CHAPTER 382

FORMERLY

HOUSE BILL NO. 531

AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO THE MANUFACTURED HOME OWNERS AND COMMUNITY OWNERS ACT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each house thereof concurring therein):

Section 1. Amend Chapter 70, Title 25 of the Delaware Code by adding thereto a new section to read:

"§7001A. The Delaware Manufactured Housing Alternative Dispute Resolution Act.

(a) The purpose of the Delaware Manufactured Housing Alternative Dispute Resolution (ADR) Act is to provide a means to resolve disputes without litigation by using alternative dispute resolution techniques. The Act requires the use of alternative dispute resolution by the parties if the Governor’s Advisory Council on Manufactured Housing, by the affirmative vote of a majority of its members, determines that an existing dispute or perceived grievance between a manufactured home community owner and a tenant or a group of tenants should be referred to ADR. A broad interpretation of the provisions of this section should achieve these purposes.

(b) As used in this section, unless the context otherwise requires:

(1) 'ADR' means the alternative dispute resolution method provided for by this section, unless the parties to a dispute adopt by written agreement some other method of ADR, in which event 'ADR' refers to the method they adopt. The 'ADR' method provided for by this section is mandatory, but nonbinding mediation.

(2) 'ADR specialist' means an individual who has the qualifications described in subsection (g) of this section to conduct an ADR proceeding.

(3) ‘Advisory Council’ means the Governor’s Advisory Council on Manufactured Housing.

(4) A 'dispute subject to ADR' means a dispute that is not the basis for a pending action for summary possession in accordance with §5702 of this title.

(5) 'Mediation' is an option by which an ADR specialist facilitates the parties in reaching a mutually acceptable resolution of a dispute. It includes all contacts between the ADR specialist and any party or parties until a resolution is agreed to, the parties discharge the ADR specialist, or the ADR specialist finds that the parties cannot agree.

(6) 'Person' means any individual, corporation, association, partnership, statutory trust, business trust, limited liability company, or any other legal, commercial, or governmental entity, whether or not organized for profit.

(c) A person who files a certificate of agreement provided for in subsection (d) of this section agrees to submit all disputes subject to ADR to an ADR specialist. Upon the filing of a certificate of agreement, the filer is bound by the provisions of this section.

(d) (1) A certificate of agreement to submit a dispute to ADR must set forth (i) the name of the person filing the certificate; (ii) the address of the person filing the certificate, including the street, number, city, state, and zip code, which will be used to give any required notice in a dispute; (iii) the name of the person(s) or entity subject to the dispute; and (iv) the nature and substance of the dispute in sufficient detail to permit understanding of the circumstances and issues involved in the dispute.

(2) A provision in a certificate of agreement that purports to limit a dispute that is subject to ADR, other than an action for summary possession, is void.

(e) (1) A certificate of agreement accepting ADR must be filed with the Chairman of the Advisory Council, or his or her designee.

(2) The Chairman shall keep records as are required to determine who has filed a certificate of agreement accepting ADR or when such a certificate has been revoked, together with the date of any such filing or revocation.

(3) The Chairman shall keep appropriate records regarding all disputes which have been referred to ADR by the action of the members of the Advisory Council.

(4)A certificate of agreement accepting ADR or revoking ADR must be accompanied by a payment of $30 to the Governor’s Advisory Council. The payment amount may be changed by a two-thirds affirmative vote of the members of the Advisory Council. The payment will be refunded if the Advisory Council does not submit the dispute to ADR.

(f) (1) If the Advisory Council determines that an existing dispute or perceived grievance between a manufactured home community owner and a tenant or a group of tenants should be referred to ADR, ADR is mandatory, but nonbinding. A manufactured home community owner or a tenant or a group of tenants who are the respondents in a dispute for which a certificate of agreement has been filed with the Advisory Council, shall submit to the ADR.

(2) An affirmative vote by a majority of the members of the Advisory Council is sufficient to submit a dispute between a manufactured housing community owner and a tenant or a group of tenants to ADR.

(g) ADR proceedings must be conducted by a person who meets the following criteria:

(1) The person has successfully completed at least 25 hours of training in resolving civil disputes in a course or program approved by the Delaware State Bar Association, or

(2) The person is registered as an active member of the Delaware Bar, together with a minimum of 5 years of experience as a practicing attorney; and

(3) The person agrees to conduct ADR proceedings without compensation.

