WHEREAS, Manufactured Home Communities, Inc., its subsidiaries and
affiliates (collectively MHC), constitute a large single manufactured home
community owner in the State; and
WHEREAS, during the past two years, MHC has employed business practices
that have left many residents of its communities in the State feeling that they
had no choice but to sign leases which they felt were unfair and in violation
of Delaware law; and
WHEREAS, the business practices of MHC have allegedly included repeated
and harassing visits to residents’ homes directing them to remove weeds, permit
invasive inspections, and allow MHC employees unannounced and unrestricted
access to their properties to search for possible lease violations; and
WHEREAS, during the past year, MHC has instituted new rental agreements
for its communities in the State parts of which have been found to violate the Manufactured
Home Owners and Community Owners Act (as enacted by House Bill No. 2 of this
General Assembly); and
WHEREAS, repeated attempts to resolve illegalities in the MHC leases
resulted in legal action by the Attorney General of Delaware and a Consent
Order through which MHC was directed to remove or modify several provisions of
its leases; and
WHEREAS, as a result of significant disagreements over MHC’s compliance
with the Consent Order, the Attorney General brought the issue to the Superior
Court, alleging that MHC was in violation of the Consent Order and that many of
the provisions of the MHC leases were invalid and that they should be modified
or removed from the leases; and
WHEREAS, the Superior Court held that several of the provisions of the
leases did in fact violate Delaware law and were unenforceable including those
governing: Automatic Direct Withdrawals, Mandatory Arbitration, Liquidated
Damages; a Right of First Offer, Entry Provisions, Eminent Domain Procedures,
certain “Additional Rent” Charges, and the Cessation of Water Services and
Assessing of Certain Fees; and
WHEREAS, the Superior Court also found that a specific provision
relieving MHC from a pre-existing rent “cap,” intended to limit the amount by
which it could raise lot rents, was valid and that MHC did not have to honor
the pre-existing “cap;” and
WHEREAS, on appeal to the Delaware Supreme Court, the Court affirmed the
Superior Court’s decisions in an order dated March 17, 2004; and
WHEREAS, as a direct result of the Supreme Court’s decision in this
matter, the Senate of this State introduced and passed Senate Bill No. 222,
providing for a cap on future rents charged by manufactured home community
owners; and
WHEREAS, it is the purpose and intent of the House of Representatives in
adopting this resolution to encourage open and constructive discussions on
Senate Bill No. 222 and the persons it directly effects, most notably, MHC; and
WHEREAS, MHC has participated in several discussions at the request of
residents of its communities in Delaware
to resolve their disputes with MHC which have met with moderate success;
NOW THEREFORE:
BE IT RESOLVED by the House of Representatives of the 142nd General
Assembly of the State of Delaware that it does hereby strongly urge Manufactured
Home Communities, Inc. to modify its business practices in Delaware, to adopt
practices consistent with Delaware industry standards, to continue its pursuit
of an amicable settlement with residents of its communities in Delaware, to
grant those residents reprieve from eviction proceedings and other landlord
remedies provided under the law until such time as an amicable settlement can
be reached in the matter, and to remove those provisions from its Delaware
leases which have been found to be unenforceable.
