It’s a tragically familiar story for many Californians. You receive notice that the home you are renting has been sold and the new owners are dramatically increasing the rent, because there is no rent control and, under California law, there’s no limit on the amount rents may be increased. Property owners are protected by Prop 13. Renters have no such protection.
For most folks who cannot afford the new rent, they simply move. But what if you are a senior on a fixed income or social security? And what if you live in a mobile home park where you actually own your home, but must pay rent in the form of “lot fees”? If the new owner dramatically increases your lot fees, what are your options then?
These are the questions that hundreds of senior residents of the Rancho La Paz mobile home park in Fullerton and Anaheim are now facing. On February 28, over 380 residents of Rancho La Paz received word that the mobile home park had been sold, and the new owners were increasing rents by an average of $300 per month for residents who were paying around $680 per month—a 44 percent increase.
“Since this is a senior park and most of the seniors here live on fixed incomes this is a travesty,” said one resident of Rancho La Paz, “We have people so frightened they are talking about suicide.”
Most of the mobile home owners are on fixed incomes and over 70 years old. Some are still paying a mortgage on their mobile homes, and the lot increase puts their living expenses above what they can afford on Social Security. Residents are also still responsible for their own utilities.
According to the notice residents received, if they call a Mr. Michael Cirillo of Star Management (the property management company) there may be some assistance up to $200 for those who can’t afford the increase and qualify.
”However calls to that number have not been answered and many residents are panicking,” said one resident who lives at the park and has been trying to find help for her neighbors.
The Observer also tried to contact Mr. Cirillo and Star Management, and his various other companies including one that buys up mobile home parks across several states, and another which purchases and resells mobile homes. Observer attempts to contact Cirillo by both phone and e-mail, have received no response to date.
In desperation, one resident contacted local elected officials of both cities, and reached out to the California Mobile Home Assistance Center, and Orange County Fair Housing, among other agencies. So far only Anaheim Councilmember J. Moreno and Fullerton Councilmember Ahmad Zahra have returned the resident’s call for help saying they would look into it.
The residents are holding a meeting on the topic on March 20 at 6pm at the Rancho La Paz clubhouse.
Orange County Fair Housing, reached for comment, told the resident and the Observer that “the notice appears to comply with California’s Mobilehome Residency law. Under Civil Code §798.30 rent can be increased without limit by way of a 90-day notice, provided that any such increase is also consistent with the provisions of any fixed-term lease that may be in place. Unfortunately, without any restraints on rent increases put in place by the local government the park operators can increase rents to levels that they believe the market will bear without consideration of the ability of the current residents to pay those increased rents. Mobile homes, once thought to be a portion of the housing stock considered as affordable, are now becoming out of reach to many people in the same way as apartments and for sale properties.”
“It’s obviously a very disturbing trend in Orange County where we’re seeing significant rent increases in apartments, and now also in mobile home parks, which have traditionally been more affordable housing,” said Cesar Covarrubias, Executive Director of the Kennedy Commission, a local group that advocates for affordable housing.
According to Covarrubias, “There would have to be a local measure, or a city would have to see this as a crisis and then enact a local ordinance that would allow for some measure of control over the rents.”
Both Fullerton and Anaheim contracted with the Fair Housing Foundation in Long Beach for matters concerning fair housing. The Observer contacted that agency for a comment but did not receive a call back by press time.
The notice sent to residents claims that with the increase, the lot rents will still be “substantially below the fair market value for housing and amenities of the same quality.” A quick check of lot fees in the area found them ranging from $500 to $1,250. According to a resident with the increase the fee to rent the lot beneath their homes will cost park residents from $1,000 to over $1,500 depending on whether they live on the Anaheim or more expensive Fullerton side.
Many residents fear that they will have to sell their homes and move though selling and moving out in 90 days seems an impossible task even if they could find another affordable option in this area where but low income housing is hard to find.
