Workers are tearing down a few abandoned trailers at a mobile home park south of Indianola, making way for six newer ones.
Residents at North American Mobile Home Park were told this week that other trailers, many more than 40 years old and in poor shape, will be inspected now once a month.
New leases were handed out saying rents may be adjusted “from time to time.”
Eleven pages of new rules allow residents to be evicted for everything from their visitors’ drunkenness to exceeding the posted speed limit to having toys in the yard.
Those who don’t sign by July 1 stand to be evicted, a letter from the on-site manager says.
Several residents said they are nervous after learning the new owner of the Indianola park, Havenpark Capital Partners, is the same Utah corporation that recently bought four parks elsewhere in Iowa — and then dramatically increased lot rents. One interviewed this week was hopeful. Others were suspicious and angry.
Two people wrote Watchdog, inquiring about the corporation, its out-of-state owners and their intentions.
Orem, Utah-based Havenpark Capital owns more than 25 mobile home communities across the country and has been expanding rapidly, promising high-yield returns to investors “without the inconvenience of directly owning and operating the property.”
“The firm buys communities with significant upside potential in strong metropolitan areas and works aggressively to drive additional value through various operational methods,” online promotional materials say.
One of those methods, residents have discovered, has been to raise lot rents.
The company bought Midwest Country Estates in Waukee and Golf View Mobile Home Park in North Liberty last month, and immediately announced plans to raise standard lot rents 69% and 58% respectively by July 1.
At West Branch Village and Sunrise Mobile Homes near Iowa City, the company notified residents it’s raising rents 20% to 33% by the same date.
The company has said it needs to keep prices competitive and has told residents it has plans to reinvest money in upgrading the communities.
“I like the new owners. It seems like they are trying to do things,” said Joyce Spalek, a resident for three years at North American. “Some of the new rules are outrageous, but I understand why they have most of them.”
Complaints lodged in other states over business practices
But others have questioned the legality of the company’s leases and higher fees.
In Indianola, for example, Havenpark Capital’s largely low- or fixed-income customers are being charged $75 for returned checks.
Though Havenpark Capital is just three years old, it has racked up complaints related to its business practices with consumer protection officials and housing advocates in several states, Watchdog found.
Attorneys general in Michigan, Indiana, Ohio and Iowa all have fielded concerns from residents in Havenpark parks.
The Better Business Bureau gives the company an “F” rating after several complaints alleging overcharging.
Iowa Legal Aid has taken on about two dozen Havenpark residents as clients after finding allegedly illegal provisions in the company’s leases, said Alex Kornya, its litigation director.
Several of the company’s principals this week did not return messages seeking an interview. Havenpark regional manager David Piziali and its Iowa attorney, Jodie McDougal, with the Davis Brown Law Firm, also declined to comment.
According to company materials and executive profiles on LinkedIn, the company’s managing director is a 33-year-old former start-up mentor named Ramie Rajabi.
One of the managing partners is Robison “Robbie” Pratt, a 39-year-old former Olympic pole vaulter for Mexico who, like other company execs, attended Brigham Young University. Pratt and his wife, Lisa, a former track and field All-American and professional runner, started Hacienda Capital Partners, one of two investment groups that formed Havenpark.
Another partner who heads acquisition efforts and deal structuring is Lisa Pratt’s father, J. Anthony Antonelli, who is described as an “angel investor in several early and mid-stage venture capital and private equity investments that have gone public.”
Antonelli heads Worldwide Solutions, the other investor corporation that formed Havenpark.
Antonelli and another key figure in Havenpark’s business dealings were top executives at Nu Skin Enterprises when the Federal Trade Commission investigated the company over complaints of deceptive advertising and overstating income earned by distributors.
In 1994, following an FTC investigation, that company paid a $1 million fine and signed a consent decree prohibiting it from making deceptive claims about its products.
In 2016, Nu Skin agreed to pay a $47 million settlement for operating a pyramid scheme after being sued by China in a Utah federal court. (Nu Skin was forced to pay another $750,000 for bribing a top Chinese official with funds from Nu Skin’s charitable division after a U.S. Securities and Exchange Commission probe.)
According to Kornya, one man who has been setting up individual corporations for the communities owned by Havenpark and signing mortgage documents is Nathan Ricks.
