Land lease verses owning the land. (mortgage, home equity loan, relocating)

[Honeycrisp]

Speaking for myself, this was a very interesting thread as I was not real familiar w/ it and I appreciate everyone's input on landleasing - everyone has their own opinions and it's good to hear all sides - no one knows what the future may bring and it's very scary to think there could be another PNets out there (anywhere, in or out of DE) - forewarned is forearmed - it's definitely a 'must read' for anyone considering relocating where LL is an option - thanks all, have a great day (moms and non-moms alike)

[Summering]

Originally Posted by Honeycrisp

Speaking for myself, this was a very interesting thread as I was not real familiar w/ it and I appreciate everyone's input on landleasing - everyone has their own opinions and it's good to hear all sides - no one knows what the future may bring and it's very scary to think there could be another PNets out there (anywhere, in or out of DE) - forewarned is forearmed - it's definitely a 'must read' for anyone considering relocating where LL is an option - thanks all, have a great day (moms and non-moms alike)

This was a wonderful Mothers Day........The babies first steps, the Moms all in the Hot Tub while the men cooked The little fellows having a grand time in the Hot Tub too.........I hope everyone had a great and rewarding day.

Honeycrisp, I agree with you.......this is a very interesting thread, it is good to hear all sides, and we sure don't want another future PNets. The entire point is to make everyone aware of the Pros and Cons before they make such an important decision. All those little hidden clauses.......and some things you just don't think about. Isn't it great you called this a "must read" ........that is what CD is for. Good solid information........ Thanks

[rdlr]

Originally Posted by Summering

The entire point is to make everyone aware of the Pros and Cons before they make such an important decision. All those little hidden clauses.......and some things you just don't think about. Isn't it great you called this a "must read" ........that is what CD is for. Good solid information........ Thanks

This is such a fluid subject in Legislative Hall. I saw a post in Delaware Watch (March 1, 2008) by Representative John Kowalko, Delaware's 24th District about the Manufactured Housing Bills Debate. He has a hard-nosed opinion regarding this subject, and went so far as to say HB258 allows landlords to continue to raise rents yearly on lots, up to the percentage amount of the Consumer Price Index without question. If the landlord wishes to raise rents more than that for justificable reasons, he says, such as amenity improvments or other, they are permitted to raise those rents MORE than the CPI index, according to HB258. If anyone wants or needs a copy of Rep. Kowalko's thoughts, PM me.

[Summering]

Delly, you are a asset to CD with your detailed information. Just wonderful. I think that
"justifiable reasons clause" is what gives the landlord free rein on what they wish to charge. At the community I lived at ( owned land )would do assessments for big improvements. You might open up your mail to a few thousands to fix the sewer system, roads, or water supply. My daughter was lucky once in a condo assessment, she carried insurance to cover any that might pop up, and a big roof inprovement did.

[rdlr]

Thank you, Summering. But, most locals I know are savvy when it comes to the, real, up-to-the-minute goings on in the State, not just the written laws which are ever-changing, as you know. I drop by Legislative Hall whenever I choose, which is often. And, with Delaware being so small, Legislators are very accessible, and we know one another on a first name basis. Laws are important, and they affect us all. What better way to become educated regarding each of our welfares, then to take the initiative to learn?

The leased land and cap rate controversy has been going on for awhile now, with no guarantee that those lessees will not be taken advantage of. These agents only tell what they want the lessee to know, and they paint a rosy picture. I guess they're doing a good job, because they appear to be believable.

I'm looking forward to tapping Roc's local knowledge regarding this subject, also.

[Sue&Fabe]

Originally Posted by CMTAD

I also asked about the land lease cap. Although I have not read through the entire agreement yet, I thought that the representative said it was a 4.5% annual cap on the "monthly" costs for a 25 year period. That's not bad! There are, of course, always special assessments, like any land-lease, cooperative, condominium, etc. This is when there is a special need, for example, a need to replace the entire swimming pool, that is unforeseen. The cost of the unforeseen is generally spread over all the residents over a period of time. At Nobles Pond, there is a fund established with money paid up front that is held for these contingencies. That's also a good thing.

Charley, is the 4.5% compounded every year? In other words, is the yearly increase on top of the prior year's increase? If it is, starting at $400/mo or $4800/year, by the 10th year the yearly fee is $7133.00! Can that be right??


By the way, I am finding all the strings regarding 55+ communities VERY helpful. Thank you all for your input.

Susan

[rdlr]

Here is how Representative Kowalko from the State of Delaware interprets this bill:
"they are permitted to raise those rents more than the CPI index. In fact, if a landlord is making an obscene profit and still chooses to raise his rents at or below the CPI index level he is not precluded from doing that by anything in HB 258 ( unless his/her own moral conscience interferes). Unfortunately HB 258 was stricken by its sponsor before there was any opportunity to debate it on the House floor."

[Charley]

Originally Posted by Sue&Fabe

Charley, is the 4.5% compounded every year? In other words, is the yearly increase on top of the prior year's increase? If it is, starting at $400/mo or $4800/year, by the 10th year the yearly fee is $7133.00! Can that be right?? Susan

That is correct. I'm not 100% sure but I believe someone recently quoted that the cap at Nobles Pond will be 4.9%. Other communities data will be different.

Compounding works in our favor when it's for bank accounts, when 4.5% over ten years multiplies beatifully. Sadly, it also works against us for things like taxes, land lease fees, etc.

Charley

[Summering]

Originally Posted by Delly

Here is how Representative Kowalko from the State of Delaware interprets this bill:
"they are permitted to raise those rents more than the CPI index. In fact, if a landlord is making an obscene profit and still chooses to raise his rents at or below the CPI index level he is not precluded from doing that by anything in HB 258 ( unless his/her own moral conscience interferes). Unfortunately HB 258 was stricken by its sponsor before there was any opportunity to debate it on the House floor."

Delly......I still am in amazement of your knowledge. I so stay out of government issues........but now, I feel like it is so completely important.
This is what I was trying to explain in laymans terms, and its so much beter with the actual facts! Thanks again.

[rdlr]

Thanks again, Summering! I think it's important to investigate these laws, bills, and what the law makers are doing, whether it be in regard to House/Senate Bills on land lease, or any other current issue which, inevitably, will affect the citizens of Delaware, and those considering the move. If all of these posts can help one person make the right decision for him/herself, I'm willing to take the time to put out there what I know to be fact, rather than what developers/sales people promise.