(h) The ADR mediation conference. A mediation conference must be scheduled in consultation with the parties within 30 days of the date of the determination by the Advisory Council that the dispute shall be referred to ADR, and must be held by the selected ADR specialist within ninety days after scheduling. All parties must participate in the mediation conference. The ADR specialist may immediately terminate the ADR conference and recommend that the Advisory Council refer the dispute to the Attorney General's office for further investigation, for failure to participate in the mediation conference. All persons necessary for the resolution of the case must be present at the mediation conference.

(1) Before a mediation conference begins, the ADR specialist shall provide the parties with a written statement setting forth the procedure to be followed. The parties are each required to serve upon the ADR specialist a Confidential Mediation Conference Statement 10 days prior to the scheduled mediation conference.

(2) Prior to the commencement of the mediation conference, the parties and the ADR specialist shall sign a written agreement which must include explanation of the following:

A. the rights and obligations of parties to the mediation conference; and

B. the confidentiality of the mediation conference.

(3) All memoranda, documents, work products, and other materials contained in the case files of an ADR specialist or a court related to the mediation are confidential. Any communication made in, or in connection with, the mediation which relates to the dispute being mediated, whether made to the ADR specialist or a party or to any person, if made at a mediation conference, is confidential. The certificate of agreement is confidential unless the parties otherwise agree in writing. Confidential materials and communications are not subject to disclosure in any judicial or administrative proceeding except:

A. if all parties to the mediation agree in writing to waive confidentiality;

B. in an action between an ADR specialist and a party to the mediation for damages arising out of the mediation; or

C. statements, documents, memoranda, materials, and other tangible evidence, otherwise subject to discovery, which were not prepared specifically for use in, and were not used in, the mediation conference.

(4) The ADR specialist shall assist the parties to reach a mutually acceptable resolution of their dispute through discussion and negotiation. The ADR specialist may terminate the mediation conference if the parties are unable to reach agreement. Such a termination is without prejudice to either party in any other proceeding. The ADR specialist may not impose any adjudication, sanction, or penalty upon the parties based solely on their failure to reach an agreement; however, the ADR specialist may impose sanctions upon a party who fails to appear for a mediation conference or fails to negotiate in good faith. A party is not bound by anything said or done at the mediation conference, except by a settlement agreement, if a settlement is reached.

(5) If the parties involved in a mediation conference reach a settlement, the agreement must be reduced to writing by the ADR specialist, unless the parties otherwise agree as part of their settlement that they will prepare the writing. The written agreement must be signed by the parties and the ADR specialist. The ADR specialist shall encourage unrepresented parties to the mediation to consult with counsel prior to executing a mediation agreement. The ADR specialist shall provide all parties with a list of agencies that may be able to assist an unrepresented party, such as the Consumer Protection Unit of the Attorney General’s Office; Delaware Volunteer Legal Services, Inc. (DVLS); Community Legal Aid Society, Inc. (CLASI); and Legal Services Corporation of Delaware, Inc. (LSCD). A settlement agreement must set forth the settlement of the disputed issues and the future responsibilities of each party to the agreement. The agreement is binding on all parties to the agreement.

(6) If the parties involved in a mediation conference do not reach a settlement, the ADR specialist shall file with the Advisory Council a notice and serve a copy to each of the parties, advising that mediation was not successful.

(i)(1) With the exception of subsection (1) (statute of limitations) of this section, the ADR procedures provided for in this section cease to have any force or effect upon the commencement of litigation concerning the dispute that is the subject of the ADR proceedings. The parties to such litigation are exclusively subject to the rules of the tribunal in which the litigation has been commenced and nothing in this section shall be construed to infringe upon or otherwise affect the jurisdiction of the courts over such disputes.

(2) The Council may make a recommendation to the Office of the Attorney General for further action if the ADR process is unsuccessful. The Office of the Attorney General shall report back to the Advisory Council within 60 days as to the action taken or to be taken with respect to the dispute.

(j) The results of the ADR proceedings must be reported to the Advisory Council. Memoranda and documents submitted to an ADR specialist, statements made during the ADR, and notes or other materials made by the ADR specialist or any party in connection with the ADR are not subject to discovery, may not be introduced into evidence in any proceeding, and may not be construed to be a waiver of any otherwise applicable privilege; however, nothing in this section limits the discovery or use as evidence of documents and other materials that would have otherwise been discoverable or admissible as evidence but for the use of those documents or materials in the ADR proceeding.

(k) An ADR specialist has the same immunity that he or she would have if he or she were a judge acting in a court with jurisdiction over the subject matter and over the parties involved in the dispute that led to ADR.

(l) The initiation of ADR under this section suspends the running of the statute of limitations applicable to the dispute that is the subject of the ADR until 14 days after the ADR specialist files notice that mediation was not successful, pursuant to subsection (h)(6) of this section.".

