What is a Recreational Vehicle (RV) Lot Lease?
An RV lot lease is an agreement that provides a right of occupancy for a specific period of time in a lot located on a development where other lots have been reserved by other owners and/or tenants for long-term use. Unlike a mobile home park or a traditional land lease, the owner of the lot has the right to park a recreational vehicle on the property and use it during specified times throughout the year. The development may be compared to a planned unit community in which the owner of a lot retains a deeded interest and the owner of a recreational vehicle has an exclusive right of use by the vehicle owner for a specified period of time. The owner of the recreational vehicle may be required to pay a fee for the use of the lot during the lease term. On RV lots, the improvements created by the owner of the recreational vehicle include a deck, a shed and other amenities that add value to the lot for which additional space charges may be assessed. The RV lot lease may be of a short-term duration , which means that it must be renewed at the end of the lease term. Renewal either concerns the extension of the lease term with or without modifications, or requires the issuance of a new lease in which the parties set forth the terms and conditions applicable thereto. The RV lot lease can also be of a longer duration, in which case the lease agreement should be recorded in the public records. For that genre of RV lot lease agreements, the parties should strongly consider the use of statutory forms developed under applicable state law that provide for the orderly transfer of the recreational vehicle, together with the interest in the lot to the transferee from the owner of the recreational vehicle. To provide the parties with flexibility for the duration of the term, the lease can be fashioned as a 99-year lease, which the parties at the end of that period can renegotiate for an additional period of time, or they can forever agree to renew the lease at the expiration of the original term.
Basic Elements of Recreational Vehicle (RV) Lot Leases
In creating a lease agreement for a recreational vehicle (RV) space and/or facilities, some of the key terms to be considered, and included in such an agreement, are the following:
- Site number and description
- Term of agreement – usually year-to-year regarding the lease of the actual lot; amount of advance notice required to terminate the lease is typically provided in the lease agreement
- Lease payment amount and frequency – rent is often due on a specific date each month and may include other charges as well (e.g., assessments, fee for using resort amenities, pet fees, etc.)
- Amenities agreement (e.g., pool, spa, beach access, utilities, etc.)
- Lessee rights regarding the site (e.g., rights to occupy the lot, rights to alter the site, use of recreational amenities, etc.)
- Rules and compliance (e.g., use of the property, assessment of fines, pets, garbage disposal, parking, use of common areas, rental of property, voluntary relocations, removal and termination of lease, dispute resolution, smoking, selling the improvements, assessment increases, selling the home with the lease, etc.)
- Representation and warranties of the parties (e.g., title to the property, compliance with zoning laws, disclosure of any material adverse facts, no legal actions pending, sufficient insurance coverage, etc.)
- Administration and interpretation of the agreement (e.g., notices for non-compliance, lease termination, renovation standards, exit conditions, waivers, costs and expenses, etc.)
- Miscellaneous (e.g., assignment of the lot and/or lease, rights of first refusal, responsible parties for legal matters, changes to the agreement, governing law, arbitration/mediation, expenses and contingencies, indemnification, confidentiality, interpretation, and provisions related to the enforcement of the RV lot lease agreement).
Legal Issues Related to Recreational Vehicle (RV) Lot Leases
When considering an RV lot lease agreement, a thorough understanding of the relevant legal considerations is necessary to ensure you are properly informed regarding your rights and obligations under the agreement. The first issue to consider is whether the site you intend to use is zoned for RVs. If the lot or trailer park you want to use is not properly zoned, you could be unable to tether your RV to the land, and could face legal problems down the road. A zoning attorney can help you understand the relevant zoning laws in your jurisdiction. Other considerations include how long you can stay on the property, which is often an important factor for those who consider RV camping a lifestyle. Make sure you are aware of the payout clause – if you wish to leave the property early, you must know your rights and obligations before you decide to depart. In addition, understand what happens when one party does not follow the legal requirements of the agreement. Make sure you are crystal clear about your obligations, as well as the obligations of the landlord or other party with whom you are entering into the agreement. Finally, make sure you understand the process for dispute resolution, should it become necessary, as well as what you can expect if you find the dispute necessary for legal action. Signing the agreement without a full understanding could leave you in a vulnerable position.
Common Contractual Limitations of Recreational Vehicle (RV) Lot Leases
RV lot lease agreements may impose a variety of restrictions on the use of the property. Such restrictions may include limits on the types and sizes of recreational vehicles that are permitted to dock at the property. Restrictions may explicitly define what types of recreational vehicles are allowed, whether there are requirements regarding the condition of such vehicles, and when and how RVs are disposed of when they are no longer permitted or wanted. Some arrangements restrict the use of certain components of the recreational vehicle, including exterior additions, awnings and lots that have historically stayed parked for lengthy periods of time. Vehicle type, condition and proximity to the lot can also be limited.
With the rise in popularity of seasonal and full-time RV use, there may be restrictions on what is and is not permitted in terms of the number of people allowed to live within such vehicle, including age restrictions. Guest policies should be reviewed, including how long friends or family can stay on the premises, whether overnight guests are permitted, and whether rents are owed for their stay.
