In 2023, Connecticut passed a law that gave manufactured home park residents new opportunities to purchase their parks, but the first test case of this law in Danbury has left residents wondering if the owner of their park found a loophole in state regulations.
The law requires that when mobile or manufactured home park owners list their properties for sale, they notify the residents. The residents then have the opportunity to form a homeowners association and purchase the park.
The association has the right to match existing offers and negotiate with the park owner to find mutually beneficial terms. If the owner finds another buyer, residents are supposed to be given the opportunity to match any substantially different offers.
The Shady Acres Mobile Home Park in Danbury went up for sale late last year, triggering the start of this process. Residents formed a homeowners association and made plans to purchase the property from owner Cajo LLC, but the deal fell through after inspections showed serious problems with water waste disposal systems that would be expensive to fix.
Months later, a new property management company, Cornell Communities, took over, surprising residents and leaving them wondering under what terms the new company came into the picture.
That lack of certainty has left residents questioning whether Cornell Communities has financial stake in the property in a deal that wasn’t offered to the homeowners association.
When it went on the market, Shady Acres became the first park to be put up for sale in Connecticut since the 2023 law passed, according to housing advocates. The new regulations aimed to provide a remedy to manufactured home park residents whose rents were rising as large companies bought their properties.
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In the Shady Acres case, Cornell Communities announced themselves as the new “legal operator and manager” in June.
Town land records don’t show a change in ownership for the property. But residents wonder whether Cornell and Cajo entered into some kind of shared ownership agreement that wasn’t offered to the homeowners association. This could give Cornell Communities a chance to purchase the property outright down the line.
Neither Cajo LLC nor Cornell Communities returned requests for comment.
Advocates fear that the transaction — with all its confusion — sets a bad precedent for future use of the law. They’ve complained to State Attorney General William Tong, and his office is looking into the issue, although a spokesman stopped short of calling it an official investigation.
“The way they’re saying things has us scratching our heads, going, ‘This doesn’t add up.’ It’s too coincidental,” said Erik Toto, a longtime resident and the president of the Shady Acres homeowners association.
Shady Acres
Toto has lived at Shady Acres for about 11 years. He and his partner thought it would be a good way to avoid ever-increasing rents. They planned to live there for three to five years, but when they started looking for a new place, they couldn’t find a better deal.
So, they stayed. They remained there through the pandemic, and through Toto’s partner’s death last year. Now, Toto lives there with their dog and cat.
He’s made improvements to the place over the years, adding in landscaping and a wooden trellis. But the land rent has gone steadily up, and when the place went up for sale, he knew he wanted to work on buying it.
“That’s the whole point of a mobile park is to keep it affordable housing, which there is a short supply of in this country,” Toto said.
The Shady Acres Mobile Home Park in Danbury. Credit: Shahrzad Rasekh / CT Mirror
He worked with professional organizers to establish a homeowners association. It wasn’t an easy process, especially because the sale announcement came at the end of the year, around the holidays.
Nora Gosselin, a cooperative housing specialist with the Cooperative Development Institute in Washington, D.C., started working with residents in January. The organization provides technical support to residents who are trying to purchase their mobile home parks across the country.
She helped connect them with lenders and people who could inspect the park’s infrastructure.
They also had support from Dave Delohery, president of the Connecticut Manufactured Homeowner’s Alliance. Delohery said his group is particularly concerned about this sale because it was the first in Connecticut since the state legislature passed last year’s law.
After the residents had identified where they would get the loan to purchase the park, they got an inspection of the property. The inspection revealed deep-set problems at the park, particularly with the waste disposal system.
The homes have septic tanks, and those tanks are aging. Inspectors said they’d need to be upgraded with double-walled tanks, and that the soil around the homes was polluted with petroleum. The report, reviewed by The Connecticut Mirror, recommended removing the polluted soil.
An inspection also found problems with several of the buildings and the infrastructure. It said the septic systems were nearing the end of their useful life.