Section 2. Section 1. of this Act may be referred to as the Delaware Manufactured Housing Alternative Dispute Resolution Act.

Section 3. Amend §7006, Title 25 of the Delaware Code by deleting the part of the first sentence of subsection (a) which ends immediately before paragraph (1) and by replacing it with the following:

"(a) All new and renewing rental agreements, including those rental agreements whose original term has expired, for a lot in a manufactured home community must contain:".

Section 4. Amend §7006, Title 25 of the Delaware Code by deleting paragraph (1) of subsection (c) in its entirety and by replacing it with the following:

"(1) The landlord shall remove the provision and provide all affected tenants by regular first-class mail with proof of mailing or by certified mail, return receipt requested, at the address of the tenants’ rented lots, with either an amended rental agreement or corrective addendum to the rental agreement within 30 days of the exhaustion of all appeals, if any are taken; and".

Section 5. Amend §7006, Title 25 of the Delaware Code by adding as new subsections (h), (i) and (j) to read as follows:

"(h) If a court of competent jurisdiction finds that a tenant’s rental agreement fails to contain a provision required by subsection (a) of this section:

(1) The landlord shall include the provision and provide all affected tenants by regular first class mail with proof of mailing or by certified mail, return receipt requested, at the address of the tenants’ rented lots, with either an amended rental agreement or corrective addendum to the rental agreement within 30 days of the exhaustion of all appeals, if any are taken; and

(2) The landlord is liable to the tenant for actual damages suffered by the tenant as a result of the violation, plus court costs, if any.

(i) If a court of competent jurisdiction finds that a landlord has willfully failed to include in the rental agreement a provision required by subsection (a) of this section, the tenant is entitled to recover three (3) months’ rent in addition to an award under subsection (h) of this section.

(j) Both the landlord and tenant shall comply with the provisions of the rental agreement. The remedies available to a landlord or a tenant set forth in this chapter are in addition to those remedies available to a landlord or a tenant in a court of competent jurisdiction for the failure by the landlord or the tenant to comply with any provision of a rental agreement.".

Section 6. Amend §7025, Title 25 of the Delaware Code by deleting §7025 in its entirety and by replacing it as follows:

"§7025. Enforcement.

(a) It is the duty and obligation of the Consumer Protection Unit, or its successor, of the Attorney General’s Office to enforce the provisions of this subchapter. A violation of any provision of this subchapter by a landlord is within the scope of enforcement duties and powers of the Consumer Protection Unit, or its successor, of the Attorney General’s Office.

(b) Whenever the Consumer Protection Unit, or it's successor, of the Attorney General’s Office has reasonable cause to believe that any landlord is engaged in a pattern or practice of violating or failing to comply with the terms of any provision of a rental agreement covered by this Chapter, the Attorney General may commence a civil action in any court of competent jurisdiction and seek such relief as the Attorney General’s Office deems necessary to enforce and to ensure the compliance with the terms of such agreement.".

Section 7. Amend Subchapter I of Chapter 70, Title 25 of the Delaware Code by adding thereto a new section to read:

"§7021A. Lot Rental Assistance Program.

(a) A homeowner or tenant in a manufactured home community who is eligible for Social Security Disability (SSD) or Supplemental Security Income (SSI) benefits or who is 62 years of age or older is eligible for lot rental assistance from the manufactured home community owner if the following criteria are met:

(1) The homeowner or tenant must have owned his or her manufactured home and/or resided in the home in the manufactured home community prior to July 1, 2006.

(2) The homeowner or tenant must reside full time and exclusively in the manufactured home in the manufactured home community, and the manufactured home must be the homeowner or tenant's only residence.

(3) The lot rent, excluding utility charges and other charges, fees, and assessments that are part of the services rider required under §7006(a)(9) of this subchapter, must exceed 30% of the income definition, as stated in the Delaware State Housing Authority Fact Book (DSHA Fact Book), or its successor document, for the United States Department of Housing and Urban Development (HUD) for the county median income limits based upon 40% of the county's median income for the number of residents in the home. For purposes of this section, 'income' includes the income of all occupants of the manufactured home, whether or not an occupant is a tenant, and of all tenants of the manufactured home, whether or not a tenant is an occupant.

(4) The total liquid assets, including but not limited to bank accounts, stocks, and bonds of the homeowner(s), tenant(s), and other residents, may not exceed $50,000.

(5) The homeowner, tenant, and other residents must provide to the community owner all documentation necessary to determine eligibility for lot rental assistance, such as bank records, eligibility letters, tax returns, and brokerage statements.