There may also be restrictions with respect to what types of items can be contained within the RV, including items that are stored beneath the vehicle or on the property, including furniture, bicycles, grills, televisions and other types of appliances. It is not unusual for quarrels between parties to arise over the amount of property that is stored within view of other properties, particularly with respect to furniture such as tables, chairs and storage bins. Other common disputes with respect to the storage of objects on the property include the appropriate placement and storage of garbage cans, kayaks and other forms of water toys.
Hints and Guidelines for Recreational Vehicle (RV) Lot Leases
When negotiating the terms of an RV lot lease agreement, there are a number of things that must be considered. Although there is usually some room for flexibility, as far as the terms of the lot lease agreement is concerned, the law leaves relatively open to negotiation issues that involve the terms of the lease as they relate to the rental rate, the rental term, availability of utilities and amenities, as well as the options for renewing or extending the lease after the initial lease term expires.
With respect to the rental rate, although it may be annoying for tenants, annual rate increases are common in this type of arrangement. These increases must not, however, exceed the allowable cap set by the relevant legislation in the area. It is often better for the lessee when rental rate increases are tied to an indexed increase.
In addition to the issues related to the rent increase, the rental term is another important concern for any tenant. Although a tenant is often reluctant to commit to long-term, many lot leases will mandate yearly term rentals , or longer, as it provides the lessor with a level of security over the property. It may even be worth considering committing to a longer time frame (2-5 years) as this could earn you a reduced rental rate or a waiver of the rights of the lessor to increase the rate during this period.
Although it is uncommon to find the inclusion of utilities and amenities in the rental rate, there are some instances where this may be a possibility. It is a good idea to check on what specific utilities are included in the rental rate, and which are not, as certain resorts do offer some utilities in with the pricing structure.
Finally, tenants must ensure that they have opportunities to renew or extend their lot lease upon expiry of the initial rental term, sometimes even for substantially similar terms in order to ensure continuity. The most beneficial terms for tenants are those where there is a "first right of refusal" whereby a tenant who has satisfied all of his or her lease obligations may have the opportunity to extend the lease for a similar term.
Maintenance and Upkeep Obligations of Recreational Vehicle (RV) Lot Leases
Both the lessee of an RV lot and its lessor share in the management and maintenance of the RV lot to ensure a harmonious and long term relationship. In most cases, the lessee will carry the burden of maintaining the lot and will enter a separate maintenance agreement with the lessor for that purpose. These maintenance provisions should be clearly defined in the lease agreement for the RV lot, and include which areas are to be maintained by the lessee and which are to be maintained by the lessor.
The lessee will be typically be responsible for the following:
The lessor will typically be responsible for the following:
Both the lessor and the lessee will also have other practical duties relevant to their respective interests in the RV lot, including: The foregoing is not intended to be an exhaustive list of the respective lessee’s and lessor’s anticipated duties, but provides a useful guide for the negotiating parties. Remember it is also the lessee’s responsibility to abide by all other rules and regulations of the RV lot and any homeowners association, as applicable, in the community, as well as all local, regional and federal regulations.
Remedies for Violations of Recreational Vehicle (RV) Lot Leases
Just as not performing as a landlord can result in negative consequences to owners who choose not to abide by the terms of an RV lot lease agreement, tenants who choose not to perform can also result in negative consequences. Failure to pay rent can be grounds for termination of the lease. Other types of breaches can include failure to maintain the premises, failure to obtain and provide proof of insurance, causing a nuisance or damage to the property or others, violation of community rules or other failure to perform as required under the terms of the agreement. Every RV lot lease agreement should have written provisions for resolution of lease infractions so that tenants are clearly aware of the potential consequences.
In Florida, where the Jansen practices, a written notice is required to establish that certain rights of the lessor are reserved, including the right to terminate the rental agreement. Failure by the tenant to follow the provisions of the lease agreement can be grounds for termination of the agreement following the proper notice.
In Colorado, the RV lot lease statute does not expressly state that a lease for an RV lot is void in the event a tenant fails to comply with the requirements of the act, nor has any court addressed the issue to date. An owner, however, would likely have the right to terminate a lease based upon an enforceable lease provision, which is consistent with the lease statute. An owner should consult with counsel to make certain that the owner is properly determining the rights of the parties.
Resolving Recreational Vehicle (RV) Lot Lease Disputes
Resolving disputes between the parties is an unfortunate yet essential aspect of RV lot lease agreements. The lease should be very clear regarding how the process for resolving disputes will go, including either mediation, arbitration or litigation. Mediation and arbitration are similar in that they are a way of resolving disputes through a third party, who will ultimately settle the matter. Typically, a mediator cannot decide the outcome , per se, but can facilitate a discussion between the parties that may lead to a resolution of the dispute. An arbitrator is able to virtually act as a judge and can issue a bondable decision that will stand as the final resolution of the dispute. No matter which way you decide to resolve disputes under the lease, it is important that you make clear the process and timelines for actions required to go through each step of the process.