Bill Text: DE SB33 | 2013-2014 | 147th General Assembly | Draft
Bill Title: An Act To Amend Title 25 Of The Delaware Code Relating To Manufactured Homes And Manufactured Home Communities.
Spectrum: Strong Partisan Bill (Democrat 10-1)
Status: (Enrolled - Dead) 2013-06-25 - SS 1 for SB 33 - Passed by Senate. Votes: Passed 18 YES 2 NO 1 NOT VOTING 0 ABSENT 0 VACANT [SB33 Detail]
Download: Delaware-2013-SB33-Draft.html
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SPONSOR: |
Sen. Ennis & Sen. Bushweller & Rep. Baumbach & Rep. Carson |
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Sens. Sokola, Venables; Reps. Atkins, Kowalko, Longhurst |
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DELAWARE STATE SENATE 147th GENERAL ASSEMBLY |
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SENATE BILL NO. 33 |
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AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO MANUFACTURED HOMES AND MANUFACTURED HOME COMMUNITIES. |
Section 1. Amend Chapter 70, Title 25 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strikethrough as follows:
SUBCHAPTER III
§7040 Purpose.
Manufactured housing has become a vital source of affordable housing in Delaware, particularly as a homeownership opportunity for low‐income households who otherwise would likely not be able to move into homeownership. Manufactured home owners make substantial and sizeable investments in their manufactured homes. Once a manufactured home is situated on a manufactured housing community site, the difficulty and cost of moving the home gives the community owner disproportionate power in establishing rental rates. The continuing possibility of unreasonable space rental increases in manufactured home communities threatens to diminish the value of manufactured home owners' investments. Through this section, the General Assembly seeks to protect the substantial investment made by manufactured home owners, and enable the State to benefit from the availability of affordable housing for lower income citizens, without the need for additional State funding. The General Assembly also recognizes the property and other rights of manufactured home community owners, and seeks to provide manufactured home community owners with a fair return on their investment. Therefore, the purpose of this section is to accommodate the conflicting interests of protecting manufactured home owners, residents and tenants from unreasonable and burdensome space rental increases while simultaneously providing for the need of manufactured home community owners to receive a just, reasonable and fair return on their property.
§7041. Definitions.
The definitions contained in §7003 of this title shall apply to this subchapter. Unless otherwise expressly stated, if a word or term is not defined under §7003, it has its ordinarily accepted meaning or means what the context implies.
§7042. Rent Justification.
(a) A community owner may raise a home owner's rent in an amount greater than the annual average increase of the Consumer Price Index For All Urban Consumers in the Philadelphia-Wilmington-Atlantic City-PA-NJ-DE-MD area ("CPI-U") for the preceding thirty-six month period provided the community owner can demonstrate the following to the Authority:
(1) the cost of operating, maintaining, or improving the manufactured home community in the prior twelve months has risen more than the annual average increase of the CPI-U during the prior thirty-six month period; and
(2) the community owner has not been found in violation of the law in compliance with the provisions as outlined in Chapter 70 during the preceding twelve month period; and
(3) The proposed rent increase is directly related to operating, maintaining or improving the manufactured home community.
(b) If the community owner demonstrates to the Authority that the costs of operating, maintaining, or improving the manufactured home community in the prior twelve months has risen more than the annual average increase in the CPI-U for the established thirty-six month period, the Authority shall grant the community owner's request consistent with §7042(g) of this title.A community owner shall not incorporate the cost of a civil penalty, criminal fine, or litigation related costs for rent related proceedings into rent charged under any circumstance.
§7043. Hearing of the Relocation Authority or successor.
(a) A community owner shall make application to the Authority for permission to raise a home owner's rent pursuant to §7041 of this title.With the exception of those procedures described in this subchapter, all proceedings shall comply with Subchapters III and IV of Chapter 101 of Title 29 of this Code.The Authority shall adopt procedures to govern the proceedings outlined in this subchapter, including application procedures.
(b) Upon the application of a community owner for approval of a rental increase, the community owner shall submit to the Authority financial or other pertinent documents or information supporting the claim regarding the costs of operating, maintaining, or improvingthe manufactured home community. The Authority is authorized to request additional financial or other pertinent documents or information from the applicant before it holds a hearing. If the community owner fails to provide the requested information, the Authority shall deny the community owner's application.
(c) The Authority shall schedule a hearing for the purpose of determining appropriate action on the application within 90 days after the date of application or within 30 days after receipt of additional documents or information requested by the Authority, whichever is later. The community owner shall provide each home owner within the manufactured home community, the home owner association of the manufactured home community, and the Consumer Protection Unit of the Delaware Department of Justice at least three weeks advance notice of the scheduled hearing before the Authority. The notice shall provide the time, date and place of the hearing.
