Perverts in the Park!? What Kind of Perverts? By Kurt D. Kelley

Rent-paying tenants that take care of their home, home site, and follow the rules are what community owners want. They are ideal tenants that are a magnet for other ideal tenants.

 But what if an otherwise model tenant is listed on the National Sex Offender Public Website? Is it a smart practice to allow this person continued residency? Here are the key things community managers should know before making this costly, important decision: 

• The National Sex Offender Registry describes the offense committed by the Sex Offender. Management should screen prospective tenants for sexual offense convictions. They should also periodically review public sex offender websites to learn whether a registered sex offender has moved into the Manufactured Home Community (MHC) without management’s knowledge. 

• Sex offenders are not a legally protected class of people, and thus denying committed sex offenders’ tenancy is legal in most circumstances. People on the sexual registry for convictions of rape, sexual assault of a minor, etc. should not be granted tenancy.

 • Leases matter. If you just bought an MHC and there is a registered sex offender in the park who is residing there under a lease, their tenancy generally must be allowed to continue for the duration of the lease. 

• MHC owners’ insurance underwriters often check to see if a particular MHC has any registered sex offenders residing in the park. If any are found in the MHC, liability coverage for Sexual Abuse and Molestation will be excluded from the MHC’s general liability insurance policy.

• Most MHC lenders require MHC owners to carry Sexual Abuse & Molestation (SAM) coverage. Presuming it’s excluded from the general liability policy, adding SAM coverage via a separate specialty insurance policy will generate a premium of $3,500 or more per $1m layer of liability coverage. With extremely rare exceptions, all excess liability policies exclude SAM coverage.

• If you are buying an MHC that has a model tenant also listed on the sex offender registry, it’s smart to investigate the specific offense committed prior to immediately starting the eviction process. If your inquiry reveals a lesser infraction, such as public urination, or statutory rape noting the registrant was 19 and his girlfriend was 17, allowing the sex offender registrant continued residency is both profitable and reasonable. Insurance underwriters will generally agree under such circumstances, too, and remove the Sexual Abuse and Molestation (SAM) coverage exclusion under these circumstances 

Most institutional MHC lenders require MHC owners to carry SAM coverage, but there are exceptions. Visit with your loan officer about the options. The MHC specialty lenders are well versed in this issue and will work with your insurance agent to generate the best loan-compliant results.