Ricks was a top executive at Nu Skin during the FTC investigation, his own promotional materials show. A multimillionaire and major real estate investor in Utah, he has been an international public speaker who espouses honesty and integrity in the dicey world of network marketing.
‘It’s what we can afford’
Among complaints to Iowa’s attorney general are Waukee residents who claim Havenpark has no record of what is owed on homes that residents were paying on each month.
Missing records also have been an issue in Indianola.
Tammie Ackelson, a resident of the mobile home community for close to 16 years, says she and her husband didn’t know until this week that Havenpark was the firm that bought North American this year.
She says her lot rent increased slightly, from $427 to $440, after the sale.
“They tried to say we owed $1,000 in back lot rent when they took over, but I had receipts and showed them.”
Ackelson said the company hired tree trimmers, added cameras to prevent vandalism and is making other small improvements. But the former Walmart worker, who is currently unemployed after a shoulder surgery, says she’s not sure what she and her husband will do if rents go higher.
“It’s all we can afford right now,” she said.
Other residents living in North American say they’ve made payments for years to own mobile homes that are decades old and in poor condition. They now stand to lose them if they do not pass the monthly inspections.
The new lease says residents cannot sell their homes if Havenpark doesn’t approve of the buyer first, and several of the homes aren’t worth what it would cost to move them.
Maria Walker said she and her husband recently had to borrow money to tear down their trailer after a tree in a flood plain fell on it from a neighboring property in March. The company later required them to pay lot rent for the month of April, though they were tearing down the trailer.
They’ve since purchased a doublewide in the park for $1,000. But they have to make repairs to the windows, the railing, the deck and the skirting or face eviction by July.
“I’m a nervous wreck,” Walker said. “We put all the money we had into the one we tore down.”
Legislators fail to act, again
Housing experts say what’s happening with Havenpark Capital Partners properties has been happening across the country over the past 20 years:
Real estate investment corporations and private equity firms alike have been snatching up mobile home communities for multiple reasons: Operating costs are relatively low, rents can be increased steadily, unwanted tenants can be evicted for almost any reason, and a nationwide shortage of affordable housing means the homes stay filled.
In some other states, residents have organized and established resident associations to negotiate more effectively with corporate owners and government officials.
In Iowa, members of the Teamsters union have been helping organize tenants in North Liberty, and residents in Waukee have been meeting informally with Iowa Legal Aid. (Another meeting is 5 p.m. Tuesday at Lutheran Church of Hope in West Des Moines.)
Abuses in mobile home communities across Iowa have been well-documented in the Register and other media.
In the past decade, however, state legislators have failed twice to pass bills aimed at better protecting residents, who have even fewer rights than apartment dwellers.
The first time came in 2011, after a yearlong Register probe by Watchdog found serious problems, including abusive and predatory sales tactics, illegal trailer sales and serious health and safety problems in communities across the state.
A handful of the most problematic parks then were owned by The Churchill Group, a company started by a Colorado millionaire and ex-felon named George Gradow.
This year, after Havenpark residents complained to legislators, similar legislation requiring owners to have good cause before evicting tenants came close but didn’t pass.
The bill, House File 638, included protections against excessive late fees, a longer notification period for rent hikes and “good cause” protection for mobile home residents facing eviction.
“We were told there was substantial support in the House,” said Sen. Zach Wahls of Iowa City, a Democrat and sponsor of the legislation.
One lobbyist registered as opposing House File 638, the same person credited with shooting the other measure down in 2011: Joe Kelly, who heads Iowa’s Manufactured Housing Association.
The House did not take up the bill in the final hours of the session, ending its chances this year. However, because this is the first year of a two-year General Assembly, the House could approve the bill next year and send it to the governor without returning it to the Senate.
Kelly declined to comment until he’s had a chance after the session to meet with his board.
More than 4% of Iowans live in manufactured homes, but virtually no new communities are coming online, according to a report by the Private Equity Stakeholder Project, MHAction and Americans for Financial Reform Education Fund.
That means current owners are relatively unchallenged by competition.
The report urges government officials to take steps to ensure affordability by stemming predatory investments, instituting meaningful complaint procedures, preventing unjust evictions and providing a means for rent stabilization, among other ideas.