(d) An affected home owner of the proposed rent increase or an established home owners association of the manufactured home community may provide evidence to the Authority regarding the application of the community owner.
(e) A court reporter shall transcribe the proceedings before the Authority. The fee of the court reporter shall be paid by the applicant.
(f) In reviewing a community owner's application, the Relocation Authority shall consider relevant factors including but not limited to:
(1) The completion and cost of any capital improvements or rehabilitation work in the manufactured home community, as distinguished from ordinary repair, replacement and maintenance;
(2) Changes in property taxes or other taxes within the manufactured home community;
(3) Changes in utility charges within the manufactured home community;
(4) Changes in insurance costs associated with the manufactured home community;
(5) Changes in reasonable operating and maintenance expenses within the manufactured home community, such as costs for water service, sewer service, septic service, water disposal, trash collection, and employees;
(6) The need for repairs caused by circumstances other than ordinary wear and tear in the manufactured home community; and
(7) Market rent. For purposes of this section, market rent means that rent which would result from market forces absent an unequal bargaining position between the community owner and the home owners. In determining market rent, the Authority may consider rents charged by comparable manufactured home communities in the applicant's competitive area.
(8) The amount of Rental Assistance provided by the community owner to the home owners under 25 Del C 7021A. To be comparable, a manufactured home community must offer similar facilities, services, amenities and management.
The Authority shall be permitted to seek the advice of economists from the University of Delaware, Delaware State University, Delaware Technical Community College, the Delaware Housing Authority, and/or an authority from the real estate industry and/or other expert advice as may be required. The Authority shall exercise its authority and judgment in determining if any change in fees may be required to cover additional costs of implementing and administering this process.
(g) Within 30 days of the conclusion of the evidence, the Authority shall issue an opinion setting forth its findings and decision. If the Authority finds that the community owner has not proved the elements established in §7041(a), the Authority shall deny the application.If the Authority finds that the community owner has proved the elements established in §7041(a), the Authority shall grant the application and determine an appropriate increase to offset and defray the community owner's increase in costs, taking into account the principles of capitalization, amortization and depreciation of any improvements made to the affected manufactured home community.The costs, but not attorneys' fees, that the community owner incurs in pursuing a rent increase under this section shall be considered and included by the Authority when determining the rent increase.
(h) The Authority's findings shall be mailed to the community owner, all affected home owners, the Consumer Protection Unit of the Delaware Department of Justice and ,the home owners association within two days of the date of the issuance of the Authority's findings.
§7044. Appeal.
The community owner, the home owners association, or any affected home owner may appeal the decision of the Authority within 30 days of the date of issuance of the Authority's opinion. The appeal shall be to the Superior Court in the county of the affected community. The appeal shall be on the recordwithout a trial de novo.
§7045. Penalties.
A community owner who raises a home owner's rent more than the annual average increase of the CPI-U for the preceding thirty-six month period without having obtained approval of the Authority shall be required to immediately reduce the rent to the amount in effect before the unauthorized increase and be subject to the forfeiture of rent for three months from each home owner in the community who received the unauthorized rent increase. The Department of Justice shall investigate complaints that the community owner has raised rents more than the CPI-U without Authority approval.
Section 2.Amend §7021A(b), Title 25 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strikethrough as follows:
§7055. Exemption.
Resident owned communities shall be exempt from the provisions of this Subchapter.
§7021A. Lot Rental Assistance Program.
(b) The homeowner,
tenant, and other residents may not be recipients of any other rental
assistance funding., nor may the rented lot on which they reside be
regulated by rent control.
Section 3. If any provision of this Act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act which can be given effect without the invalid provision or application; and, to that end, the provisions of this Act are declared to be severable.
SYNOPSIS
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This Bill provides that if a community owner desires to raise the rents charged to homeowners in a manufactured home community more than the average annual increase in the Consumer Price Index For All Urban Consumers for the preceding thirty-six month period, the owner must seek approval of the Delaware Manufactured Home Relocation Authority. The Authority will consider evidence regarding increases in the cost of operating, maintaining and improving the affected community. If the Authority finds that the owner has not demonstrated that the costs of operating, maintaining or improving the community in the prior 12 months has exceeded the CPI-U , it will deny the applicant's request.If the Authority finds that the community owner has proved that the costs of operating, maintaining or improving the community in the prior 12 months has exceeded the CPI-U , the Authority is required to grant the application and determine an appropriate increase to offset and defray the community owner's increase in costs.An appeal to the Superior Court on the record may be made by the community owner, the home owners association, or any affected home owner. |
Author: Sen. Ennis