(6) The homeowner, tenant, and other residents and the manufactured home must be in substantial compliance with all manufactured home community rules, regulations, and standards.

(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.

(c) Lot rental assistance or rent credit received by a homeowner or tenant pursuant to this section is not transferable upon the sale of the manufactured home and/or the transfer of the rental agreement to a third-party purchaser.

(d) A homeowner or tenant who qualifies for lot rental assistance based on the criteria in subsection (a) of this section is entitled to lot rental assistance for a term of one year. Lot rental assistance for a qualified homeowner or tenant is a credit which is computed as the difference between the then-current lot rent and 30% of the income definition for the county median income, as stated in the DSHA Fact Book for the number of residents in the home; provided, however, that the lot rent for an eligible homeowner or tenant after application of a lot rental assistance credit may not exceed 30% of the income definition for the county median income, as stated in the DSHA Fact Book for the number of residents in the home.

(e) The homeowner or tenant has the responsibility to re-establish annually eligibility for lot rental assistance if he or she believes that he or she remains eligible for lot rental assistance. The homeowner or tenant must re-establish eligibility within 45 days immediately before the anniversary date of the prior determination of eligibility.

(f) (1) A community owner who is required to participate in the lot rental assistance program shall provide notice of the program to all homeowners and tenants in the community, and shall provide, pursuant to paragraph (2)(A) or (2)(B) of this subsection, renewal notices to all program participants at least 45 days before a participant's term of assistance expires. If the community owner does not provide a renewal notice, the lot rental assistance credit remains in effect until 45 days after the community owner provides notice. Upon receiving notice, a homeowner or tenant has 45 days in which to re-establish program eligibility by providing necessary documents and information to the community owner. If the homeowner or tenant fails to re-establish eligibility within 45 days of notice, the community owner may terminate the lot rental assistance credit.

(2) (A) Unless otherwise specified, renewal notice required by this subsection may be served personally upon a homeowner or tenant of a manufactured home community by leaving a copy of the notice at the homeowner or tenant's dwelling place with an adult person who resides therein.

(B) In lieu of personal service, renewal notice required by this subsection may be sent by regular first class mail with proof of mailing or by certified mail, return receipt requested, to the homeowner or tenant at the address of the homeowner or tenant's rented lot, or at an alternative address which the homeowner or tenant provided in writing to the community owner.

(g) During the period of any lot rental assistance, a homeowner or tenant must remain current with payment of rent after the application of the lot rental assistance credit, as well as with payment of utility fees and other charges and assessments. If the homeowner or tenant does not pay all lot rent after the application of the lot rental assistance credit, as well as pay utility fees and other charges and assessments on or before the due date or during the grace period provided under the law or otherwise, then the lot rental assistance credit may be immediately terminated upon notice, and the homeowner or tenant will not be eligible for further lot rental assistance.

(h) A homeowner or tenant receiving lot rental assistance credit must notify the community owner immediately of any substantial change in his or her financial situation or in the composition of the household.

(i) Any intentional misrepresentation by an applicant of his or her financial situation or living arrangements which, if the truth were known, would have resulted in the denial of lot rental assistance shall result in the immediate termination of all lot rental assistance, and an immediate obligation to reimburse all credits received under the lot rental assistance program to the point of the initial misrepresentation. A community owner may treat the amounts due and owing as a rent delinquency.

(j) A community owner shall treat all documents and information submitted for the lot rental assistance program as confidential and may not disclose the documents or information publicly or use them in any manner other than to determine eligibility under the lot rental assistance program. Any intentional public dissemination of confidential information provided pursuant to the lot rental assistance program is subject to civil relief which is reasonable and appropriate under Delaware law.

(k) Nothing in this section prohibits the owner of a manufactured home community from offering a lot rental assistance program that provides benefits over and above the benefits set forth in this section, or that extends eligibility for participation in the program.

(l) The provisions of this section do not apply to a manufactured home community with 25 or less manufactured home lots; provided, however, that an owner of such a manufactured home community may voluntarily offer a lot rental assistance program to the homeowners and tenants of the community.

(m) For the purpose of benefiting persons aged 62 and older, this section establishes a narrow exception to the prohibition against housing discrimination on the basis of "age" as set forth in Chapter 46 of Title 6, otherwise known as Delaware's Fair Housing Act.".

Section 8. The number of lots in a manufactured home community existing on the date that Section 7. of this Act is enacted into law is the number of lots that will be initially attributed to the manufactured home community for purposes of determining whether a community owner must comply with the provisions of 25 Del. C. §7021A.

Approved July 6, 2006