PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: Ralph K. Durstein, Deputy Attorney General
Consumer Protection Unit
Phone: (302) 577-8510
Cell: (302) 750-7498
Date: October 1, 2002
A. G. FILES COUNTERCLAIMS AGAINST MOBILE HOME LANDLORD FOR VIOLATING COURT ORDER
Court Order with Manufactured Housing Communities affects 1,500 residents
(Wilmington, DE): Attorney General Jane Brady today announced that her Consumer Protection Unit has filed consumer protection and mobile home law enforcement proceedings to enforce a Superior Court Consent Order that had been entered on April 30, 2002. Yesterday's proceedings were filed as part of an eight-count counterclaim accompanying a response to an earlier action filed by MHC Financing Limited Partnership Two and MHC Operating Limited Partnership, seeking to overturn the Consent Order, and obtain a ruling that its disputed lease provisions were legal.
The Department of Justice negotiated the April 30, 2002, Consent Order with MHC Financing Limited Partnership Two and MHC Operating Limited Partnership, and their parent company Manufactured Home Communities, Inc., ("MHC") earlier this year, to conclude an investigation which originated following tenant complaints that MHC was issuing illegal mobile home lot leases in several Delaware mobile home communities - Aspen Meadows, McNichol Place, Sweetbriar, and Camelot Meadows, in Sussex County, and the Waterford Community in southern New Castle County.
The Consent Order sited the following lease provisions as in violation of the Mobile Home Lots and Leases Act:
Requiring 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.
Approximately two months after the Consent Order was signed by Superior Court Judge Henley T. Graves, the Consumer Protection Unit received information that MHC was still issuing mobile home lot leases that were not in compliance with the Consent Order. Additional discussions between the Consumer Protection Unit and MHC were not productive, and MHC filed an action in Sussex County Superior Court several weeks ago, seeking to nullify the Consent Order, and asking Superior Court to rule on whether its lease provisions were illegal. The eight-count enforcement and contempt counterclaims were filed as part of the Department of Justice's response to that action. In the counterclaims, the state seeks a finding of contempt and penalties for failure to draft and implement the revised lease, and for violation of other terms of the consent order. The other counts of the counterclaim allege consumer fraud, deceptive trade practices, consumer contract law violations and conduct impacting elderly and disabled tenants.
"When a company will not comply with the law, we will go to Court to enforce compliance," said Attorney General M. Jane Brady.
The eight count counterclaim charges MHC with violating the Consent Order, and seeks resolution of various legal issues involving mobile home and consumer protection law, as well as restitution and civil penalties of up to $25,000 per violation, for each violation of the Consent Order.
Ed Speraw, president of the Delaware Manufactured Home Owners Association said, "For the most part, we have good owners in Delaware. However, bad owners beware. We are watching and will work with the office of the Attorney General to both interpret and enforce Delaware's laws in the proper manner."
Bill Reed, a resident in the Aspen Meadows community and special assistant to the President of the Delaware Manufactured Home Owners Association commented,
"I'm pleased that the Attorney General is taking this action. MHC is arrogant in its dealings and this attitude spreads beyond Delaware to consumers in many other states around the country. I'm glad we have a strong AG who will play hardball with MHC to protect mobile home owners and tenants."
Barbara Tomeo, a resident of the Waterford community and president of its Mobile Home Owners' Association said, "We hoped that once the cease and desist order was agreed to, that a new lease would be put in place and that residents would be able to work cooperatively with MHC and the Attorney General's office to resolve differences."