However, an interested buyer is waiting in the wings. The very same Michael A. Cirillo of Star Mobilehome Park Management may be in charge of future sales of units at the park if the elderly homeowners are forced to sell. His company shares a Santa Ana address with M. A. Cirillo & Associates, and Star Mobile Home Sales Inc. All the corporations list Michael Cirillo as president. In addition, Cirillo is a partner in Pacific Current Partners LLC which buys up and operates mobile home parks in Las Vegas, Nevada, Utah, and California (where it has purchased 25 mobile home parks througout the state including Orange County cities of Anaheim and Placentia).
According to the notice from Star Management and Paracorp, LLC (the agent for the new owner Peace Ranch LLC), “We are a long-term, ‘buy and hold’ park ownership and need to increase park revenue to maintain our plan for continuation of the community.”
New owner Peace Ranch, a Limited Liability Company registered in Delaware in January 2019, but has no website. However, its agent Paracorp LLC is also the agent for a Peace Ranch LLC registered as a foreign company in 2018 with address 1830 E. Sahara Dr., Ste 114, Las Vegas, Nevada 89104.
The legality of this situation is being researched by the Observer.
The plight of the Rancho La Paz residents perhaps speaks to the larger need for rent protections in California, especially for seniors and those on fixed incomes.
At the March 18 Anaheim Council meeting, there will be a presentation and discussion regarding rising rents and affordable housing.
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Categories: Local News
I stay at one of the parks owned by mark cirillo and i was given a 60 day notice for paying my rent late by 15 days, they refused to take my money and they are creating an eviction against me, ive paid late in the past and was always charged a late fee so i dont understand whatnthe late fee was for if it still counted against me.
I wouldn’t recommend anybody to rent from star management, they have bad intentions and they are rude and show no compassion when you explain your situation to them,
Ive been working hard to sell my place at a really cheap price and they are making it impossible to sell by telling me i need to make all kinds of repairs and they should have done their part since june, im really upset and i dont recommend anybody to do business with these crooks, buying in a mobile home park should be more affordable for people that dont afford to buy a residential home, but Its clear they are taking advantage of everybody.
A stop needs to be put to this, we buy our homes in their parks and we get no respect,
Star management bought my park and is intending on renting out all the empty units, us owners weren’t told about this and this has also affected my potential sales sue to the fact that there wont be any owners pride.
Jesus words for these companies taking homes and raising rents to line their own pockets…..”They devour widows’ houses and for a show make lengthy prayers (PROFITS). These men will be punished most severely.” Mark 12:40
How about anittrust laws if they own 25 parks and they are doing this to all of the parks they purchased this is in violation of he antitrust laws. Also, how about the IRS investigating the companies involved or are they still loking for Russia and Trump connection. also if this is Foreign Owned company Pierce Ranch LLC is there a limit into how much property a foreign company can own in the US. Is there any resident that has knowledge or connections on who to contact in the government.
I live in Everett, Wa, Creekside Village Mobile Home Park. The owners just stopped paying for cable, reduced the rent $56 per month. Comcast lowest rate is $76 per month. City is installing water meters and will we have to pay our own Water and Sewer ? Unknown ???????????????
Mobile homeowners at Rancho La Paz already pay for all utilities. Here the mobile home parks are being bought by shark investors who have done the same thing in many cities. Here the rent for spaces is being increased by 55%. Many are on Social Security and the rent will now be more than they can afford.
