FAQ – The Franciscan Co-op

Joining the Co-op

Will my $2,500 membership fee be refunded if FRAC does not convert to a cooperative?

Yes. 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Why should I sign up for the co-op?

The answer is that a resident owned Park is the only way for residents to control their destiny as a mobile home park. An all-resident Board of Directors, voted in by the resident members, will make the best decisions to control costs, keep rent level stable, and keep the park open as a mobile home park for decades. Any other alternatives provide an uncertain outcome with the risk of large rent increases or even park closure.

Who will hold my $2,500?

McGovern Escrow Services, Inc. (Escrow Number 101213) will hold your funds until the National Cooperative Bank loan closes.

Who gets my $2,500?

Your $2,500 is deposited in your name in a licensed independent escrow company.

What does the petition and disclosure statement mean? What protections are being waived?

That disclosure and that specific language is required by statute, the Map Act, (Gov Code Section 66428.1) and it actually contemplates a different situation than what is going on here.

The “protections” under the Map Act that the disclosure is aimed at are certain procedures that are intended to help avoid economic displacement of residents in the event that the park converts and, for example, where spaces are sold to get around any rent control restrictions or where the property converts to condos and become unaffordable.

Here, that’s not an issue because no one is being displaced and all residents can become members. All cooperative members have a say in the subsequent operation of the park.

The Map Act is designed to protect local control, design, and improvement of property and to protect the public, residents, and purchasers from prevent fraud and exploitation.

Here, the process is necessarily inclusive and open to all residents who choose to participate and, if the park converts and a resident decides not to join the cooperative, that resident remains in their space as a tenant paying rent to the cooperative; no one will have to move.

In short, the disclosure is problematic and isn’t really helpful or applicable here. But it’s required by statute. The residents are actually gaining protections rather than losing them.

Is membership in the Cooperative mandatory?

No. Becoming a member is voluntary. It is not mandatory for current residents to become cooperative members. However, if a nonmember household leaves the park in the future, and sells or moves their home, the new occupant must become a member.

How will my $2,500 membership fee be spent?

A portion will fund the transaction costs and will be used to close the NCB loan.
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How do I know that the $2,500 membership fee is safe?

A professional escrow company holds the funds according to the terms of the Membership Agreement until the National Cooperative Bank is ready to close.
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Am I required to pay the entire $2,500 upfront?

No, all that is required is a deposit of $500 or $250 for low income residents who wish to join the co-op. Any balance of payment would be required at closing of escrow.

Managing the Co-op

Who will manage the Franciscan?

A professional property management company under the direction and control of the FRAC Board of Directors, with fully bonded employees.
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If we become a cooperative, will I own my own lot?

No, you will not own your own lot, but you will be able to hold a membership interest in the cooperative corporation that owns the park.

If we become a cooperative, who would own the Franciscan Mobile Home Park?

Franciscan Resident Advisory Committee, A California Non-Profit public benefit corporation, established August 6, 2010. (FRAC)
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If we become a Cooperative, who determines the amount of monthly carrying charges?

Monthly carrying charges will go towards paying the park mortgage, property taxes, utilities, insurance, and other services. The cost of monthly carrying charges will depend on several factors, including the annual cost of maintaining the park and the mortgage. The Occupancy Agreement replaces the member’s previous lease agreement with the prior owner. Non-members continue to pay rent to the Cooperative per the terms of their existing lease agreements.

If we become a cooperative, do we continue to pay rent?

Monthly carrying charges are collected by the cooperative from members, similar to the monthly rents collected by the current park owner, according to the terms of the Occupancy Agreement for the member’s space.

Current infrastructure has to be fixed. Will it be fixed before the co-op happens?

An appraisal and physical needs assessment will be done to asses what repairs are needed in the park. A reserve structure fund will be put in place to address the repairs and infrastructure needs of the park after the co-op is formed.

Could a non-resident, third party buy multiple shares?

The by-laws state that only a resident or residents of a single household of the park can purchase membership interest. A partnership, corporation or any third party is NOT permitted to trade in membership interests. This safeguard in the by-laws is designed to prevent an outside party from attempting to acquire the park.

Membership share

When do I get my $2,500 back?

Your $2,500 plus interest is returned to you if you choose to sell your home and leave the park.

What will my membership look like?

It will be a certificate issued to you bearing the FRAC Corporate Seal, and all required restrictive legends.

What happens to my $2,500?

Once the Franciscan Mobile Home Park converts to a limited-equity housing cooperative, your $2,500 membership fee will fund your membership interest in the Franciscan Residence Advisory Cooperative, and will earn up to 10% interest annually as approved by the FRAC Co-op Board of Directors.

If I become a member and later decide to sell my home and move, what happens to my membership interest?

If you ever decide to sell your home or move from the Cooperative, you will receive the value of your membership interest, as adjusted for annual appreciation.

How many memberships can be sold per space?

Only one membership per space and one vote per membership.
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After the loan is paid off, will rents be reduced?

When the mortgage loan is paid off, the monthly carrying costs for the Co-op will decrease because the monthly expenses will also decrease.

My heirs

What will happen to my heirs? Can they continue to live in my home at the park?

The answer is “Yes.” They will need to update their paperwork with the membership committee. The co-op difference is that the membership committee is committed to the needs of the residents. Every effort will be made to ensure the designated heirs will remain in your home according to your designation and wishes, without any penalties. The co-op difference is everyone must be treated fairly, equally, and respectfully without regard to whether outside interests could make money on the space by demolishing the home and reselling it at market rate.

May I will my membership fee to an heir?

Yes, your total membership fee plus earned interest, as well as your home, may be willed to your heir.

Public Access

When will the park’s power come back on?

PG&E has an outage map HERE. Since our homes aren’t individually metered by the utility, use 700 Hoffman Street as the address you search for.

Some of your neighbors are part of the Community Emergency Response Team, learn about joining and what to do in emergency by going HERE.

What are these Daly City inspectors doing here?

All homeowners in the Franciscan received letters and inspections by Daly City. The rules ostensibly are there for safety: focusing on stairs, fire safety, storage structures, and electrical panels on the OUTSIDE of the units.

While some repairs were simple, others were costly and out of reach of the average homeowner. Some residents claimed that repairs mandated by the city inspectors ignored the fact that the construction was “grandfathered in”, meaning they were made before current state rules were enacted. Other residents claimed that inspectors found new issues each time they visited, which was seen as unfair. Also, several of the issues for the homeowner to complete were actually the responsibility of the park management. FRAC’s lawyer contacted the City with these claims, to make it more fair for all residents.

The city’s team responded to FRAC on August 18th, 2023. We wanted to share this letter with everyone what we now know about repairs prior to 1998 (grandfathered), how to find records from the city, and how to make hardship requests.

One resident was told to remove her entire deck. She was able to have the city research its own records to find out that it was already permitted by a previous owner decades ago. That’s a huge win over what could have been a VERY costly repair. She kept a copy of the permit for future use, too 🙂

We see the city’s response as a success. It’s proof that when citizens unite (as a co-op for example) we can make big strides against a system that isn’t working or isn’t fair.

You can see the full letter from the city by clicking HERE.