Manhattan Trailer Park Homeowners Ass’n, Inc. v. Manhattan Trailer Court & Trailer Sales, Inc., 438 N.J. Super. 185 (App. Div. 2014). The Mobile Home Protection Act, N.J.S.A. 46:8C-2 to -21, is intended to protect residents of mobile home parks against unscrupulous landords. Among the protections that the Act affords residents is a right of first refusal to acquire the “private residential leasehold community land” if the owner decides to sell the property or receives a bona fide offer to buy the property. Defendant, the owner of a mobile home park, solicited offers for the purchase of defendant’s park. As defendant did that, it also sent notices to quit to the residents of the park, advising them that the property would no longer be used as a mobile home park. The residents then formed an association, the plaintiff in this case, as is required in order for residents to exercise their rights under the Act.
Defendant received a purchase offer from a buyer (“Manhattan”) that did not include a financing contingency. The Act required that defendant notify the homeowners or their Association within ten days of receipt of the offer that an offer had been received and, thereafter, to convey the terms of the offer. Defendant did not meet the ten-day deadline. But shortly after defendant learned that the plaintiff Association had been formed, defendant transmitted to plaintiff the Manhattan offer, including an unsigned proposed sales agreement that contained the same terms as Manhattan had offered, and stated that plaintiff could buy the property on the same terms and conditions contained in the Manhattan offer. At a subsequent in-person meeting, defendant expressly told plaintiff that an offer with a financing contingency would not be acceptable, and that the “no financing contingency” aspect of Manhattan’s offer was an essential element of the deal.
Despite that advice, when plaintiff offered to buy the park, purportedly pursuant to the right of first refusal granted by the Act, its offer included a financing contingency. Defendant declined the offer, since it did not mirror the Manhattan offer. Plaintiff filed suit, seeking to enforce its right to purchase the property. The Law Division granted summary judgment to defendant. Plaintiff appealed, but the Appellate Division affirmed. Judge Lihotz wrote the panel’s opinion.
As Judge Lihotz observed, “the parties each suggest the other failed to abide by the provisions of the Act.” The Association claimed that defendant’s failure to give notice of the Manhattan offer within ten days was fatal to the proposed sale ot Manhattan. Defendant conceded that it had not met the ten-day deadline, but contended that it had cured any problem in that regard by its subsequent conduct. Moreover, defendant contended that plaintiff’s failure to mirror the Manhattan offer did not comply with the Act’s right of first refusal provision.
Given the failure of both sides to comply with the Act, Judge Lihotz stated that the court’s goal in deciding the case was to “read the statute in the way that is most consistent with the overall legislative intent.” Because these were legal issues, the Law Division’s ruling was not entitled to deference.
Judge Lihotz found that defendant indeed had not complied with the ten-day notice provision. But the Association and its members “suffered no prejudice from the delayed notification.” Defendant had served notices to quit that informed residents that the property “would cease to be used as a mobile home park and may be sold.” The Association was fully informed of the terms of the Manhattan offer, and defendant even provided a draft contract for the Association to sign if it wished to exercise its right of first refusal. Defendant acted in good faith and did not try to proceed with the Manhattan sale without first giving the Association its opportunity.
Judge Lihotz declined to accept “plaintiff’s rigid interpretation” of the Act. That view “would impinge upon the alienation rights of a private property owner, an issue subject to constitutional limitations.” Instead, the legislative intent was to require a property owner “to meet the Act’s substantive provisions and effectuate its salutary purpose.” This defendant did.
Plaintiff’s non-compliance with the Act, on the other hand, was fatal to its position. Despite having been told that the absence of a financing contingency was an essential term of the Manhattan offer, plaintiff’s purchase offer contained a financing contingency. “[T]he Act imposes no obligation to accept a materially different counterproposal.” Thus, the Association failed to exercise its right of first refusal,” and the summary judgment in favor of defendant was affirmed.