Say your getting ready to retire, setting up your plan for possibly the last move of your life, So you go out looking at mobile homes. You talk to dealers and they tell you about all the wonderful things you will gain with a SENIOR Mobil home park. Security, limited rent increases, activities, gated park. You sell all your assets like your house, cars, possessions Buy your home, create a lot, oh yeah, its just a empty lot. You spend part of your savings to landscape, pour concrete, fences you get locked into this new groove in you life. Now this company comes in buys the whole park with no notice to you until it is to late. Raises your rent on the home, not to mention the garage. Prices you new rate at a price that for most would be hard to reach over time let alone in just a couple of months. This is or should be unheard of well not at Rancho La Paz and other parks in California. Please help us fight this ridiculous increase. This could send over 6 hundred people (seniors) to homelessness. Also the people that are in the middle, someone who makes enough to be comfortable (barely) but not low enough to qualify for subsistence. I
Same thing is happening at Capo Beach Cottages (formerly known as Palm Beach Park). It also happened at Huntington Shorecliffs. Same owners/investment company. Something has to happen to stop this!!
There is a Fullerton City Council Meeting on Tuesday 3/19/2019 at 6:30 as well. (be there at 6PM to fill out a speaker card to talk to the city council). It’s at 303 W. Commonwealth Avenue in Fullerton. This may be better for the Fullerton-side residents.
The Anaheim city council is the same day and we have representatives that will be talking at it.
Anaheim residents should come out and support them. It’s at 200 . S. Anaheim Blvd at 5:00pm
Rancho La Paz actually means Peach Ranch. Here is my thought:
Mom and Pop start a MHP called RLP. They have four kids. Mom and Pop pass away, 4 kids inherit the MHP. The park has long been paid off and has no mortgage and makes a tidy profit. How to make more money? Kids form a LLC and call it Peace Ranch and 1 & 2 sell their interest to the other two – 3 & 4. Say, the park is appraised at 40M. They get a 20M loan on the property. Now 1 & 2 each have 10M each, and 3 & 4 own a park now worth 45M due to the rent increases. Kids 1 & 2 share their 10M each with 3 & 4 and now each kid is 5M richer. 3 & 4 pay the mortgage with the rent increases.
I’ve heard a similar scenario. Interesting.
Star Management aka Pacific Current Partners
Pacific Current Partners – Executives
• Michael A. Cirillo, Partner, Property Management
• Robert S. Coldren, Partner, Senior Strategist
• Spencer Engler-Coldren, Acquisitions
• Bradley Hill, Partner, Acquisitions
• Guy Kornblum, Special Projects, Asset Manager
• Thomas Niederkofler, Partner, Business Operations
More information…
https://MHPHOA.com/sm/
Attorney, Robert Coldren- Linkedin page…look at it
What is Sherman Antitrust Law? What is targeting seniors Federal Fair housing? What is panic peddling block busting?
Who is the CA Attorney General, CA Fair Housing, CA DRE, CA Bar Association, ACLU?
Thank you so much Fullerton Observer for calling attention to this matter. I have made many phone calls regarding this. Fair Housing said “yes it is legal… and no it is not fair”. I’m so glad someone organized this meeting. Maybe we could get some news stations to be there…and bring some shame on these owners (whoever they may be).
We bought our home recently (right before the rents went up) and no one has mentioned that when the space rent is low… the homes cost more… so those of us who bought recently and paid inflated prices for our homes will never make up for that now that the space rent is so high. In other parks that have higher rent… the homes cost less….but at La Paz there were bidding wars because of the lower space rent. We were told by the office and the real estate person that the Park was “family owned” and that typical raises in rent were no higher than 5%. I feel very misled.
Already contacted GSMOL and we have had a preliminary meeting with them. They should be attending the meeting on the 20th.
You need to call GSMOL, the Golden State Manufactured-Home Owners League who have experience with these predatory park owners and managers. Phone 800-888-1727 or 714-994-9528
Paracorp (aka Parasec) is the agent for Peace Ranch LLC registered in Delaware Limited Liability company in January 2019. The company appears to have no website or other info that we could find. However, Paracorp is also the agent for a Peace Ranch LLC registered in 2018 as a foreign company with address 1830 E. Sahara Dr. Ste 114, Las Vegas Nevada, 89104. The company is a mystery and if anyone finds out something about it please send to observernews@earthlink.net
I wonder what the 45 per cent raise equates to the ROI, and what a fair ROI is.