There were also issues with deferred maintenance on the water system, electrical system, retaining walls, oil tanks and the common-area buildings. The inspector’s report said the infrastructure would need replacement or substantial repair, and estimated the cost between about $2 million and $2.5 million.
The problems were substantial enough that in June, the Connecticut Department of Energy and Environmental Protection sent a letter to Cajo declaring the property noncompliant with the law. DEEP also said that the company “is currently discharging domestic sewage to the groundwaters of the state of Connecticut without a permit.”
That puts the owner at risk of civil penalties, according to the letter from DEEP.
The department’s UIC Permitting, Compliance, and Enforcement Program investigates water quality complaints regarding commercial, household and other subsurface sewage disposal systems provided they have an average daily flow greater than 7,500 gallons per day.
“On August 1, 2024, the facility submitted a registration for permit coverage under the General Permit to Discharge from Subsurface Disposal System,” said James Fowler, a DEEP spokesman, in an email. “The registration is currently under technical review by DEEP staff.”
The residents weren’t able to get a loan that exceeded the amount the property was worth, and they decided to send in a lower offer to accommodate for the cost of repairs, Gosselin and Toto said.
Cajo didn’t accept that offer, and soon after, the new company announced that they were the legal operators, Toto said.
“By the end of April, negotiations pretty much failed with the owner,” Toto said. “We’re like, look, we can only get financing for what it appraised for maybe a little bit more than that, but that’s not going to cover what we need.”
He said they tried a couple of different avenues, including inquiring about a partial ownership structure, but it didn’t work.
Gosselin said it’s getting more common nationwide to see large investment firms buying manufactured home properties, which can make it more difficult for residents to purchase their properties.
“More and more often the buyers, it’s not like mom and pop, it’s not like local families,” Gosselin said. “It is very commonly the larger players — private equity firms, real estate investment trusts.”
But, she added, there can be benefits for the community when residents own their properties.
“Resident groups are only interested in that community,” she said. “They’re not doing it for their balance sheet or their shareholders, they’re doing it to protect where they’re situated, their homes.”
State law
A few states across the country have considered or implemented similar laws to Connecticut’s. Massachusetts has had one for years. Gosselin said some of the implementation came down to the state attorney general making a decision or testing some aspects in courts. It’s likely there will be hiccups as Connecticut’s is implemented, she said.
“I think it’s a good law,” she said of the state’s measure. “How it plays out and how it’s enforced is a challenge in every state it’s new in.”
Shady Acres Mobile Home Park in Danbury. Credit: Shahrzad Rasekh / CT Mirror
Asked for comment about the residents’ concerns, the Connecticut Department of Housing answered broadly, clarifying that the law “establishes notice requirements and sets up an opportunity for residents to form an association and pursue purchase.”
DOH spokesperson Maribel La Luz said concerns might be better directed to the Department of Consumer Protection.
“We receive the Notice, and if a resident association forms, both DOH and CHFA are required to assist that association in identifying potential financial resources for acquisition,” La Luz said in an emailed statement, referring to the housing department and the Connecticut Housing Finance Authority. “We don’t have a role until the association is formed.”
La Luz said the Shady Acres group didn’t alert the agency that they’d formed an association.
Local officials said they’re also unsure about what happened with the transaction.
Mayor Roberto Alves said he met with the residents to talk about what could be done for their sewage problems. He said the city is discussing the best ways to update a lot of its infrastructure.
Councilman Ben Chianese said he met with residents and has been working on the issue, although he’s not sure what the city can do. He said he’d prefer that the residents own the property.
“We basically told those residents that we were concerned about what they were telling us and we were going to help them in any way possible regarding the situation,” Chianese said. “Their biggest fear is being priced out of their homes. That’s a concern to us, to the city. We definitely don’t want our residents priced out of their homes.”
He added that residents aren’t sure if there was some sort of merger or what kind of arrangement the new company struck with Cajo.
“We just don’t know,” he said. “The transparency is just not where the residents would like it to be.”