FOR IMMEDIATE RELEASE
Contact: Ralph Durstein, Deputy Attorney General
Consumer Protection Unit
Phone: (302) 577-8510
Date: April 29, 2002
A.G. FILES CEASE AND DESIST ORDER AGAINST MOBILE HOME LANDLORD
Agreement with Manufactured Housing Communities affects 1,500 residents
(Wilmington, DE): Attorney General Jane Brady today announced the resolution of a consumer action affecting approximately 1,500 Delaware mobile home residents. The Department of Justice has entered into an agreement with Manufactured Housing Communities, Inc. ("MHC") and its subsidiaries, covering four mobile home communities in Sussex County - Aspen Meadows, McNichol Place, Sweetbriar, and Camelot Meadows, and one in southern New Castle County - the Waterford community. Attorney General Brady stated, "We were glad to be able to bring together the tenants and MHC to resolve the differences. This is how our consumer protection function is supposed to work. We've resolved the concerns of the tenants, the landlords have been informed as to their responsibility under the law and the leases were reformed."
The Consent Order to Cease and Desist ("Consent Order") enforces the Delaware Mobile Home Lots and Leases Act ("Act") by preventing MHC from imposing new lease provisions in violation of the Act. The Consent Order was negotiated with MHC by attorneys in the Consumer Protection Unit over the past several months, and has been signed by the parties. When contacted by the Attorney General's office late last year, MHC responded immediately through their local counsel, John Paradee of Dover. Several top corporate officers of MHC traveled to Delaware and negotiated in good faith with attorneys in the Consumer Protection Unit. The resulting Consent Order was filed in Superior Court today.
MHC sent the proposed lease containing the illegal changes to Sussex County tenants late last year, generating numerous consumer complaints to the Attorney General. The same lease had been substituted at the annual renewal dates for tenants of the Waterford community in New Castle County. After reviewing the lease document and meeting with tenants, the Department of Justice lawyers determined that MHC had failed to comply with provisions of the Act requiring proper notice of termination or non-renewal of a rental agreement. The tenants, who own their homes but rent the land, are protected by the Act from premature or improper termination of their leases.
Under the terms of the Consent Order, MHC will not attempt to enforce the following lease provisions in violation of the Act:
Forcing tenants to accept automatic deduction of rent payments from their checking accounts;
Granting the landlord a "right of first refusal" to purchase the mobile home, regardless of the tenant's wishes as to disposition of the home;
Requiring the tenant to waive statutory rights and submit all disputes to binding arbitration, while permitting the landlord to seek any and all judicial remedies without such a restriction;
Limiting the tenant to recovery of "liquidated damages", regardless of the merits or magnitude of a claim against the landlord or other remedies available to the tenant;
Allowing the landlord to unilaterally impost fees as additional rent, without prior notice to the tenant;
Giving the landlord broad power to enter upon the premises of the tenant for purposes of property inspection or enforcement of rules.
MHC has agreed to draft new leases in conformity with the Act, including the provisions
for termination and renewal of existing leases. The Order reflects MHC's cooperation, requires payment of a penalty and reimbursement to the State for investigative and legal expenses.
Ed Speraw, president of the Delaware Manufactured Home Owners Association said all Delawareans should be heartened to know that they have Attorney General Jane Brady's office to look out for their interests and to enforce the laws designed to protect them from abuses. Speraw remarked, "When you have two watchdogs like the Home Owners Association and the Consumer Protection Unit under (Director) Olha Rybakoff guarding the same yard, you can guarantee that they'll keep at bay anyone who tries to violate the Mobile Home Lots and Leases Act. We hope
the cease and desist order will show MHC, Inc. and owners of all manufactured home communities that they cannot circumvent or flout the laws and that it will act as a wake-up call to make them realize that it's in their best interests and the interests of the homeowners to work together."
Bill Reed, a resident in the Aspen Meadows community and treasurer of its Home Owners' Association commented, "The action taken by the A.G.'s office tells the whole story. Laws must be obeyed by landlords. The Consent Order protects the mobile home residents, many of whom are elderly and have few options for other housing."
Barbara Tomeo, a resident of the Waterford community and president of its Home Owners' Association said, "It is great to have the Attorney General's Consumer Protection people working for us. This Consent Order proves that when residents and the A.G.'s office works together, we can assure fair leases for all mobile home residents."