Resident Owned vs Leased Land Manufactured Home Communties

Explanation of a Cooperative Manufactured Housing Corporation (Co-Op) 

A co-op is a cooperative setting. It is a very interesting alternative.  Mobile home park cooperatives usually own the land, utilities, and community facilities; their members own the individual "mobile homes and use legal documents including recorded covenants as the basis for maintaining the desired cooperative controls over functioning of the cooperative community.

A housing cooperative is formed when people join with each other on a democratic basis to own or control the housing and/or related community facilities in which they live. The main distinction between a housing co-op and other forms of homeownership is that in a housing co-op you don't directly own real estate. But if you don't own real estate, what exactly are you buying? You are buying shares or a membership in a cooperative housing corporation. With each co-op the amounts of shares vary. The corporation owns or leases all real estate. As part of your membership (being a shareholder) in the cooperative you have an exclusive right to live in a specific unit (this is established thorough an occupancy agreement or proprietary lease) for as long as you want, as long as you don't break any of the rules or regulations of the cooperative. As part of your membership, you also have a vote in the affairs of the corporation. When you buy a share or membership in a housing cooperative, you are paying for just that: a share of the cooperative housing corporation. The purchase price will vary depending on what kind of neighborhood it is in, how big the unit is, whether the co-op limits resale prices, and whether the co-op has an underlying mortgage for the entire property. Let's say you were going to buy a $100,000 home. Most likely you would not be able to pay the seller $100,000 in cash for the house. Instead, you would pay a down payment, and you would get a mortgage from a lender to cover the rest of the purchase price. In a co-op, since you are actually buying a share(s) in a corporation rather than real estate, you get a type of loan called a share loan from a lender. A share loan is like a mortgage. It provides you with borrowed funds to buy the share(s) from the seller. You then make monthly payments on the share loan to the lenders and monthly carrying charge (maintenance) payments to the co-op.

You no longer pay lot rent, but again you still pay a monthly maintenance fee which in most cases is ½ the cost of lot rent and sometimes includes things like the trash bill.  The charges also cover your proportionate share of operating and maintaining the cooperative, which can include blanket mortgage payments, property taxes, management fees, maintenance costs, insurance premiums, and utilities of the Community itself, and contributions to reserve funds.

Because you would now own a share, you would also now pay a property tax bill on the share.  This arrangement is best considered if your lifespan is expected to be a longer term you have to weigh the differences.  You need to compare the lot rent you would pay over your expected life expectancy verses the additional cost you will in tail if purchasing the share which in most cases upward of $25,000.00 on top of the price of the home.  For some this is an advantage if you plan to make this your home for the remainder of your lifespan.  For others depending on your expected life span it is not in your best interest.  None the less, The Thompson Team suggests you try out the Community first before investing in a share within the Community.  Another note to consider is that if you purchase a share and you finance that share, you will be paying interest on that share.  You would need down payment money that would normally be in savings earning interest.  Often times what you pay a Lender for the share will amount to what you would be paying on lot rent in the first place.  Buying into a Community share does have its benefits but again, you really have to weigh the pros and cons and every individual is different.  The Thompson Team will admirably assist you in this decision process.  Feel free to contact us at any time via Email at or via our web site at You may also phone us at our office number of 863-325-8217 where we will look forward to assisting you!


Possible lower down payment.  Possible longer mortgage term than without a share, but you will pay interest fees, that could otherwise be in savings earning interest.

Living in a Co-op Stays Affordable
Members have no reason to substantially increase monthly charges unless taxes or operating costs go up, so monthly charges could remain reasonable, but in most cases this is the same in a leased land arrangement.

Tax Deductions
For income tax purposes, the co-op member is usually considered a homeowner and, as such, can deduct his or her share of the real estate taxes and mortgage interest paid by the cooperative.

Co-ops can provide for accumulation of individual member equity. For market-rate co-ops, the accumulation of equity and resale prices are based on the market just like the traditional site built home market.

Limited Liability
Members have no personal liability on the co-op mortgage. The cooperative association is responsible for paying off any mortgage loans. This can often make it possible for persons whose income might not qualify them for an individual mortgage to buy a membership in a limited equity co-op.

Consumer Action
Through their cooperative association, members can jointly exert influence in order to change tax rates and utility prices and obtain improved services from local governments.

Co-op members can benefit from economy of scale in co-op operating costs as well as from not-for-profit operation. Also, when there are "transfers", only the out-going member's equity must be financed by the incoming member.

Elimination of Outside Landlord
Co-ops offer control of one's living environment and a security of tenure.

Community Control
As mutual owners, member residents participate at various levels in the decision-making process. This is not true of tenants who usually do not have the opportunity to exercise responsibility. Members own the cooperative together and have the security of being able to remain in their homes for as long as they wish, as long as they meet their monthly obligations, and abide by the co-op bylaws, rules, and regulations.

Cultural Diversity
Many co-op members indicate that the possibility for interaction with people from different backgrounds, cultures, and income levels is a positive factor in their decision to become a member.

Extended Services
By establishing cooperative procedures and working together, people are able to provide services for themselves.  When one cooperatively organized venture is successful it often becomes clear that people can be successful in another area as well. As a result, the original effort often can be strengthened. Examples include senior health care and support services.

Shared Maintenance Responsibilities
Co-op members usually have limited direct maintenance responsibilities. The cooperative association is responsible for major repairs, insurance, replacement of worn-out equipment, and upkeep of common grounds and facilities.

Vandalism and Security
Co-op members vigorously protect their association's property just as gated leased land Communities.  

Comparing A Co-Op Manufactured Home Community 
A Leased Land Manufactured Home Community


Cooperative Community

Leased Land Community

The residents are shareholders in a corporation that owns the property. Owning a share entitles you to occupy a unit.

Tenants lease the land their home sits on. 


Monthly Cost: 
Members pay the Co-op for their monthly share of the actual operating cost, building mortgage, and real estate taxes, based on the operation of the entire community. Trash is sometimes included. Monthly Co-Op payment is normally lower than lot rent; however you will pay property taxes because you in essence now own a share of the land.

Monthly Cost: 
Tenants pay lot rent specified in lease that often includes trash, water, and sewer. Lot rent is normally more than a Co-Op maintenance payment but you pay zero property taxes and have no other financial responsible liabilities of any kind.


Community Control: 
Co-op resident members elect their board of directors, which decides all policy matters. The Board usually sets up several committees to help run the community. Maintenance is the responsibility of the share holder.

Community Control:
Decisions are made thru Home Owner Associations. Maintenance and sometimes costly repairs are the responsibility of the Community owner, not you.


Federal Tax Benefits: 
Your share of mortgage interest and real estate taxes are deductible on personal income tax return.

Federal Tax Benefits: 
No benefit because you saved and not paid real estate taxes of any kind in the first place!  Thereby hoping this money was saved in a savings account earning interest all along!


Pamela Shilling Thompson
Pamela Shilling Thompson
Central Florida LAKE WALES FL 33859