactured home and then pay site rent to the landowner.

Components of Site Rent

Site rent typically includes the lease for the homesite and covers access to and maintenance of community amenities, such as clubhouses, swimming pools, fitness centers, and common areas. Community maintenance, including road repairs, street lighting, landscaping, and sometimes snow removal, is often supported by site rent payments.

While some basic utilities like water, sewer, and trash collection may be included in site rent, this varies by community. Other utilities like electricity, natural gas, internet, and cable are usually the resident’s responsibility and are billed separately. Site rent does not cover mortgage or loan payments for the manufactured home, property taxes on the dwelling, or home insurance. Property taxes on the land are generally the landowner’s responsibility and may be factored into the site rent.

How Site Rent is Established

Site rent amounts are generally determined through a lease agreement between the landowner, such as a manufactured home park owner, and the resident. This agreement specifies the terms of the land rental, including the monthly rent and lease duration. Factors influencing the rent amount include market rates in the area, the specific location of the community, and the quality and range of amenities offered. The size or specific features of the rented lot can also affect the price.

Rent increases are usually governed by the terms outlined in the lease agreement and may also be subject to local regulations. Some jurisdictions may have laws that limit the percentage by which site rent can increase annually, or they may require specific notice periods for increases, often 90 days. Lease agreements might also detail how increases in property taxes or operating expenses are passed on to residents.

Where Site Rent Applies

Site rent is most commonly encountered in manufactured home communities, often referred to as mobile home parks. In these communities, residents typically own their manufactured home but lease the land from the park owner. This arrangement allows individuals to own a home without the significant investment required to purchase land. Manufactured home communities provide a structured living environment with shared facilities.

While manufactured home communities are the primary context, site rent arrangements can also be found in other specific scenarios. Long-term residents in some recreational vehicle (RV) parks may pay site rent for extended stays, particularly if their RV functions as a permanent or semi-permanent residence. Other land lease agreements for permanent structures on rented land also occur.