The ROI would depend on several factors and we don’t have all the details.
As far as additional revenue this will generate would be in the 1.2 to 1.5 million dollars of additional cash flow for a park that doesn’t require any immediate improvements. The park is being quoted for solar at this time, but it is illegal to charge residents for any upgrades or repairs before they have been performed.
From what has been discussed there is a bit of a web as to who the actual owners are and who the property management is owned by. Hopefully this will be cleared up in due course. Paracorp is at the top of the list so I assume that’s why the article mentions them.
Why does the letter the new owners sent say the name of the owner is PEACE RANCH L.L.C. and this article says Paracorp L.L.C.????
And this doesn’t take in account that the Fullerton part of the park pays a higher space rent of $725 and the increase for the Fullerton side is $398 for a total $1023 not including utilities.
Please multiply $680 by 387 by 12 to see what the return on investment is currently. ($3,157,920 per year). Does see that over $3.1 million is more than enough to pay for a site manager and any maintenance needed at the mobile home park that is not already taken care of by the mobile homeowners. At the $1,000 per lot rent proposed that would be $4,664,000 per year. Either way lots of money being made. We do need rent control or serious investment in more affordable homes that are mandated to stay affordable. The recent Citrea 55-unit affordable apartment building that opened in Fullerton had 1,300 applicants. There is certainly a need.
The meeting is March 20th at 6pm.
I see both sides of it as well and understand the investor looking at his ROI and I’m not a big fan of rent control and have not mentioned it in my post. I believe there is a solution to this that will satisfy (to a point) both sides. Instead of slamming an unexpected group of approximately 1000 residents with a 47%rent increase. I’d suggest extending the hike over 4-5 years. This gives residents time to actually sell their homes or make other arrangements. With the 90 day notice it is barely enough time to get through escrow let alone sell your house and find someplace to move to. Keep in mind the article and that you are talking about Seniors, handicapped, and disabled people who have special needs that live here and built their homes to accommodate them.
Mike, this article was a year ago, has there been any headway with this park. I ask because my sister is looking into moving there.
For a new resident there should be no immediate concern. The current rent rate for new residents are pretty much at market value of 1100-1200 for space rent. It is still a very nice park. The issue was the current long time resident that was previously paying $680-705 for space rent and the new owners wanted to bump them up to 1000-$1100 in 90 days. For someone in there final years and on limited fixed income this spelt disaster. After 6 months of negotiations the first increase for these residents was $119.
My advice to any new tenant is to check out the lease options and negotiate your best deal
I understand the dilemma from the standpoint of the homeowner/renter. Look at it from the point of view of the investor. They, first and foremost, are looking for a return on their investment, regardless of any altruism involved (or else this would simply be philanthropy). When rent control measures are put in place, the investor either cannot make money, or has a difficult time obtaining a determined ROI on his/her investment. Therefore, they will weigh the costs to scrap the entire park and build cash flowing apartments, storage units, or something else. This will result in ALL of the current homeowners being displaced. You don’t want the tenants to leave the city; however, – arguably – investors feeling would result in a much worse outcome. My two cents. I will agree, without hesitation, we do have an affordable housing crisis. I do not, however, believe rent control is the solution.
A return on investment is understandable. But a conservative dollar amount, just with the rent increase, is over one and a quartet – 1 1/4 – MILLION DOLLARS…..PER MONTH. While seniors that are old, ill, broke, will have to walk away with nothing and no place to go. That’s way beyond a return on the investment…that is plain old GREED. SHAMEFULL.
There will be a meeting in the Rancho La Paz Clubhouse on May 20th at 6:00pm to discuss an action plan, and to offer a forum for the residence to be be heard. We are trying to get legal assistance to help spearhead a meeting and possibly a negotiation with ownership.
That os outrageous!! Where are all the Politicians with their promises to protect Seniors?????